Bridging funding for Columbia River Crossing
Washington, Oregon, federal government struggle to determine how to pay for project
Tuesday, July 26, 2011
Knock aside the steel beams and concrete, and there’s just one thing that the Columbia River Crossing will be built upon: money.
And one of the largest public works projects in the Pacific Northwest has an unusual plan to get that money — one that relies on the federal government, two states and local tolls to pay the estimated $2.63 billion to $3.76 billion price tag.
The CRC is coming of age in an era where paying for big infrastructure projects is growing increasingly difficult, so having a diversified portfolio works in the project’s favor, Director Nancy Boyd said. Not one partner — the states, the feds or the commuters — could pay for this by themselves, she said.
“With the current state of the economy, trying to finance a project of this magnitude in any of those realms alone couldn’t be done,” Boyd said. “In my mind, you have to have all three.”
U.S. Transportation Secretary Ray LaHood has made it clear he’s a fan of the project, and President Barack Obama has mentioned it in his memos.
A steady stream of state legislators on both sides of the Columbia River have said they’re also for seeing a new Interstate 5 bridge, light rail into downtown Vancouver and up to seven interchange improvements over five miles.
But getting politicians in Washington, D.C., Olympia and Salem, Ore. to actually come up with that money will be a struggle.
Last week Oregon State Treasurer Ted Wheeler, citing faulty and inflated traffic projections, blew a $598 million hole in the project’s assumptions about how much it can earn via tolls. Pre-completion tolling starting in 2014 and federal loans are now likely part of the plan.
With state and federal commitments far from locked down, politicians are speaking more and more of limiting the project’s scope or completing construction in steps.
Congresswoman Jaime Herrera Beutler, R-Camas, has said her support is conditional and based on the results of next year’s planned sales tax vote on operations and maintenance of light rail. A proposal by House Republicans would cut the national transportation budget by 35 percent.
“Right now, things are pretty grim,” said Oregon Democratic Congressman Peter DeFazio, a long-standing member of the House Transportation and Infrastructure Committee. “It isn’t just the CRC, it’s needed infrastructure all across the country.”
Several Oregon legislators have become vocal critics of the project, while Clark County rarely grabs the attention of Washington’s powerful Puget Sound-based legislators. Both Oregon and Washington will have to include the crossing in any transportation packages they craft.
It’s not often that any road project has all of its finances in order two years before construction is set to start. But a lot has to happen before the Columbia River Crossing’s first piling is driven.
‘We’ll be ready’
The architects, designers, consultants and everyone else on the CRC’s payroll are working to wrap up a Final Environmental Impact Statement and get it to federal highway and transit authorities for approval by the fall.
That’s a time line set by the governors of Oregon and Washington this spring, and work that’s been supported by the two states which have spent more than $130 million to date.
“It is my job to assume that the timetable I’m given by elected officials is the plan,” Boyd said in an interview in early July. “It’s other people’s responsibility to come up with funding. We’ll be ready, and assume that they’ll do their jobs too.”
Bringing that money home is a key part of the equation.
“If no or insufficient money of highway discretionary funds are secured for the project, additional capital funds would be required from state sources and/or tolling,” the CRC’s financial plans show.
But there’s some question how the federal delegation can do its job.
Federal funding plans for the CRC include $400 million to $500 million in discretionary spending from a new transportation bill. But with earmarks forbidden in the House, that’s not likely to happen.
So, DeFazio said, it doesn’t matter if he or Herrera Beutler fights for the project or not.
“The Republicans, in their infinite wisdom, have banished earmarks, so her conditions matter for naught,” he said.
The federal government is also mired in debt limit talks and the country’s transportation bill is set to expire Sept. 30.
“I don’t know if all the money is going to be there to do everything on their list,” Herrera Beutler said.
The largest portion of federal funds is an expected $850 million from the Federal Transit Administration to pay for the construction of light rail. Project authorities say they’re confident that money will come through. However, the FTA requires a healthy bus system for light rail to connect to, making the results of C-Tran’s basic bus support vote this fall critical.
Without earmarks, distributing federal money falls into the hands of political appointees and bureaucrats, DeFazio said. With the support of LaHood, that could be a helpful change — but once again, there’s a lot of “ifs” involved.
“If they have a viable project, and if they have worked out their financing, and if the Republicans don’t manage to slash the transportation budget,” the Columbia River Crossing is a strong candidate for federal money, he said.
Officials in Democratic Sen. Patty Murray’s office are already lining up ways to funnel that $400 million this way — and it may not be as tough as it sounds, a staffer said. That figure is just one-third of the total federal contribution, and it can be spread out over the construction, the staffer, who did not want to be quoted by name, pointed out.
It looks likely that a program creating grants for significant freight corridors will happen, and the CRC certainly would qualify, he said. Also, there are talks of an infrastructure bank to provide grants, credit enhancements and loans to states and support multimodal projects. Other smaller grants and loan programs could also be tapped.
Murray, chairwoman of the Senate Transportation Appropriations Committee, is a powerful ally for the CRC in the federal government.
“As I have said all along, I’m going to fight for every penny that I can get for this project,” Murray said in an email. “And while Republican budgets that slash transportation infrastructure investments … will make the mountain we have to climb higher, my commitment has not changed. Local commuters and our budget strapped state can’t be asked to bear the burden of building this bridge alone. This is a critical part of our national infrastructure and it deserves federal support.”
Pressed for funds
A common theme runs through the way Oregon and Washington lawmakers talk about how they’re going to find $450 million each to pay for the CRC — a lot of hope, but not a lot of solid plans.
They’re not sure where the money’s coming from.
Washington has just convened the “Connecting Washington Task Force” to review statewide transportation needs, recommend the most promising projects for investment and identify potential revenue sources. Oregon isn’t at that point yet.
Yet the CRC’s plans assume both states will have their plans ready by June 2013.
Washington Senate Transportation Chairwoman Mary Margaret Haugen, D-Camano Island, called those goals “ambitious.”
“I don’t think its going to happen as rapidly as people would like it to do,” she said.
Haugen, along with her counterparts in the Washington House and in Oregon, all said everything’s still up in the air.
The project’s financial plans include a number of places money could be dug up, including increased gas taxes and real property contributions and public-private partnerships. In Washington, the CRC points out that licensing fees or sales taxes could be used. In Oregon, state lottery funds or increased motor carrier taxes and fees are a potential pot of money.
House Transportation Committee Chairwoman Judy Clibborn, D-Bellevue, pointed out the CRC is just one of several state projects out for money, including projects in Eastern Washington and Puget Sound. But, she said, that’s how state voters could be persuaded to pass a tax increase — by putting something in for everyone.
“I don’t expect people right now to be excited about a revenue package,” Clibborn said. “But they’ll see what it is, they’ll see what will be built and maybe there will be enough support.”
Clibborn pointed out that while $450 million may seem like a lot, Washington is spending $550 million for projects on Interstate 90, so it’s clear it can be done.
In Oregon, a number of delegates, particularly those outside of the Portland metro area, have started to grouse publicly about the CRC, making the mood in Salem much more ambivalent.
“There are Republicans and Democrats who I think are skeptical,” said Tobias Read, D-Beaverton, co-chairman of the Oregon House Transportation and Economic Development Committee.
Read said there’s a long way to go to get rural Oregonians on board.
“We’ve got work to do for people to understand, particularly those who don’t have districts that are very close to this area,” he said. “It’s one thing for a legislator to understand. It’s important for us to help Oregonians in more remote parts of the state understand about why they should care about what’s happening.”
He said that anything goes at this point when it comes to what fees or taxes could make their way into a transportation package.
He also tempered his enthusiasm to build the full Columbia River Crossing as it stands now.
“I don’t think there is a clear definition of how the financing will work,” Read said. “We have to do some version of the project and it remains to be see what it is possible to do.”
Following Oregon Treasurer Wheeler’s report, and staring funding uncertainties in the face, Oregon Gov. John Kitzhaber directed the CRC to begin looking at completing the project in phases. The Highway 500 interchange in Vancouver and the Port of Portland’s flyover ramp near Delta Park are likely the first to go.
Phasing makes the CRC “nimble enough to adjust to cash flow realities,” CRC Director Boyd said.
Read said that while the mood in his state isn’t exactly pro-tax, transportation spending is for the future.
“I think all of us have to be somewhat naïve and somewhat idealistic — we have to pursue what we think is in the best interest of our states,” he said.
Haugen put it even more bluntly: “You just have to be optimistic.”
Andrea Damewood: 360-735-4542 or email@example.com or www.facebook.com/reporterdamewood or www.twitter.com/col_cityhall.