Regardless of how the legal wrangling plays out this week over the proposed referendum on the tunnel, voters will likely get a chance to vote on a significant part of the funding for the deep bore tunnel. The Port of Seattle has pledged $300 million dollars to fund a part of the tunnel project but a quick review of the Port’s budget makes it clear that the Port doesn’t have the money to cover their share. That means they’ll likely have to go to voters for a property tax increase or to get voter approved debt—or both. That means a ballot measure to gives thumbs up or down to the Port’s share of tunnel funding.
The Port of Seattle’s entire annual operating budget is about $500 million dollars. About $73 million of that comes from property taxes levied on properties in King County. The taxing authority available to the Port is about $88 million, which means about $15 million dollars that the Port could allocate for tunnel funding. Anything above that would require a vote of voters in King County.
But what about all the other revenues the Port gets from aviation fees at SeaTac airport, for example. Much of that funding can’t be used for projects like the tunnel. In fact, many of the revenue streams that fund Port operations are conditioned, dedicated or limited funds. You can’t charge the airlines more to pay for the tunnel costs. So for all the money that pours into the Ports coffers, not all of it is usable for tunnel costs.
And here’s another interesting thing to note. The Port’s budget overview shows that it’s capital budget—the budget the Port uses for construction projects like the deep bore tunnel—will drop from $410 million last year to less than half that by 2014, about $195 million for capital expenditures. And there is no sign of the $300 million anywhere in the capital budget documents, although the Memorandum of Agreement does say that much of the Port’s contribution will come in 2016 and beyond. But from where?
Finally, it is possible that the Port could issue bonds, borrowing the money for the tunnel. But there too, the Port faces state limitations on how much it can borrow without going to the voters. It’s possible that the Port might be planning to issue bonds, but that means it cuts into their credit limit. And if their debt goes too high they’ll be force to put the bond issuance up to a vote of the people. Furthermore, that means they will have to pay interest on top of the $300 million they’ve committed to. And I can’t find mention of the tunnel anywhere in their financing plan.
All of this could explain why the Port—and supporters of the tunnel project in general—continues to be coy about where it’s $300 million share of tunnel expenses will come from. I’m no expert on the Port’s budget. Why don’t they just explain?
The bottom line is that the Port’s annual operating budget is $500 million. They’ve committed to putting 3/5 of their annual operating budget into the tunnel (not all at once, but when and how?). But they haven’t put that into their capital budget or given taxpayers a hint about where it’s going to come from. Just imagine if you put yourself on the hook for 3/5 of your annual income and didn’t tell your spouse or partner how you were planning to pay for it.
It looks like the Port just can’t afford to pay for their share without a vote. If that isn’t the case the Port should just clear this up by explaining where the $300 million will come from.