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Gas tax won't be enough to keep promises

Shortfall leaves half of road projects without funding

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By Lukas Velush, Herald Writer
Published:
Work to widen I-5 in Everett is wrapping up early and on budget.
The $263 million project, set to finish by June, is being called a signature example of the roadwork the Legislature promised in 2003 and 2005, after adopting the two largest gasoline tax increases in state history.
Now the state is running short of money to pay for everything. The reasons: Drivers are buying less gas than expected and it's costing the state more to build projects than estimated.
And some of the roadwork promised may be put off until money can be found to complete it.
Half the projects will be finished or under construction by summer.
Drivers across the state already are driving on new lanes and over wider bridges funded by the 5-cent and 9.5-cent per gallon gas tax hikes.
When the Legislature adopted the gas tax increases, they counted on them to raise $11 billion over 16 years for road projects, said Glenn Kuper, a spokesman for the state Office of Financial Management.
In order to finish everything, the state needs to come up with about $782 million. In Snohomish County the projected shortfall is $51 million out of $1.3 billion budgeted for roads, bridges and other projects.
Most of that potential shortfall stems from an 11 percent increase in the cost of construction supplies between 2002 and 2006, including a 30 percent increase in 2006, Kuper said.
And with gas prices hovering near $3 a gallon, drivers are buying less. That's expected to short the state's two-year budget by about $76 million. And transportation planners figure the problem will continue.
"We have to work with the Legislature to come up with a way to close the gaps," Kuper said. "We don't want to put things off for very long because we need to get things stabilized."
Gov. Chris Gregoire does not want to take money out of the general fund to pay for the projected shortfall, he said, but she still wants the problem solved.
"She wants to work with the Legislature and do it at a pace that makes sense," Kuper said.
It's crucial not to drop projects that legislators promised taxpayers, said Sen. Mary Margaret Haugen, D-Camano Island, chairwoman of the Senate Highways and Transportation Committee.
"We need to stay on top of the (transportation) department," Haugen said. "We can do better."
Construction projects can be built faster and more efficiently, she said. She pointed to the Everett I-5 widening project, where the state is saving millions of dollars by having the contractor build the project as quickly as design work is complete.
The shortfall can't be blamed on the state Department of Transportation, said Rep. Judy Clibborn, D-Mercer Island, chairwoman of the House Transportation Committee.
"I think from a project delivery standpoint, they can crow," she said. "They're finishing their projects on time and on budget."
The costs of steel and concrete "are beyond our control," she said.
Transportation Department officials are looking for creative ways to get the projects done without dropping any, said Dave Dye, the agency's chief operating officer.
"It might take longer to deliver some of the projects," Dye said. "Some of the project schedules might be affected."
Facing the same increase in costs and declining gas tax revenue last year, the Legislature voted to push out some of the projects promised in the nickel package, Kuper said.
Originally the nickel tax package was to end by 2038. The Legislature last year decided that taxpayers will have to pay that tax until 2042 to cover the revenue shortfall, he said. The 9.5-cent per gallon tax hike has no sunset date.
Reporter Lukas Velush: 425-339-3449 or lvelush@heraldnet.com.
Story tags » RoadsLegislature

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