The Interstate 405 toll lanes some Eastside drivers love to hate would be here to stay for the foreseeable future under a bill passed by the Washington State Senate on Thursday night.
The bill, SB 5825, would allow the state to extend those lanes south and use the toll revenues from that and other highways to pay back bonds in an effort to speed up construction projects on those highways. The bill passed the Senate with a 30-18 vote.
Under the proposal, the state could extend express toll lanes on I-405 from Bellevue to Renton and along Highway 167 from Renton south to Puyallup. Tolling could also be implemented on new segments of Highway 167 and Highway 509 meant to improve freight access to regional ports and together branded as the Puget Sound Gateway.
The tolls have long been planned by state officials; the bill provides the necessary permission to put them in place. More controversial even than tolling is that the bill would allow the state to sell up to $1.5 billion in bonds backed by toll revenues.
“Bonding this creates a debt not just for those people that are living there now but it’s creating a debt for the future,” said Sen. Randi Becker, R-Eatonville, “and I don’t know that the benefits are going to outweigh the costs.”
Bonds mean an infusion of cash up front and an earlier delivery of planned highway widening and construction, supporters argue.
“When I tell constituents [the Puget Sound Gateway] is not going to be done until 2031 … they’re shocked about that,” Sen. Hans Zeiger, R-Puyallup, said during a committee meeting earlier this month. Zeiger argued any new approval of tolls should be tied to speeding up the project.
Skeptics claim tying toll revenues to bonds would incentivize the state to toll into perpetuity or, in the words of the conservative Washington Policy Center, create a “perverse incentive” for WSDOT to maintain congestion so the state can keep collecting toll money.
Washington State Department of Transportation (WSDOT) spokesman Lars Erickson countered in an interview earlier this month that WSDOT’s “priority is to move people safely through a facility.”
“That’s our first priority,” Erickson said. “We are not a revenue-generating for-profit organization; we’re a public entity.”
To speed up projects, Washington Policy Center transportation Director Mariya Frost said lawmakers should instead tap vehicle sales taxes, streamline permitting or redirect car tabs and other vehicle fees away from walk, bike and transit projects.
Sen. Steve Hobbs, D-Lake Stevens, said on the floor Thursday night, “Bonds are not evil. Bonds are just simply a financing tool … We need these projects now.”
Under the bill, the vast majority of the bonds would be for the I-405 project, where the state plans to widen the highway between Bellevue and Renton as well as through the SR 522 interchange near Bothell. The I-405 work also has implications for Sound Transit’s plans to run bus rapid transit (BRT) along I-405, set to start in 2024. The widening and toll-lanes project includes a BRT station in Renton, which could be delayed without toll funding, according to the agency.
Existing toll revenues have far outpaced expectations on I-405, where express toll lanes brought in more than triple the money expected in their first months.
The bonds would be paid back first by toll revenue, then, if necessary, by gas taxes or the state. The Legislature would agree to continue tolling to pay the bonds, the bill says.
The office of the State Treasurer estimates the bonds would be rolled out over the next decade and take about 25 years to pay off from the last date they’re issued.
The bonding scheme wouldn’t be entirely new for Washington, said Deputy State Treasurer Jason Richter. The state sold bonds to help build the Tacoma Narrows Bridge and paid them back with gas-tax revenues, which were then replaced with toll dollars. Bonds were also issued for the SR 520 bridge and were backed in a similar way to this latest proposal: first by toll revenues, then, if necessary, gas taxes and the state. (The state can get better interest rates by backing the bonds with some source of money other than just tolls.)
Bonding for the new highways in the Puget Sound Gateway project is comparable to those bridges, but bonding for express toll lanes, which have “more of an elastic demand,” is a new strategy, Richter said.
The fate of that strategy has been uncertain throughout this year’s legislative session. A House bill that included bonding stalled out after an initial hearing.
House Transportation Committee chair Rep. Jake Fey, D-Tacoma, said he was balancing the “calculus” of members who philosophically opposed bonding against toll revenue with those who would only back the tolls if they could tell voters it would speed up the promised highway projects.
With Sunday the end of the Legislature’s planned regular session, the bill still faces several hurdles. Bonding requires 60% approval by the Legislature, and the proposal now goes to the state House.