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Overview of the Governor's Proposed

Transportation Program

1997-99 Current Law
1997-99 New Revenues
Appropriations $2,746.2 million $2,480.0 million $3,107.2 million Net change from 1995-97 -$266.2 million $361.0 million Percent change from 1995-97 -9.7% 13.1%

B Y THE YEAR 2000, Washington State's population is expected to grow to nearly six million people, representing the fastest rate of growth since World War II. This dramatic population increase will put significant additional pressure on the state's already burdened transportation system.

In addition, Washington is experiencing strong economic growth. Recent tax incentives have helped bring major high-technology businesses to the Northwest, promising tens of thousands of new jobs. This trend requires a modern transportation system, capable of meeting increased demands for transporting products to market and employees to work.

To respond to these pressures and help ensure that Washington's transportation system can sustain the state's economic growth and quality of life, Governor Lowry is proposing a $3,107.2 million budget for the Department of Transportation (DOT) in the 1997-99 Biennium. The Governor's budget makes the necessary investments to meet the state's transportation needs.

The budget proposal also includes a plan for financing these investments. As Washington State growth has outpaced the transportation revenue sources that finance today's transportation budget, this plan puts forth a new revenue approach that responds to critical needs and provides more flexibility in directing resources toward a variety of mobility demands.

Setting a Course for the Future

In the past, most of the state's ground transportation problems have been solved by adding a lane or building another highway. Today, that solution is simply not enough. The state's crowded metropolitan areas will not sustain this approach, nor will additional lanes alone be sufficient to handle the vast number of cars and trucks that would use them. Instead, Washington must do what other states and countries have already done build multi-modal alternative transportation solutions that will enable people and goods to move more efficiently and reliably. Puget Sound-area citizens recognized that need in November 1996, when they voted to support the state's Regional Transportation Authority (RTA).

The policy debate about the best mix of transportation alternatives will no doubt continue, and technology will offer new solutions in the future - yet Washington faces a crossroads today. Without a commitment to invest in a broad-based transportation system that meets current and future needs, the state's economy could fall victim to its own growth.

The Governor's budget proposal will help expand mobility choices by providing new support to public transit, passenger rail, and some private, non-profit services that serve people with disabilities and special transportation needs.

High Occupancy Vehicle (HOV) lanes in the central Puget Sound region are a great success story, but the system must be finished quickly. Additional HOV lanes will enable the current freeway system to substantially increase capacity and, through projects coordinated with RTA, will allow buses and carpools to move quickly and safely. The budget provides revenues sufficient to support bond financing to fund completion of the core HOV system within 12 years.

Major new investments to promote transportation alternatives include:

Highway Improvement Projects

The budget proposal offers a plan for investment over the next six years that builds on the strengths of today's system by also funding traditional highway mobility projects. Thousands of drivers in both urban and rural Washington rely on the state's highway system every day, and important projects must move forward quickly to offset growing congestion.

The budget reinforces the Washington State Transportation Commission's commitment to highway system preservation, operation, and safety. At the same time, it provides a balance of expenditures for projects in all areas of the state including rural and urban centers with projects both east and west of the Cascades. Completion of the core HOV lane system will directly benefit residents of the Puget Sound area while also improving statewide access to the region's ports. Rural areas of the state will benefit from freight rail investments and construction projects aimed at repairing all-weather roads and rebuild bridges that do not meet height and weight limits. Also funded are rural mobility, bicycle, and pedestrian improvements and other projects to support tourism.

The budget targets investments in freight mobility to keep Washington competitive in the global marketplace. Through funds allocated to DOT, the state will be able to partner with other transportation providers to address freight mobility, and rural public transportation, and local development mitigation.

Highway-related elements of the Governor's proposal include:

Transportation Financing to Keep Washington Moving

To prepare adequately for the transportation needs of the future, Washington State needs an efficient multi-modal transportation system that meets the needs of businesses and individuals and is supported by broader sources of revenues.

Historically, transportation financing has relied primarily on the gas tax, with supplementation from the Motor Vehicle Excise Tax. Today, the state-imposed gas tax rate is 23 cents per gallon ranking Washington 17th among all states in fuel tax rates.

Unfortunately, while project costs grow with inflation, the gas tax does not. In addition, the 18th Amendment to the State Constitution limits the use of gas tax proceeds to only highway-related expenditures. A more flexible funding source must be created to finance the multi-modal mix of transportation investments that are now necessary.

To meet the state's changing transportation needs, the budget proposes that the current state sales tax of 6.5 percent be extended to cover the purchase price of fuel at the gas pump. Based on an average per-gallon cost of $1.30, the proposal would increase the cost of a gallon of gas by approximately 9 cents.

In addition, the budget proposes the issuance of $1.7 billion in bonds to finance completion of the HOV core system, as well as $230 million for urban/rural mobility projects.

The proposal also authorizes counties and cities, through a local vote, to place an optional local sales tax on fuel. Any new revenues would be used to fund priority transportation projects that have been included in the regional Transportation Improvement Program plans which are approved by the Metropolitan Planning Organizations.

Where ever the electorate has already voted to impose a local option sales tax, such as for the RTA or local transit districts, these entities will receive the additional revenue from the sale of fuel in their districts. Counties and cities can vote to impose the sales tax on fuel for local transportation needs. Smaller junior taxing districts that already collect a local option sales tax for criminal justice and public facilities would receive the revenues collected from the sales tax on fuel if a county or city exercises the local option.

This revenue proposal also generates enough funds to support the expected operating costs for the Washington State Patrol over the next six years, without implementing an increase in vehicle registration fees.

The Alternative to Adequate Funding

State transportation revenues that are available under current law are not sufficient to meet the growing demands on the system. Federal funding for the state transportation program is decreasing, current bond authorization is being exhausted, and current gas tax revenues are growing at only 2 to 3 percent annually. The transportation budget that is affordable within existing revenues can only provide for funding of maintenance and preservation. Preservation of the existing transportation system is a major priority. However, a transportation budget without new revenues means: