State transportation debt rising

Published 9:00 pm Monday, August 27, 2001

Associated Press

TACOMA — Stuck in a budget crunch, the state Department of Transportation is borrowing more money than ever before to keep Washington’s road and ferry system running.

The agency’s outstanding debt will rise from $1.1 billion to more than $1.6 billion over the next two years.

DOT plans to sell $522 million worth of bonds to pay for new highway, ferry and bridge projects and continue old ones.

"We’re borrowing more in the current budget than ever before," said Bill Starkey, a DOT financial planner.

The transportation agency is in this fix because the Legislature and Gov. Gary Locke abolished the car-tab tax last year, after voters passed Initiative 695 in 1999. The state DOT, which relied heavily on the unpopular tax, lost $400 million a year.

As the DOT takes on more debt, it also must spend more money paying it back. Four years ago, the state spent $100 million a year paying off outstanding debt. By 2005, loan payments will reach $150 million a year.

So, how much borrowing is too much?

"If you build something that has a 50-year life, it’s not unconventional to borrow money and pay it off over the useful life of it," said Doug MacDonald, the state’s new transportation secretary.

"That’s how we buy houses and how we buy cars. And that way, if you build a bridge that’s going to last 40 years, everybody who’s driving over it for 40 years ought to pay for it."

But the state doesn’t want to take out a 25-year loan to pay for highway repaving. Asphalt wears out in eight to 11 years, and DOT doesn’t want to be in a position of making payments on something that’s worn out — and needing more money to fix it again, he said.

And if the state uses too much of the gas tax to pay off loans, it might not have enough money for routine maintenance and repaving on the existing 7,000 miles of highway lanes it already has.

DOT still has a $2.7 billion budget for the next two years, including $384 million a year collected from gas taxes.

The state gas tax in Washington is 23 cents a gallon; 12 cents goes to the DOT and 11 cents goes to local governments. Proposals in the Legislature this year would have raised the tax by 6 cents to 9 nine cents a gallon to help pay for new projects. But the proposals failed after a long, bitter, partisan stalemate.

The borrowed $522 million will mostly pay for ferry repairs, terminal improvements and some new highway projects, including the Port of Tacoma Road overpass and a similar freight-mobility project in Seattle.

"Can you solve the transportation problem by doing additional borrowing? No. Can you do a few projects? Yes," MacDonald said. "We clearly need a better study of this, and what the right balance is."

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