Ericksen says reform measures could free $1.8 billion or more for transportation

Christening of the Tokiate, Washington's newest ferry. (Source: WSDOT)

Christening of the Tokiate, Washington’s newest ferry. (Source: WSDOT)

OLYMPIA… Washington taxpayers are getting one ferry for the price of three, says state Sen. Doug Ericksen, R-Ferndale, and the state is paying far more for sales tax on road projects than even most lawmakers realize.

More reason to change the way the state spends transportation dollars, says the Whatcom County lawmaker, who has taken a hard line for transportation reform this session. “If British Columbia can get three ferries for what we are spending on one, it ought to tell us we can run a tighter ship,” Ericksen said.

Ericksen makes two points:

  • By eliminating the sales tax on road-construction projects, the state might redirect $1.5 billion to $1.8 billion toward construction, under current spending proposals.
  • By improving the efficiency of ferry-construction projects, Washington might achieve significant savings – the B.C. case proves it.

Ericksen has introduced a measure, SB 5428, that would eliminate the state sales tax on public road-construction projects. He currently is working on a ferry-construction bill; earlier in the session he co-sponsored a bill that would end Seattle’s troubled deep-bore tunnel project.

“Before we consider a fuel-tax increase for transportation, we need to make sure the money is spent efficiently and accountably,” Ericksen said. “One way or another, a gas-tax increase will go to the ballot, and if we want it to pass muster with taxpayers, we need to sharpen our pencils.”

Washington’s longstanding practice of charging itself sales tax for materials used in road-construction projects allows the state to transfer gas-tax money from the state transportation fund to the general fund. The mechanism gets around a constitutional amendment passed by Washington voters in 1944 that says fuel taxes may be spent only for transportation purposes. The practice, while legal, also drives up the cost of road construction.

Most people don’t realize the size of that diversion, Ericksen said, because the effect of bonding is generally ignored. Over the last decade sales taxes took $825 million directly from transportation accounts that might otherwise have been spent on road projects. But because the state also bonds against gas-tax money, the problem has been compounded by interest charges. By the time the state pays off its bonds, interest on that sales-tax money will add a half-billion dollars, for a total $1.3 billion. Those hidden financing charges remain a problem if the sales tax is retained in any form and the state continues to bond, Ericksen said. “Think of it – we’ll be wasting hundreds of millions of dollars that might go to new highways, new bridges, and jobs for the people that build them,” Ericksen said.

The ferries make just as compelling a case for belt-tightening, Ericksen said. Last summer BC Ferries announced a contract with a Polish shipyard for three boats at a cost of $165 million Canadian. That’s $132 million in U.S. dollars, versus $144 million for a single ferryboat built last year for the state Department of Transportation.

The ferries are of comparable size. Each of the Canadian ferries will have space for 145 cars and 600 passengers, while Washington’s new “Olympic”-class ferryboats will accommodate 144 cars and 1,200 passengers. Right now Washington is building the second of three boats, for a projected total cost of $393.5 million. That’s almost exactly three times what British Columbia will spend.

“There are some differences in design, but this ought to tell us something,” Ericksen said. “Of course we can be more efficient.”