For years, backers of the CRC highway mega-project have been playing a spin game. They’ve designed an enormously expensive five-mile-long highway expansion project with six highway interchanges, including one costing around $600 million. They’ve cloaked the highway expansion effort by calling it a bridge and the project the Columbia River Crossing, even though the river crossing is a small portion of the cost (more than half of which is highway interchanges), and about an eighth of the length of the project.
Despite this cynical maneuvering, CRC backers aren’t able to escape basic math and this fact: money doesn’t grow on trees. At about $4,000 per family in the region, the project is the most expensive public works project in the region’s history. At the end of the day, someone has to be responsible for the billions.
While blowing through $130 million of taxpayer money, project managers have told themselves a story: roughly one-third of the nearly $4 billion cost would come from the federal government, one-third from the states, and one-third from tolling (the $4 billion estimate may well be another fantasy).
All three of these pots of money are highly suspect. U.S. House Transportation Chair John Mica is pushing to cut federal transportation funding by a third. Neither the Oregon nor the Washington legislature has contributed their share of the project, beset by maintenance costs and other projects, as well as having healthy skepticism about the CRC fantasy. And perhaps the weakest link -- though admittedly the competition is fierce? Tolls.
Luckily, Oregon and Washington have these people called Treasurers, who take responsibility for making sure states don’t bankrupt ourselves in our rush to bend under political pressure.
Today Oregon Treasurer Ted Wheeler released a damning report. From the Willamette Week:
"Key assumptions in the traffic and toll revenue forecast used in the 2008 [Draft Environmental Impact Statement] are now outdated," Wheeler's report says. "The combined impact of of Washington State Treasurer McIntire's requirement that CRC adopt a more conservative toll bond debt structure and the potential toll revenue reduction of 15 percent to 25 percent is a $468 [million] to $598 million reduction in projected CRC funding resources."
Get that? A half-billion dollar hole.
What does Washington State Treasurer Jim McIntire have to say about the current CRC financing plan? The Oregonian’s Jeff Manning is on the case, with a devastating article today:
McIntire compared the debt structure to the worst sort of toxic mortgage from the housing boom. The loans turned disastrous for the banks, the borrowers and the U.S. economy when millions of homeowners couldn't keep up with the onerous loan terms and defaulted.
Let’s be clear: the tolling financing is a balloon payment, predicated on ever-increasing traffic and toll levels. Ever-increasing traffic at the projected levels is a falsehood. Ever-increasing tolling rates are a political nightmare.
"I would argue that [the tolling plan is] a pipedream," McIntire said last week. "I think we need to be upfront with people. We need level debt service and level tolls."
We have recent experience with tolling projects. Washington’s 2007 Tacoma Narrows Bridge, funded by tolling, hasn’t been able to keep up. From The Oregonian:
The Washington Transportation Commission has not raised tolls as quickly as forecast, in large part because of local opposition. As a result, the bridge has struggled to maintain the financial reserve mandated by the state.
"The Tacoma Narrows is something that I don't want to see replicated anywhere in Washington State and that includes the bridge between Washington and Oregon," McIntire said.
So, fixing the toxic mortgage, as well as other problematic assumptions in the current plan, will cost several hundreds of millions of dollars. It's hard to know how to put that in perspective. The Sellwood Bridge shortfall? $22 million. The OHSU tram costs, even with all the overruns? $57 million.
Manning’s article also explains how the highway departments have been using traffic models that don’t take tolling into account. The traffic projections deserve their own column, which I hope to get to. For starters, check out this Sightline article demonstrating highway builders will simply ignore the evidence and play in their fantasyland.
It’s long past time for our Governors, members of Congress, and legislators to put the brakes on this run-away project. It’s long past time for The Oregonian’s editorial board to read their own paper’s news articles and pull their support for the bloated, risky highway mega-project.
Hopefully all those folks will heed the wisdom of the state Treasurers, and accept the reality: the money tree has not been found. We shouldn’t sign on to a toxic mortgage. Instead, it’s time for an affordable, responsible solution.