IT'S HIGH NOON in Olympia, and no one is backing down. State government is hopelessly gridlocked over how to solve the funding crisis brought on by voters' approval of tax-cutting Initiative 695 last November. I-695's sponsor Tim Eyman says the politicians are lame. Eyman says we can spend the state's $1.2 billion surplus and fix the transportation system without ever missing the Motor Vehicle Excise Tax [MVET] that his initiative gutted.
Unfortunately, voters may soon learn the hard way that Eyman doesn't possess all the facts about just how rich the state really is. Road builders and regional planners say that even before Eyman became a household name, tax revenues were not keeping up with the transportation demands of our population growth. By cutting off the revenue stream MVET provided, voters have actually made gloomy economic forecasts even darker.
Being hot has its drawbacks, as any catwalk princess will tell you, and Washington state is perhaps just too damn attractive for its own good. Rick Olson with the Puget Sound Regional Council says that before I-695 passed, the state expected to see a tax shortfall of $16 billion over the next 20 years. Now that the state can no longer count on MVET, that predicted shortfall has grown to $25 billion. Olson says by 2020 the state will have 3.2 million more residents than it has now, 900,000 more jobs for them to drive to, and 700,000 new homes for them to drive from. But as I-695 has shown, levying taxes to pay for public services for all those people ain't easy. Hence the anticipated shortfall.
But you don't have to peer into a crystal ball to see a revenue shortage. According to road builders, we already have one. Duke Schaub with the Associated Contractors of Washington State says road projects are "dead" right now because of I-695. That's ironic, since the anti -car tab euphoria appeared to be tied to a desire to see more road construction, not less. Schaub says the current funding need for road projects, which includes everything from safety improvements to new construction, comes to about $30 billion. Last year the state could only budget about $4.02 billion of the demand. I-695 has knocked the road allotment down to about $3.2 billion. "We're in danger of losing this construction season," says Schaub. In other words, builders are twiddling their thumbs on these nice spring days when they could be building your new road. Schaub says that contractors never got the go-ahead for projects that were supposed to commence in March, and he isn't optimistic that April will be a more productive month. Lawmakers aren't likely to come up with magic solutions to jump-start construction anytime soon.
Meanwhile Eyman suggests that the $1.2 billion state surplus could not only cover road construction but also save bus and ferry routes, public health clinics, and all the other services formerly funded by MVET. Eyman says if the state suffers because of his ballot measure, it is the politicians' own fault for not using the surplus.
Always a sharp knife, state Sen. Valoria Loveland, D-Pasco, who chairs the Senate Ways and Means Committee, anticipated this suggestion. She proposes taking $300 million of the surplus to make up for I-695 cuts.
But House Appropriations co-chair, state Rep. Helen Sommers, D-Seattle, points out it took years to build up that surplus. Would it be wise to spend it when anti-tax sentiment threatens the state's ability to gather revenue in the future? To use it now to make up for I-695 would be like "spending your checkbook balance down to zero," Sommers says. Instead of using the surplus, Sommers and her House colleagues suggest funding transportation with general fund money.
But the general fund pays for education. And the Senate is loath to make public schools bear the brunt of I-695 cuts.
The third "solution" would be to simply put the crisis on hold until next year. Both chambers have agreed to immediately siphon off some general-fund money to local governments and transit districts, and to the ferry system. Loveland says most everything else I-695 has hurt, including long-term road planning, may have to wait until next year's session. By then, voters may have passed yet another Eyman initiative that will make the state's funding crisis even more difficult to solve.