PubliCola has learned that the Washington State Department of Transportation, which initially predicted it would be able to raise $400 million in toll revenues to pay to replace the Alaskan Way Viaduct with a tunnel, now believes tolls will raise only $200 million, half the original projection.
The $200 million figure comes from WSDOT's proposed tunnel budget (see page 9), which is currently being reviewed by the state legislature. The revised budget now assumes $702 million in funding from the federal government---$219 million more than the original assumption of $483 million.
David Dye, WSDOT's viaduct project manager, says the agency adjusted tolling projections downward for three reasons.
First, he says, the economy hasn't recovered as quickly as the state's projections---based on the Puget Sound Regional Council's forecasting model---predicted. "We put more conservative assumptions [in play], as opposed to the PSRC's," Dye says.
Second, there's what you could call either the value of people's time. When people value their time less (as in a down economy), they're more likely to be willing to go out of their way to avoid tolls. With drivers struggling to make ends meet, many are willing to drive on slower alternate routes to avoid tolls, creating more diversion from the tunnel, Dye says.
Finally, WSDOT assumed inflation of between 2 and 2.5 percent in its bond financing predictions. That inflation rate, obviously, hasn't panned out---with the result, as Dye puts it, that "a lot of the buying power of the tolls goes away."
The state plans to make up the $200 million shortfall with federal dollars. To oversimplify a very complicated process: When states get federal transportation dollars, the feds hold 20 percent of the money in reserve in case the project doesn't pan out. When projects don't pan out, that money becomes available to states again. In Washington's case, that works out to $219 million.
Mayor Mike McGinn, a longtime opponent of the tunnel and a skeptic of WSDOT's initial toll revenue predictions, wasn't immediately available for comment, but his spokesman, Aaron Pickus, said, "We're pleased that WSDOT is being realistic about the amount of toll revenue that we're projected to collect."
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