ST 2 does not relieve congestion; could make it worse

2008 Citizens' Guide to Sound Transit, Phase 2

by Michael Ennis
Director, Center for Transportation
September 2008

---

Introduction

This November, voters in King, Pierce and Snohomish Counties will again decide on whether to expand Sound Transit’s regional mass transportation system. The new Sound Transit proposal (ST2) would add 36 miles of light rail,
expand the Sounder commuter rail by four daily round trips between Tacoma and Seattle and expand the Express bus system by 17 percent. Sound Transit officials say that, if passed, ST2 would cost about $17.8 billion through 2023
and $22.8 billion through 2037. The proposal would impose a 0.5 percent sales tax increase within the Sound Transit district, which incorporates most of King, Pierce and Snohomish Counties. The total sales tax rate would vary among jurisdictions, but Seattle would rise from 9 percent to 9.5 percent.

Key Findings

• ST2 would spend about $22.8 billion, yet serve only 0.4 percent of all trips in 2030.

• ST2 would shift only 0.84 percent of passenger vehicles from the road to transit by 2030.

• ST2 would spend $22.8 billion to reduce VMT by only 0.867 percent.

• The cost for ST2 to serve one additional trip would be about $368,000. Under Transit Now, the cost for King County to serve one additional trip is about $10,000.

• The ST2 proposal would be 37 times less efficient than a traditional bus system like the one in King County.

• ST2 would increase traffic congestion for passenger cars and freight trucks by about 25 percent across the I-90 bridge.

• ST2 would reduce lane capacity on I-90 by 20 percent during the morning and afternoon peak commute periods.

• ST2 would eliminate subarea equity protections.

• Not counting CO2 emitted during construction, ST2 would reduce regional CO2 emissions by up to only 1.11 percent. The
same reduction could be achieved through purchasing carbon offsets for only $2.3 million.

2008 Citizens’ Guide to Sound Transit, Phase 2

Page | 1

by Michael Ennis
Director, Center for Transportation
September 2008

Introduction
This November, voters in King, Pierce and Snohomish Counties will again decide on whether to expand Sound Transit’s regional mass transportation system. The new Sound Transit proposal (ST2) would add 36 miles of light rail, expand the Sounder commuter rail by four daily round trips between Tacoma and Seattle and expand the Express bus system by 17 percent.1 Sound Transit officials say that, if passed, ST2 would cost about $17.8 billion through 2023 and $22.8 billion through 2037.2 The proposal would impose a 0.5 percent sales tax increase within the Sound Transit district, which incorporates most of King, Pierce and Snohomish Counties. The total sales tax rate would vary among jurisdictions, but Seattle would rise from 9 percent to 9.5 percent.3

The new proposal is Sound Transit’s second attempt to expand on the agency’s first phase, Sound Move (ST1), which voters approved in 1996.

Sound Move imposed a ten-year 0.4 percent sales and use tax and a 0.3 percent Motor Vehicle Excise Tax (MVET). In 1996, Sound Transit promised voters it would build 25 miles of light rail for a cost of about $5 billion in year-of-
expenditure (YOE) dollars, to be completed by 2006.4 Today, Sound Transit officials say they can only build 17 miles of light rail for about $15 billion and will not be finished until around 2020.5

In other words, Phase 1 is smaller, $10 billion over budget and 14 years late
from what was originally promised to voters. In addition and regardless of
telling voters it was a “ten-year plan,” Sound Transit officials will collect the 0.4
percent sales tax in perpetuity, even after the first phase is complete in 2020.

Sound Transit officials first asked voters to expand its system in 2007 through a combined $47 billion roads and transit ballot proposal, also known as
Proposition 1. But voters rejected the measure and Sound Transit officials went back to the drawing board.

1 Resolution No. R2008-10, Exhibit A, Sound Transit, Adopted July 24, 2008. Available online
at: http://future.soundtransit.org/documents/Reso2008-10%20Exhibit%20A%20Plan%20Docu-
ment.pdf
2 Multibillion-dollar rail, bus plan is up to voters, Seattle Post Intelligencer, July 24, 2008. Avail-
able online at: http://seattlepi.nwsource.com/local/372210_soundtransit25.html.
3 Based on current local and state sales tax rates calculated by the Department of Revenue.
4 Sound Move, The 10-Year Regional Transit System Plan, May 1996.
5 Sound Transit, University Link Financial Plan, June 2006.




Now, Sound Transit officials have trimmed the number of projects, shortened the estimated completion schedule and shed the road building portion of the package for a second attempt at the ballot. The following discussion builds on Washington Policy Center’s original six-part series of analysis on Proposition 1 and describes Sound Transit’s latest ballot proposal.

Another ST2 proposal violates Sound Move policy

With a new proposal, the Sound Transit board is violating its own promise
to roll back Sound Move taxes. As part of ST1, which passed in 1996, Sound Transit promised voters a certain level of accountability because its taxing authority did not include an expiration date. In other words, Sound Transit officials wanted to ensure taxpayers that there was a process by which the new taxes would eventually end. So Sound Transit officials included this critical taxpayer protection clause, which voters ultimately accepted:
“Any second phase capital program which continues local taxes for financing will require voter approval within the RTA District. If voters decide not to extend
the system, the RTA will roll back the tax rate to a level sufficient to pay off the
outstanding bonds and operate and maintain the investments made as part of
Sound Move.6”
Since voters indeed rejected a “second phase capital program” with the failure of ST2 last November, and according to Sound Transit’s own policy, the agency should roll back ST1 taxes to operating and maintenance (O&M) levels. By moving forward with another ST2 tax proposal, Sound Transit is violating its own taxpayer protection clause that voters accepted in 1996.

ST2 eliminates subarea equity protections

Approved with the passage of ST1, the Sound Transit district is separated into
five subareas (Snohomish County, North King County, South King County, East King County and Pierce County) and employs the principle of subarea equity. Subarea equity is arguably the strongest accountability limitation placed upon Sound Transit. It requires taxes collected within a subarea to be spent in that subarea to ensure a proportional distribution of spending. In other words, taxes collected in Bellevue can only be used for projects in Bellevue and cannot be
used on projects in other subareas, like Federal Way.
Buried in the ST2 ballot proposal however, Sound Transit officials have reserved certain exceptions that render many accountability measures, including subarea equity, meaningless. The new ST2 measure says this:7
“In the event that a subarea’s revenues are insufficient to cover its costs, the agency’s currently approved policies provide the Sound Transit
Board with these options:
• Modify the scope of the projects;
6 Sound Move, The 10-Year Regional Transit System Plan, May 1996.
7 Resolution No. R2008-10, Exhibit A, Sound Transit, Adopted July 24, 2008. Available online
at: http://future.soundtransit.org/documents/Reso2008-10%20Exhibit%20A%20Plan%20Docu-
Page | 2 ment.pdf



• Use excess subarea financial capacity and/or inter-subarea loans;
• Extend the time to complete the system;
• Seek legislative authorization and voter approval for additional resources.”

The principle of subarea equity greatly restricts how Sound Transit spends tax
collections. The agency’s policies already create an incentive to underestimate
costs as a way for Sound Transit officials to avoid the limitations of subarea











































Page | 3

equity.

Because the Sound Transit board is unelected, ST2 would further untie the agency from the promises it makes, and would allow the board to shift money among subareas without additional voter input.

As the agency’s statement above suggests, these policies have already been
approved by the Sound Transit board and are in place. Sidestepping the subarea
equity limitation is highly controversial so Sound Transit officials appear to
be looking for insulation. By placing them as part of the ST2 proposal, Sound
Transit hopes to have them publicly ratified in effect, if the measure passes.

Compared to Traditional Bus Service, Passenger Demand Does Not Justify Costs
Sound Transit officials estimate that the new ST2 package would carry an
additional 163,000 daily trips by 2030.8 But Sound Transit also estimates that
about two thirds of those trips would come from the existing transit system.
Sound Transit officials estimate that only 62,000 daily trips would be new.9

The Puget Sound Regional Council (PSRC) estimates that drivers and transit users will make about 15 million total trips per day in King, Pierce and Snohomish Counties by 2030.10 This means if ST2 passes, the expanded system would serve only 0.4 percent of all trips in 2030.

Comparing new daily trips (62,000) to how much taxpayers must pay ($22.8 billion) shows that the cost for Sound Transit to create one additional trip is about $368,000.

To put this new spending in perspective, King County recently passed
Transit Now, which will expand its bus system by 20 percent. King County officials estimate that Transit Now will serve up to an additional 60,000 trips per day, by 2016.11 King County also estimates the cost of Transit Now will be about $50 to $75 million per year, or about $600 million by 2016. This means the cost for King County to serve one additional trip is about $10,000.

Accounting for costs (operating and capital) and benefits (number of new trips), shows the ST2 proposal is about 37 times less efficient than a traditional bus

8 Ibid.
9 Ibid.
10 Destination 2030 Update, Technical Appendices, Puget Sound Regional Council, April, 2007. Available online at: http://www.psrc.org/projects/mtp/pubs/D2030techappendicesFinal.pdf 11 About Transit Now, King County Metro. Available online at: http://www.metrokc.gov/kcdot/ transitnow/about.stm



system like the one in King County.

ST2 Will Not Reduce Traffic Congestion

Trips do not equal riders. For example, a rider who makes a round trip commute to and from work counts as two trips. If that same rider took a bus to lunch and back, he counts as making four total trips during the day.
Because daily trips can double, triple and sometimes quadruple count the same individual, trips should be adjusted to estimate unique riders. The standard assumption is that single riders will equal 45 percent of trips.12 To look at it another way, 45 percent assumes less than half of total trips in a day will be the same person making a round trip. This does not capture all of the double counting of a single rider, but it is closer to accurately estimating how many different individuals will ride a transit system.
This estimation shows that ST2 will likely only serve the equivalent of about 27,900 new individual riders per day by 2030.

For Sound Transit to appreciably reduce traffic congestion, it must shift large
numbers of drivers from the roadways to its transit system. By 2030 there will
be about 3.33 million cars in Pierce, King and Snohomish Counties. 13 The

























Page | 4

equivalent of 27,900 riders is not insignificant. But assuming that each new rider
would equal one car, ST2 would only shift 0.84 percent of all vehicles from the road to its system by 2030.

In another measure, Sound Transit estimates that ST2 will reduce daily Vehicle Miles Traveled (VMT) from 99.4 million miles in 2030 to 98.5 million miles in 2030.14 This means Sound Transit officials want to spend $22.8 billion to reduce the daily Vehicle Miles Traveled by only 0.867 percent.

The PSRC estimates that traffic congestion will more than double by 2030.15 Based on Sound Transit’s own estimates, the ST2 measure would have no effect at reducing traffic congestion.

Less is More?
Sound Transit officials say the new ST2 package is smaller than the first version defeated by voters last November.

While the scope of projects is smaller, 36 miles of light rail instead of 50, and the project schedule is shorter, the proposed sales tax increase is the same (0.5 percent) as what Sound Transit proposed in 2007.

12 The American Public Transportation Association has used this conversion factor in the past to translate trips into individual riders.
13 2030 household projections calculated by the Puget Sound Regional Council’s Destination 2030 update. Available online at: http://www.psrc.org/projects/mtp/pubs/D2030techappendicesFinal. pdf. Assumed the regional vehicle ownership rate equals 1.81 cars per household.
14 Sound Transit 2 Planning, Sustainability Assessment of Sound Transit 2 Plan, Sound Transit, August, 2008.
15 Puget Sound Regional Council’s Destination 2030 update. Available online at: http://www.psrc. org/projects/mtp/pubs/D2030techappendicesFinal.pdf.



This means voters would get much less in public services for the same tax increase Sound Transit proposed in last year’s failed Proposition 1.

New ST2 Proposal Still Increases Congestion on Interstate 90

One of the more controversial projects in Sound Transit’s proposed second
phase (ST2) is reconfiguring the center lanes of Interstate 90 (I-90) to
accommodate up to 19 miles of light rail between Seattle and Bellevue. Known as East Link, the proposal includes replacing the two center High Occupancy
Vehicle (HOV) lanes that cross the bridge with light rail, a form of high capacity transit (HCT).
Sound Transit says the East Link Project would not reduce the number of lanes on I-90.16

This is not true.

During the morning peak commute drivers today have a total of five
westbound lanes (three general purpose and two HOV lanes). With Sound
Transit’s proposed reconfiguration, capacity would fall to only four westbound lanes. The same reduction would occur during the eastbound commute in the afternoon. This would be a 20 percent reduction in lane capacity during the morning and afternoon peak commute periods.

By reconfiguring the center lanes, the WSDOT estimates Sound Transit’s plan to place light rail on Interstate 90 would reduce overall vehicle capacity on the bridge by 15 percent during the morning peak commute and 8 percent during the afternoon.17

This means light rail would increase vehicle delay on the bridge by 27 percent during the morning peak drive, and 24 percent during the afternoon peak. ST2 would cause average westbound vehicle speeds to fall 21 percent during the
morning peak commute, and eastbound drivers in the afternoon would see a 17 percent decrease in speed.18

Freight vehicles would experience a much worse result. During the morning
peak drive, the number of freight trucks able to cross into Seattle would drop 24 percent. Leaving Seattle during the afternoon peak drive, trucks would see a 19 percent reduction in capacity.19

Conclusion

There is no doubt that mass public transportation is part of the solution to
reduce traffic congestion, especially in dense population centers. But allocating

16 Assertion that light rail will reduce the number of lanes on the I-90 bridge, Sound Transit, Au-
gust, 2008. Available online at: http://future.soundtransit.org/documents/080408_I-90_Lanes.
pdf.
17 Part IV: Light Rail and Interstate 90, Michael Ennis, Washington Policy Center, 2007. Available
online at: http://www.washingtonpolicy.org/Centers/transportation/policynote/07_ennis_partiv.
html.
18 Ibid.
Page | 5 19 Ibid.



large amounts of public money to expand a transit program that will serve less than one percent of all trips taken is not efficient.
Public sector spending decisions are typically based on perceived value and
whether taxpayers believe they are receiving a proportional benefit from the service purchased. In other words, the social value of $22.8 billion should be equal to its economic costs. The difficulty is defining the social value. Is a transit system that carries less than one percent of all daily trips worth more or less than doing something else or even doing nothing at all?
If the public value of traffic congestion relief is high, then the economic costs of
ST2 do not justify the increase in spending. Sound Transit officials understand
this predicament and instead try to point to other public benefits of ST2.
One of the most convincing arguments to support ST2 is the environmental aspect of shifting drivers to public transit to reduce greenhouse gas emissions and the region’s reliance on oil.
Sound Transit officials say that by 2030, ST2 would reduce annual CO2
emissions between 99,552 and 178,333 metric tons.20 That is an annual
reduction of between 0.71 percent and 1.11 percent of total regional CO2 emissions.21

To look at it another way, consider that CO2 emissions have monetary value
and thus can be measured to show whether spending $22.8 billion is justified for such a small reduction.

Terrapass, a nationally known firm that sells carbon offsets, charges $5.95 per 1,000 lbs of carbon reductions.22 Converting metric tons to pounds, shows the same CO2 reduction claimed by ST2 could be achieved by purchasing carbon offsets for between $1.3 million and $2.3 million.23 Far less, than the $22.8 billion Sound Transit officials are proposing.
This means Sound Transit’s relationship with any environmental rewards is so
slight that its ability to justify spending $22.8 billion is greatly diminished.

It should also be noted that the same environmental concerns and the rise in fuel prices is also driving technology.
The shift to zero emissions and super fuel-efficient vehicles is under way. Any
environmental benefits from ST2 over ordinary passenger vehicles will simply
disappear, by some estimates, within ten years, once alternative energy/fuel

.





Page | 6

sources are deployed. In fact, both presidential candidates, in different ways,
have plans to fast track this shift in technology.

In the end, voters will have to decide for themselves what is important and
whether the new ST2 proposal is worth the costs and increased long-term tax
burden.

20 Sound Transit 2 Planning, Sustainability Assessment of Sound Transit 2 Plan, Sound Transit, August, 2008.
21 Ibid.
22 Based on pricing information found on its website: www.terrapass.com.
23 Using a conversion calculator, convert metric tons to lbs, divide by 1000, and then multiply by
5.95.

Impact of replacing the viaduct with surface road will congest I-5

3/8/07Viaduct Plan Could Leave Only One North/South Freeway for Seattle
Next step should include a north/south corridor study State

by Michael Ennis, Director, Center for Transportation Policy
March 2007

Choosing an option for the Viaduct that permanently removes freeway capacity will increase congestion on I-5. This will likely have a negative influence on the economy, endanger public safety and further restrict freedom of movement. Similar to the highly successful I-405 Corridor Plan, public officials should partner with local jurisdictions and develop a north/south corridor study through Seattle to evaluate these impacts and identify solutions.

Lost Capacity

If the Viaduct is torn down and its traffic-carrying capacity is not replaced, I-5 would become the only north/south freeway corridor through, in, or out of Seattle. Having only one freeway presents a number of regional mobility, safety and economic issues.

The Washington State Department of Transportation (WSDOT) agrees that “the viaduct plays a major role in sustaining our economy and maintaining our citizens' ability to move to and throughout Seattle. One quarter of all north-south traffic through Seattle (110,000 vehicles) use the viaduct every day. Extreme congestion on I-5 and in the downtown city grid following the 2001 Nisqually Earthquake closures made it clear this is a critical route that needs replacing.”

Relying on a single north/south freeway through Seattle could create a variety of traffic, safety and economic impacts.

• In the event of an emergency, where mass evacuations are ordered, a single north/south corridor would fail to absorb the high demand.
• Without another north/south corridor or capacity improvements to I-5, freight mobility into or through Seattle would be negatively impacted. These impacts would increase the costs of moving goods-to-market and have a rippling economic affect throughout the state.
• Without another north/south corridor or capacity improvements to I-5, passenger vehicle mobility would be negatively impacted. This increased delay would be on top of the daily congestion travelers already endure.
• Increasing mass transit along the waterfront, without other increases in road capacity will not relieve traffic congestion. Ninety-four percent of daily trips are in private automobiles, a percentage that has not changed in 25 years. Nor will transit prevent the inevitable increases in delay for commercial vehicles or freight traffic.

A Successful Model

Between 1999 and 2002, the WSDOT partnered with more than 35 agencies, local municipalities, and public and private sector experts to complete a corridor plan for I-405. The purpose was to develop a strategy for reducing traffic congestion for both passenger and commercial vehicles. It included a Tier 1 Environmental Impact Statement and a long term master plan. The study identified a cost of $11 billion and more than 300 projects to improve the Eastside corridor over the next 20-30 years. Construction on several of the projects identified in the plan began in 2004 and it continues to serve as the blueprint for long term improvements for the Eastside.

In light of the Governor’s plan to tear down the current Viaduct by 2012, it only makes sense for state officials to perform the same type of analysis on I-5 through Seattle. The corridor plan should provide transportation planners with ideas on how the region will react to Washington’s largest city having only one north/south corridor and more importantly, how that will affect passenger vehicle mobility, freight mobility and public safety. The I-405 Corridor Plan was a successful model and leaders should implement a similar strategy on I-5 through Seattle.

Conclusion

The Governor’s plan to spend $915 million on the Viaduct appears to be the first step in replacing the current structure with some form of surface option. Reducing the supply of freeway capacity will result in negative impacts not only in Seattle, but regionally. Relying only on I-5 to support all of the north/south mobility demands through Seattle will jeopardize public safety, create negative economic fallout and increase traffic congestion. Transportation leaders must consider these implications and fund a corridor study to define these new demands and how to best address them.

About the Author

Michael Ennis is the Director of the Center for Transportation Policy. Before Joining Washington Policy Center , Michael worked for the Washington state Senate and House of Representatives and was formerly a staff assistant for U.S. Senator Slade Gorton. Michael served in the U.S. Army with the 2nd Ranger Battalion and has been active in local government affairs. He earned his Bachelor's degree from the University of Washington where he studied Political Science. He also earned his Master's of Public Administration degree from the Daniel J Evans School of Public Affairs also at the University of Washington .

Wa Policy Center argues against Initiative 912

nitiative 912 Fuels Debate Over New Gas Tax
by John Barnes, Policy Analyst
05-08

This election Washington citizens will vote on Initiative 912, a proposal to repeal the new 9.5 cent gas tax recently passed by the legislature. This Policy Note briefly describes the Initiative and summarizes the main arguments for and against it.

In April the state legislature passed and Governor Gregoire signed a bill to increase the state gas tax by 9.5 cents in four stages: raising it by three cents in July 2005 and July 2006, by two cents in July 2007, and 1.5 cents in July 2008. Initiative 912 would repeal about $5.5 billion in new gas tax revenues, leaving in place $3 billion in new revenues from higher vehicle weight taxes, higher drivers’ license fees, and other fees.

More than half of the legislature's 16-year $8.6 billion statewide transportation plan is earmarked for King County. Pierce County comes in second with an allocation of $769 million, with other counties around the state receiving various lesser amounts. Chief among the projects that would receive funding are the Alaskan Way Viaduct ($2 billion), Interstate 405 ($992 million), and the Highway 520 bridge ($500 million). These allocations only partially fund the targeted projects. Localities are expected to raise additional revenue for finishing the projects.

The new tax is the largest single gas tax increase in state history. Washington began taxing gasoline in 1924 at the rate of two cents a gallon. Today that rate is 31 cents per gallon (including the July 2005 phase-in of the recently-passed increase), giving Washington the tenth highest state gas tax in the nation. The federal government taxes gas at 18.4 cents a gallon, making the combined gas tax in Washington 49.4 cents a gallon. Under the Legislature’s plan, by 2008 Washingtonians will be paying a combined state and federal gas tax of 56 cents a gallon. The chart below shows the history of the gas tax in Washington (figure 1.1).

Not long after the new gas tax became law, opponents started a website, www.NoNewGas-Tax.com, and began the push for repeal with Initiative 912. They had no difficulty finding support for their cause. Organizers gathered more than 420,000 signatures in just over 30 days, without the use of paid signature gatherers. The groundswell of support arose in response to what many see as a misguided transportation plan with the wrong priorities.

Initiative 912 supporters say "traffic congestion won't get any better" because of the tax hike and the projects it will fund. "We need to send them [lawmakers] back to the drawing board if we are ever going to solve this problem," says one Initiative backer. Supporters' central argument is that lawmakers should not have enacted an $8.6 billion tax increase that will not relieve traffic congestion. The projects financed through the plan center around infrastructure maintenance, not capacity expansion.

Supporters of Initiative 912 are also angry that the legislature attached an emergency clause to the bill, which prevented the voters from overturning it via referendum. The number of signatures required to put a referendum on the ballot is half the number required for an initiative. This move, many argue, reflects lawmakers' distrust of their own constituency.

Initiative 912 opponents have started their own website, www.KeepWashingtonRolling.com. Several of Washington's largest companies, labor unions and trade associations have thrown their weight behind the effort to defeat Initiative 912. The new tax, they say, is a small price to pay for the increased safety that will come from the more than 200 road projects the new tax would fund, projects such as highway and bridge upgrades for earthquake safety. Congestion relief would have to come above and beyond all of that, and at additional cost. Initiative 912's opponents also argue that these projects will create thousands of new jobs over the next several years, although this assumption does not account for jobs lost due to the higher tax.

While Initiative 912 supporters say the Department of Transportation needs to do a better job of managing the funds it already has, Keep Washington Rolling points out that the gas tax bill includes measures to do just that. To obtain key Republican support for the tax increase bill, lawmakers appropriated $4 million to the state auditor to conduct independent performance audits of the Department of Transportation. Even if Initiative 912 passes, the performance audit provisions would remain in place.

Keep Washington Rolling says the average Washington driver will pay only 41 cents more per week under the new tax increase ("average" in this case means driving 12,070 miles per year in a car that gets 17 miles per gallon). Opponents of the tax increase counter the math by pointing out that when such incremental arguments are used every time the government wants to raise taxes, a little bit here and a little bit there adds up to a significantly larger tax burden in the long run.

Revenue from the state gas tax has increased over the years, as shown in the chart below (figure 1.2).

Gas tax collections increased five percent above inflation between 1995 and 2004. Two factors have contributed to this trend. The state tax rate has gone from two cents per gallon in 1924 to 31 cents today—an increase of more than 1,500%. Additionally, state residents now consume three times as much gasoline as they did in 1960, and the number of vehicle-miles-traveled has doubled since 1980. While a gallon is the same size today as it was in 1924, the fiscal reality is that there are many more vehicles on the road driving more miles, thereby generating more revenue for state coffers.

If Initiative 912 passes in November, it will be the second time in three years citizens voted down a large gas tax increase. In 2002 voters overwhelmingly defeated Referendum 51, which would have raised the tax by nine cents per gallon. Responding to the anti-tax sentiment that killed Referendum 51, the legislature in 2003 approved a lower increase of five cents a gallon.

Off-year elections tend to produce lower voter turnout due to the paucity of measures and candidates on the ballot, but 2005 could very well buck that trend. If the grassroots support behind Initiative 912 and the scale of organizations opposing the measure are any indication, the Initiative is sure to draw large numbers of voters to the polls in November.

For more information, see the Transportation chapter of Agenda 2005: The Guide to Public Policy Issues in Washington State at www.Agenda2005.org.

Analysis of Ref 51 by the Washington Policy Center

Will Referendum 51 Solve Our Traffic Problems?


by Eric Montague
October 2, 2002


The need for increasing the capacity of our state's 80,000-mile network of roads, highways and bridges is clear. Over the past 30 years Washington's road system has not kept pace with the needs of a population that has grown nearly 75% during that time. While there are many opinions about how to keep up with growing roadway demand, few will argue that seemingly endless congestion and hazardous safety conditions severely hamper the state's social and economic development.

Attempts to ease congestion through higher public transit spending and strict Growth Management rules have failed. Despite the efforts of planners to alter people's preference for auto travel, people in Washington continue to choose the freedom of a car for more than 93% of daily trips. After all, at no point in history have people wanted less mobility. So in November the governor and legislature are asking voters to decide if Referendum 51, or some future alternative, is the best solution for meeting the state's increasing transportation needs.

Referendum 51 is a statewide ballot measure that raises taxes and fees to pay for road building improvements. Money from the referendum would be distributed to a list of about 100 projects approved by the legislature. Here is a brief summary of what the referendum says. (A full, plain-English description is in our study "An Overview of Referendum 51," available at www.washingtonpolicy.org under "publications," or by calling (206) 937-9691.)

The measure has five parts. Part one would create a Transportation Accountability Board, with nine members appointed by the governor and confirmed by the legislature, to assist in monitoring the new spending. Part two would increase truck and license fees by 30% over two years, bringing in an estimated $232 million.

Part three would increase the gas tax by nine cents over two years, raising $3 billion. The current gas tax is 23 cents a gallon, the thirteenth highest state tax in the nation. The federal government imposes an additional 18.4 cents per gallon. Referendum 51 would increase the state gas tax to 32 cents per gallon, making our state tax the highest in the nation.

New and used auto sales are now subject to a 6.5% sales tax. Part four of the referendum would raise the tax to 7.5% beginning April 1st, bringing in $1.16 billion more, most of which would be used for subsidized mass transit.

Part five of the referendum authorizes the state to sell $4.5 billion in bonds. Proceeds would be used to pay for highway construction and maintenance. This section also authorizes a separate sale of $100 million in bonds, most of which would be spent on mass transit.

An additional source of funding not mentioned in the referendum would be the interest earned on new revenue, which would bring in about $78 million over ten years. Total revenue from all sources under Referendum 51 is estimated at $7.8 billion. Here's a summary of the new revenues.

Summary of New Revenues Under Referendum 51
9-cent gas tax phased in over two years
$ 3,039,269,000
30% increase in vehicle weight fees $ 232,989,000
1% sales tax increase on new and used autos $ 1,160,178,000
Sales tax on transportation construction $ 165,204,000
Interest earnings $ 78,106,000
Bond proceeds
$ 4,600,000,000
Less debt service $(1,460,805,000)
Total new revenue $7,814,941,000

If voters approve Referendum 51, the new tax money would be spent on projects across the state. The projects fall into twelve categories.


Referendum 51 Planned Spending
% of Total
Roads - GP $4,292,776,000 53.2%
Roads - Improvements $ 299,781,000 3.7%
Roads - HOV $ 733,531,000 9.1%
Public Transit $ 819,900,999 10.2%
Planning $ 25,315,100 0.3%
Freight Mobility $ 133,000,000 1.6%
Safety $ 92,622,160 1.1%
Environmental Retrofit $ 26,253,000 0.3%
Ferries $ 711,192,000 8.8%
Rail - Passenger $ 809,938,000 10.0%
Rail - Freight $ 96,940,000 1.2%
Economic Development $ 30,000,000 0.4%
Total Planned Spending: $8,071,249,259 100.0%

Definitions for Figure Above

· Roads - GP: These are General Purpose (GP) lanes open to all traffic.
· Roads - Improvements: These are upgrades of existing roads, such as better surfaces, road widening, adding climbing lanes on steep grades, etc.
· Roads - HOV: New High Occupancy Vehicle lanes.
· Public Transit: Government operated transit services.
· Planning: Planning includes engineering, environmental studies and other regulatory requirements that must be completed before road construction can begin.
· Freight Mobility: Projects designed to improve the movement of freight.
· Safety: Projects designed specifically to improve the safety of certain roadways and transportation corridors.
· Environmental Retrofit: Upgrades to meet current environmental regulations.
· Ferries: Dock improvements and new ferries for the State Ferry System.
· Rail - Passenger: Rail projects designed for passenger rail improvements, primarily high-speed commuter rail corridors in the Puget Sound region.
· Rail - Freight: Projects designed to improve the movement of freight by rail.
· Economic Development: Projects intended to spur economic growth in certain areas.

You might notice there is a $257 million difference between the revenue projections and planned spending. That is because some projects will take longer than ten years to complete, and because budget planners assume the federal government will provide money for passenger rail service.

Referendum 51 would fund major new projects and would help transportation spending keep up with inflation, but by itself it would not allow us to build our way out of traffic congestion. Determining whether Referendum 51 offers the best solution, or whether legislators will have to tackle the issue afresh when they meet in January, will be up to
Washington voters on Election Day.

The Case for Road Expansion articulated in 1998

Washington

Policy

Research Council

PB 97:1

March 6, 1997

Brief

Transportation’s Role in the State
Economy
Concerns about transportation infrastructure and its ability to meet the ever-greater needs of the Puget Sound
region are growing. Most of the goods and services produced in state and delivered out of state travel through this region.
Population and employment projections indicate that the state’s congestion problem will worsen considerably in the
future.
The Washington Research Council recently completed a report for the Washington Transportation Policy Institute on forecasted growth in the state economy and the transportation infrastructure’s ability to cope with that growth. The following Policy Brief represents the highlights of that report.

Growth

The state economy grows for one of two reasons. Either businesses already located in the state expand or new businesses are attracted to the state. The cost of producing goods and services is of primary importance. Other factors being comparable, a business will choose to operate where its costs of operating are the lowest. Increasingly,
transportation infrastructure is impacting business costs. Whether a business produces its own transportation or pays someone else to do it, infrastructure investment will potentially lessen costs to that business. For many businesses, the greatest impact of transportation is employees’ commute to and from work. As the commute worsens, a greater wage will be required to attract employees. An improved infrastructure serves to decrease the cost of production and delivery. In this way, economic growth depends on the transportation infrastructure.

Net Migration and Population Change for Washington State
1 98 0 - 2 02 0
160 000

140 000 Change
Net Migration
120 000

100 000

800 00

600 00

400 00

200 00

0
198 1 198 3 198 5 198 7 198 9 199 1 199 3 199 5 199 7 199 9 200 1 200 3 200 5 200 7 200 9 201 1 201 3 201 5 201 7 201 9



108 S Washington St., Suite 406 w Seattle, Washington 98104-3408 w (206) 467-7088 w FAX (206) 467-6957 w http://www.researchcouncil.org



PB 97:1 March 7, 1997


Washington’s population and total employment are expected to grow by 32 percent in the next 20 years. While nearly half of this increase will be centered in King, Snohomish and Pierce counties, others (like Spokane, Thurston,
Clark and Kitsap) will also experience significant growth. The population growth is driven by net migration into the
state. Washington is considered a relatively good place to live, work, and raise a family, but increases in congestion
could alter this view in the future.
Employment growth is primarily driven by employment gains in sectors selling goods and services out-of-state.
Currently, nearly one fifth of the aggregate output of Washington’s businesses is sold out-of-state (to both foreign and
domestic markets). Foreign exports are twice as important to Washington’s economy as they are to the national
economy. Slightly more than one in six Washington jobs was related to foreign trade in 1985. This will increase as the
global marketplace and trade along the Pacific rim expand. Exports are important for virtually every community in the
state. For example, 46 percent of our fruit and vegetable crop is sold out-of-state. Further, exports represent 46 percent
of our lumber output, 63 percent of plywood, and 77 percent of paper. In the next twenty-five years, air cargo activity for
Sea-Tac will more than double (from 381,000 annual metric tons to 880,000). Similarly, cargo activity from Boeing field
will increase from 22,000 to 78,000.



Projected Employment Growth
1995 to 2015
35%


30%

25%

20%

15%

10%

5%

0%
1995



Washington State











2000 2005


32%

24%


United States




2010 2015






Nearly half (43 percent) of the state’s exports leave by water. To meet demands projected for central Puget
Sound ports, improved port access and rail transportation capacity will be required. Trade and business leaders in the
Puget Sound Region concerned with freight mobility cite the need for the development of grade separations at railroad
crossings in the South Kingdome and Tacoma Dome areas as well as in the Kent Valley. Without these investments,
potential exporters, including agricultural producers in eastern Washington, will experience costly delays in reaching
export markets.





p. 2



Washington PB 97:1 March 6, 1997
Research Council

Just-In-Time Delivery

A recent trend toward “just-in-time” delivery has led to a greater emphasis being placed on decreasing congestion on
the states’ highways. Just-in-time delivery is a low inventory, transportation intensive production system, used to attempt
to enhance workforce productivity. Just-in-time strategies seek to eliminate disruptions in the production process,
increase flexibility in the mix and level of output produced, reduce set-up and lead times, minimize inventories an
eliminate waste. It often requires manufacturing and shipping in relatively small lot sizes, increasing the use of
transportation resources.
As large blocks of vacant industrial land become scarce in the central Puget Sound region, the need for
manufacturers to ship goods between facilities will increase. Similarly, increasing land values will extend the advantages
of low inventory production methods. As a result, more truck traffic will be forced onto the region’s freeways, where it
will face ever increasing automobile traffic. The problem will be particularly acute in suburban areas, where freeways
often already carry a disproportionate share of local traffic. The morning commute is beginning earlier and ending later.
Likewise, the afternoon commute is expanding. Savvy commuters who believe that they can avoid traffic problems are
spreading the congestion to arterials. The windows available for the transport of oversize products or the relative
congestion free transport of any product is dwindling, in both time span and uncongested roadway.


The Returns To Investments in Highways Compare Favorably With Those
To Business Investment
Average Annual Rate of Return Over Period:
1950-1959 1960-1969 1970-1979 1980-1989 1950-1989
Investment in
Regional and 47.9% 47.4% 23.8% 16.1% 33.8%
National Roadways
Business Investment 13.4% 14.0% 12.0% 11.0% 13.3%
Source:M . Ishaq Nadiri and Theofans P . M am uneas


Rates-Of-Return

There have been many studies produced which have attempted to quantify the returns to infrastructure
investment. While their methods have differed widely, their results have been quite stable. They overwhelmingly show
that the return on infrastructure investment has been greater than business investments. Nadiri and Mamuneas have done
the most recent (and widely accepted) study. Their study attempted to value the cost savings to private sector industries
that have resulted from Highway investment. From these cost savings, they calculate the rates-of-return on the Highway
investments. (A similar approach is used to calculate rates-of-return on business private investment.) The rates-of-return
calculated for Highway investment represents an underestimate of the actual benefits of any project, as there are direct
benefits to consumers that would augment these results. The rates-of-return were greatest during the construction of the
Interstate System and have tapered recently. However, the returns are still much greater that the return on business
investment.

Discussion

The pressure on Washington’s transportation system will continue to build in the future. Increased capacity is
needed if the infrastructure is to keep pace with anticipated growth. Funding this capacity will require either new revenue or more effective use of the existing revenue. In order to earn the highest rates-of-return from these resources, it is
critical that we use them efficiently.

p. 3