Toll Revenue Projections Plummet for Costly Waterfront Tunnel as Drivers Stay Away

By Erica C. Barnett

Revenues from tolls on the SR 99 tunnel, which replaced the Alaskan Way Viaduct on the downtown Seattle waterfront, are coming in much lower than the state Department of Transportation assumptions, and will continue to do so into the foreseeable future, the state treasury department told the Washington State Transportation Commission this week. Deputy state treasurer Jason Richter told the commission that the new projections likely represent a “permanent reduction” in toll revenues, which pay for construction debt, ongoing maintenance, replacement and repair costs, and a loan from the state’s motor vehicle account.

In May of this year, for example, the state collected just under $5.7 million from tunnel tolls, about $3 million less than projected last year. That trend extends into future projections, which show a shortfall ranging from around 16 percent over the latter half of the 2020s to 30 percent or more in the future. In some years, according to the latest projections , toll revenues won’t be enough to cover debt service on the $3.4 billion tunnel and waterfront roadway project. By 2026, the projections show the tunnel project about $2.5 million in the red, and “then the difference starts to climb at a pretty uncomfortable clip,” Richter said, with a cumulative negative balance of more than $200 million projected 25 years out.

The state can make up for some of the shortfall, Richter told the WSTC, “but I’m suspicious that that’s not going to be sufficient to cover the entirety of this issue, given that the shortfall in a lot of years is equal to roughly a third of the revenue coming in.”

The COVID pandemic had unprecedented impacts on traffic into and through downtown Seattle, changing commute patterns and reducing the number of cars on every road. During 2020, the number of people using the tunnel plummeted to less than 40,000 vehicles a day, and that number has not increased much even as other roads, like I-5, have started to approach pre-pandemic traffic levels. Gas prices, which are currently at unprecedented highs, have also caused people to rethink how they get around, combine trips, and avoid unnecessary driving.

But even before the pandemic and $6 gas prices, people weren’t using the tunnel nearly as much as WSDOT predicted they would; in fact, once tolls went into effect in 2019, the number of vehicles using the tunnel dropped by 28 percent to fewer than 60,000. Contacted by email, WSDOT toll division spokesman Christopher Foster noted that “prior to the pandemic, trafficvolumes in the tolled tunnel were exceeding forecasts,” but both the forecasts and “baseline” tunnel usage are moving targets; while the tunnel was originally justified on the grounds that 130,000 cars would use it every day, the state has continually adjusted its forward-looking projections downward in light of actual traffic volumes.

One of the major reasons people aren’t driving in the tunnel is that there’s no real incentive to use it: If you can from point A to point B quickly and conveniently for free, why would you pay for the privilege? If you’ve driven in the tunnel, you’ve probably noticed that it often feels like an empty highway in the middle of the night—people avoid the tunnel in favor of existing surface streets, including the currently two-lane surface Alaskan Way, which WSDOT is currently widening into yet another highway.

Cary Moon, the founder of the People’s Waterfront Coalition, which advocated against the tunnel, is reluctant to say “I told you so.” But she will say that the data WSDOT used to justify building the tunnel—which initially projected 130,000 vehicles would use the tunnel every day—was “a joke” even before COVID came into the picture.

“Driving alone, especially in the tunnel, is dropping significantly and that’s’ a good trend long term,” Moon said. It’s also “what we knew would happen. … If we had invested in the right infrastructure, can you imagine what we could have done?”

But to WSDOT, despite its stated commitment to sustainability, the best outcome is one in which drivers get back in their cars and start using the tunnel again. The state could continue to boost toll rates, which currently range from $1.20 to $2.70 each way, to make up for lost revenues, and undoubtedly will, but higher tolls tend to lead to more diversion and people making different travel decisions. It’s a delicate balance.

“I think the transportation commission is doing their best to set tolls at a level that covers costs but also doesn’t cause excessive diversion,” Richter told PubliCola. The negative balance in WSDOT’s tunnel account is “cumulatively growing to the point where there’s going to have to be a conversation with legislators, as well as the transportation commission, to come up with a viable way to solve this,” Richter said. In other words, the legislature needs to come up with a solution, and funding, because the tunnel’s financial underpinnings are shaky.

“The bills have to be paid, and I have no doubt they will be paid—it’s going to be a question of, how do we do so without causing harm to the corridor and do so in a sustainable manner?”

 

7 thoughts on “Toll Revenue Projections Plummet for Costly Waterfront Tunnel as Drivers Stay Away”

  1. I used the viaduct because the downtown exits were convenient. The tunnel has never served downtown. It is just a bypass. I never need to go where it goes, and so will never use it. I use the 520 toll bridge because it serves a function for me. The tunnel, conceived as a bypass, ignored the fundamental need to get in and out of downtown.

  2. How could anyone be surprised by this? This was always a giveaway to the developers to be paid for by all of us at the cost of convenience and a much lower price we could have paid to repair the viaduct. As for those who talk about the waterfront being blocked off…well, as a native I don’t go down there anymore anyway because it appears to have been given over to businesses caterfing to tourists. There are too many other options that don’t involve problems parking and high prices. And the big buildings up and going up will make a far more effective wall than the viaduct ever did. Stupidity and corruption have reigned there. I’d like to see them bill just the people that pushed for this boondoggle and leave the rest of us alone.

  3. I bike more than I drive, but I hate paying road tolls and will do almost anything to avoid them. That includes driving I-5 or Seattle city streets to move past downtown. But now that surface traffic has returned to jam levels, I’m using the tunnel more often. I suspect others will make similar choices over the coming year.

  4. Not sure what the best alternative was here but it is SOOO nice not to have a noisy dirty freeway at eye-level when walking on the waterfront or other pedestrian zones like Pike Place Market. I do not miss the viaduct and it was not long for this world with its structural issues. It will take longer to pay off the tunnel and WSDOT will think twice about another mega-Seattle project. Onward.

  5. Idea for your next article- how Sound Transit light rail has gone billions over budget – partly due to inflated fare recovery efforts.

  6. I wonder what else $3.4 billion could have paid for…

    With any luck (or introspection) this should be the last major road project Seattle considers.

  7. I drove thru the old free tunnel dozens of times a day for many years but would never pay toll to do so.

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