Tacoma Narrows Bridge users should brace themselves for a big jump in toll rates, probably by mid-year.
That was the takeaway from a public meeting of the bridge's Citizens Advisory Committee at the Wednesday night.
“No one likes to bring bad news and this is a bad news session,” Committee Chair Alan Weaver told a full house of residents and business leaders. “Tolls will have to go up.”
Right now it costs $2.75 for Good to Go drivers to use the bridge, $4 to pay cash and $5.50 to pay by mail.
The Jan. 11 meeting looked at scenarios that would raise those rates by $1.50 to $2.
Essentially, flat revenues and fewer bridge users due to the recession, combined with higher debt costs and an evaporating cash reserve fund, are what makes the sizable hike necessary. The last toll increase was in 2008. Last year, the Washington State Transportation Commission deliberately chose to dip into cash reserves rather than impose an increase on bridge users in this economy.
Now if tolls remain at their current level, the Washington State Department of Transportation has projected the bridge’s finances will wipe out cash reserves by November and tumble into an $18.7 million overall deficit by mid-2013. The shortfall would continue to grow from there.
To avoid that, drivers with Good to Go passes, who account for 75 percent of the traffic across the bridge, could see a toll increase to $4.25 or $4.50, according to four rate hike scenarios presented by Craig Stone, WSDOT’s toll division director. Tolls for cash payers could rise to $5.50 or $6. Those who pay by mail could see $7 to $7.50 tolls.
Those amounts were requested by the Weaver and CAC Vice Chair Chris Myers in order to kick off discussions on the subject, said Stone. “They didn’t ask us to do any more tonight, so that very well could mean these are the ones they are going to consider,” he added.
The toll increase should ensure that the state can meet its rising expenses related to building the new bridge. The state sold 10 bond issues between 2002 and 2007 to pay for the construction, and principal and interest payments on those obligations will continue to rise annually through the 17th year of the funding’s 30-year life. In December, an additional $5.7 million a year over 10 years will be needed to pay off a $57 million in deferred sales tax incurred on the construction. Plus, $5.3 million borrowed from the gas tax fund must be repaid as well.
Less certain at this point is how far a $1.50-$2 toll increase will go toward maintaining minimum cash reserves for the Narrows. The commission’s policy has been to have that “savings” balance equal to at least 12.5 percent of annual bridge costs — enough to cover 45 days worth of expenses should some event derail traffic on the bridge.
But none of the higher toll-rate scenarios reviewed Wednesday night would accomplish that beyond the middle of 2013. Even the scenario with the biggest bump up in tolls — $4.50 for Good to Go, $6.00 for cash and $7.50 for pay by mail — would see the cash reserve coverage fall below the 12.5 percent target in the following fiscal year ending June 30, 2014 and then continue to drop off from there.
The cash reserve isn’t contractually required in any of the Narrows Bridge bond documents, so the transportation commission could change its policy. “But we don’t plan to,” Commissioner Dan O’Neal told attendees at the CAC meeting. “We have a fiduciary obligation to make sure these payments will be made.”
Some at the meeting, including known Narrows toll critic Randy Boss and state Sen. Derek Kilmer questioned whether the reserve was even necessary. Boss said bridge users already pay for WSDOT to self-insure the bridge. Kilmer pointed to the bonds’ triple layer of guarantees as adequate protection against a potential interruption in the ability to meet debt obligations.
Kilmer and Rep. Larry Seaquist, who was also at the meeting, are taking their own steps to help ease the financial crunch for the Narrows. The two are pushing legislation that would exempt the bridge from the sales tax it owes, which if successful could translate into a 40-cent saving on each toll, said CAC member Jim Pasin.
“I think it is really bad policy to pay a toll to pay a tax,” said Kilmer. “It’s not fair to our communities.”
The Senator also has urged State Treasurer James McIntire to explore alternatives for restructuring the Narrows Bridge bonds that could reduce WSDOT’s debt payments going forward.
Despite such strands of hope, numerous residents used the public comment period toward the end of the meeting to vent their frustrations over tolls.
“I’m retired and you are killing me going across the bridge. You’re killing me,” said one Gig Harbor resident.
Sandra Bradley echoed the sentiment. “If the toll goes up I will not be able to cross the bridge and I can’t be the only one. This is a fact of what will happen,” she said.
Others expressed concern over the economic impact to businesses and the community if the cost of crossing the Narrows made Gig Harbor and other nearby towns a less attractive place to live.
The CAC will be studying the toll hike issue and weighing its options over the next couple of months and will make its recommendation to the transportation commission by March 20.
Its next meeting at the Gig Harbor Civic Center is scheduled for 6:30 p.m. on Wednesday, Feb. 8. Beforehand, WSDOT will host an open house at 5:30 p.m.
Comments or questions to the CAC may be submitted either online at: www.wsdot.wa.gov/Tolling/TNBTolling/CitizenAdvisoryCommittee or by mail to TNB-CAC, WSDOT Toll Division, 401 2nd Ave. S., Seattle, WA 98104.