In Support Of The Monorail

Unlike some who believe the Seattle Monorail project will cost too much, and therefore should be terminated, I should remind people that the final bill for this project will not be substantially greater, relatively speaking, than originally projected when voters approved the Monorail (on four separate occasions). The original estimate was $1.75 billion. The current estimate, a number of years later, is now $2.1 billion.

What is concerning those who would now wish the project stopped is the projection of the overall cost after 40 year bonds have been paid off, which will be $11.4 billion according to projections. The major reason for the ballooning costs is the length of the bond, which originally had been expected to last 25 years. However, shortfalls in finances from the car tab payments have caused the need for a longer bond period.

What nobody seems to be asking is why there is this shortfall, and how can it be corrected.

Certainly part of the problem has been that many people have registered their cars at addresses outside Seattle, some illegally to avoid the tax. So the Monorail is suffering a shortfall due to people illegally bypassing the tax.

Nowhere along the line has any alternative tax been introduced, surely because the Monorail is being asked to sink or swim with what it was given, rather than political figures looking at creative ways to address the tax shortfall.

Meanwhile, commentators are bemoaning the fact that financial limitations have cause the design of the system to backpedal from the sleek to the utilitarian.

The project is now in a period of public review and comment, so people can chime in with their thoughts on all this, and they are. In that light the Monorail project has issued a response to the latest concerns about the costs:

The newspaper is correct when it adds all of those future interest payments together and gets to around $11 billion. However, the value of these interest payments in 2005 dollars is closer to $1.9 billion, or roughly the same as the total cost of the Project which is just under $2 billion (in 2005 dollars). Keep in mind that most of the dollars added up and presented in the Seattle PI article will be paid 30 or 40 years into the future, when a dollar then is worth about 10 to 15 cents today.

It is similar to when someone buys a home with a 30-year mortgage and the interest payments over the 30 years end up being greater than the initial price of the home.

In addition, consider that 40 years ago, tuition to the University of Washington was about $100 per Quarter. The price is now closer to $2,000 per Quarter. Because of the unquestionable benefits of the UW, Seattle would have been quite shortsighted to shut down the UW in 1960 because the cost of tuition 40 years later would be 20 times higher.

The response continues...

The recommended strategy to finance the Green Line fits within the voter approved plan. It caps the annual MVET (Motor Vehicle Excise Tax) tax at 1.4% and it collects the tax only until the Green Line debt is repaid. After that, the tax will end. It is unusual for a government agency or a large transit agency to have a plan to end a tax entirely, but that’s what the SMP will do.

...

Sound Transit has a very different tax and debt structure from the Monorail. They use predominantly sales tax and we use only MVET tax. They are able to pay their debt off faster than the Monorail so their total interest is lower.

So, this is the Monorail project we not only asked for, but the outcome we essentially forced into being. We could have not skirted the tax by registering cars elsewhere, or we could have allowed for alternative means of financing the project. But Seattleites didn't. What Seattleites did do is approve the project four times, and that, at the end of the day, should stand for something, and not just a vote. It should mean we back the project and positively look for solutions when problems arise. It should me we support the Monorail project when the going gets tough, as these projects invariably always discover they do. (nwphtt55)