Thanks to the teamwork of 26th District state legislators, users of the Tacoma Narrows bridge will not pay higher tolls this year. Unfortunately, this relief lasts one, maybe two, years — and then the relentless increases could begin again.
That doesn’t have to be the case. By law, tolls on the bridge must cover all operating costs, including repayment of debt for the construction of the bridge. Toll rates are largely driven by three factors:
▪ Amount of debt repayment.
▪ Volume of traffic crossing the bridge.
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▪ The size of the “sufficient minimum balance,” a policy mandate of the state Transportation Commission.
Let’s examine these factors.
More than 85 percent of toll revenue goes to addressing the first factor, debt repayment. The bridge was primarily financed by issuing bonds to be repaid in increasing amounts through 2030. Between 2014 and 2017, debt repayment increased from $55 million to $70 million per year, and it will increase to $85 million by 2028.
Meanwhile, traffic volumes have not met projections. The costs of the bridge are borne by toll payers. Accordingly, more traffic equates to lower tolls. Unfortunately, actual usage this year has been about 14 million trips — 3 million fewer than originally projected.
And then there’s the third factor. Toll payer money is being held by the state to meet the sufficient minimum balance requirement. The Transportation Commission adopted a policy that requires 12.5 percent of operating costs be collected from toll payers and held by the state for two reasons: (1) to cover 45 days of operating costs if toll collections are disrupted and (2) to keep borrowing rates low for the state.
Today, about $10 million is being held in the SMB account.
The state puts the three factors into a financial model and ultimately decides on toll rates that meet operating costs and debt repayment, and also meet the SMB requirement over a two-year period.
This year, the modeling showed that keeping tolls at current levels would result in the SMB requirement not fully meeting the 12.5 percent target during a short window. Rep. Jesse Young’s solution was to simply fill that gap to avert a planned 50-cent toll increase.
While most understand the concept of a reserve account, it’s time for Washingtonians to ask two important questions. First, how much reserve is necessary, and second, how should it be financed?
If, indeed, Washington citizens benefit from the state holding 45 days of operating costs, then the state should share in covering that expense. That is exactly what the Legislature did this year.
Let’s build on this precedent to achieve long-term stability for toll payers. Fortunately, use of the bridge is increasing, and projections are encouraging. Even so, it’s time to allow money already collected from toll payers to be used to meet future debt obligations, and have the state do its part in meeting the SMB requirement.
Such an approach could yield stability for Tacoma Narrows bridge users for the next decade, or more.
Bruce Beckett of Gig Harbor is chairman of the Tacoma Narrows Bridge Citizens Advisory Committee.