I-5 bridge tolling is expected to bring in $1.1-1.6 billion, and the original legislation would’ve authorized up to $1.6 billion in debt. Now? Up to $2.5 billion.
OLYMPIA, Wash. — The start of tolling for the Interstate Bridge Replacement project is only about a year away, and the Washington legislature is getting ready for the next step in the process: authorizing the sale of bonds to fund construction of the new bridge, to be paid back over time with the toll revenue.
An authorization bill has been introduced the state legislature, and it picked up a notable amendment last week. The latest version of the legislation raises the proposed authorization limit to $2.5 billion, a figure that stands out because it’s $900 million more than the maximum amount of tolling revenue listed in the project’s current financial plan.
That plan pegs the project’s estimated cost at somewhere between $5 billion and $7.5 billion, with $6 billion as the most likely number. Washington and Oregon have each pledged $1 billion for the project, and the federal government has thrown in $2.1 billion so far, with the project team still pursuing another $1 billion federal grant.
The rest of the cost would be covered by tolling. The financial plan estimates that the tolls will need to bring in somewhere between $1.1 billion and $1.6 billion — and the original version of the Washington bill matched the upper end of that range, authorizing up to $1.6 billion in bonds.
The catch — and what makes the increase to $2.5 billion stand out — is that the current financial plan is more than two years old, dating back to early 2023. There’s a new cost estimate and financial plan due out later this year, and in an era of high inflation and rising construction costs, it wouldn’t be unreasonable to expect that the $6 billion price tag is going to go up.
The big question: if it does, what would that mean for the tolls?
Placeholder toll rates
The actual toll rates haven’t been set yet, but there are placeholders. The Oregon and Washington Transportation Commissions are scheduled to set final rates this summer, and last year, they narrowed it down to four possible tolling plans to advance to a more detailed study.
All four scenarios use variable-rate tolling, meaning the tolls change depending on the time of day. And they all assume the tolls will start on the current twin bridges in the spring of 2026, and they all have built-in hikes every year or two.
The first three plans use placeholder tolls ranging from $1.55 to $3.90 — one way — while differing on details like how many times per day the rates will change, how much higher the tolls will be for heavy trucks, and when to add a discount program for low-income drivers. Each plan would bring in about $1.24 billion in revenue.
The fourth plan uses higher rates ranging from $2 to $4.70 and would bring in an estimated $1.6 billion in revenue, in order to account for the upper end of the required toll revenue range in the project’s financial plan.
Raising the limit
Oregon and Washington have both already authorized tolling on the bridge, so the bond authorization is the next step. Washington has introduced bills to do it in both the state House and Senate, and each one originally authorized $1.6 billion before being amended last week to raise it to $2.5 billion.
During a fairly brief committee discussion about the Senate version, Sen. Marko Liias, one of the bill’s chief sponsors, stressed that the amended bill’s language says “up to” $2.5 billion and that it was only an authorization — the legislature will still need to take future action to actually issue the bonds.
“The $1.6 billion was based on a past traffic and revenue study,” added Hayley Gamble, the committee’s budget coordinator. “There is a new one underway; we are expecting a lot of changes in the future on that project, and there’s a lot of unknowns, so Sen. Liias is offering a larger number that may or may not be needed in the future.”
Liias’s office echoed that rationale in a follow up statement to KGW, writing in an email that the proposed larger bond authorization would “provide additional capacity should it ever be necessary over the life of the program.”
KGW also reached out to the Interstate Bridge Replacement team with two questions: Does the higher debt limit reflect an expectation that the project costs are going to go up? And could this mean the final tolls could be higher than the placeholders?
They responded with a statement:
The 2023 financial plan is the most current for the program. The 2023 financial plan identified a cost estimate range for IBR Program investments of $5 billion to $7.5 billion, with $6 billion as the most likely number. Past estimates confirmed a toll funding range of $1.1 billion to $1.6 billion on the Interstate Bridge. The program will continue to refine cost estimates and funding sources as we move through the environmental process and advance design.
Toll rates for the IBR Program will be jointly set by the Oregon and Washington Transportation Commissions to support the toll funding amount identified in the program’s financial plan. The bill authorizes bond sales up to that amount but does not provide direction to do so.
Liias’s office similarly wrote that “the two commissions set rates based on the financial plan, not the amount authorized for bonding. Traffic and revenue analysis is ongoing, but there has not been an updated forecast since the [2023] one.”
The takeaway appears to be that the 2023 price tag is still considered current and accurate — unless or until the new cost estimate say otherwise.
The question about whether an increase in the project cost could lead to higher tolls did not get a direct answer.
Who takes on the debt?
Since even the $1.6 billion version of the bill appeared to authorize debt equal to the total amount of tolling revenue in the 2023 financial plan, and since toll collection will be handled by Washington, KGW reached out to the Oregon Department of Transportation to ask if that means Washington is going to take on all of the debt.
The answer appears to be no. Oregon still has to authorize its own debt, according to ODOT assistant director Lindsay Baker, and after that, the states can start hashing out who will take on what.
“While I can’t say with any absolute certainty what the specific debt mix will ultimately be, particularly as both states’ legislatures and commissions still have work to do, our overall commitment is to share project costs equally between the two states,” she said.
