How do you pay for a public project that winds up 30 percent in the hole? You stretch out taxpayers' payment an extra 30 percent. That's what the Seattle Monorail Project announced it was planning to do, extending the 1.4 percent tax on Seattle vehicle licenses until at least 2050 to make up for earlier miscalculations. Arguably, the agency is actually increasing the tax's life by 50 percent, since monorail officials once predicted the levy would last only 20-plus years, until 2030, rather than 40-plus.
Nonetheless, said SMP Executive Director Joel Horn in officially presenting a monorail contract Monday, June 20, for his board's likely forthcoming approval, "We're here today to deliver on a promise." No matter that the $1.75 billion project, once set to partially open in 2007, may not be ready for passengers until 2011, will have fewer rail miles, cars, and stations than originally envisioned, and will easily exceed $2.1 billion in costs. The new contract with builder/operator Cascadia Monorail does come with a one-year warranty, officials happily noted.
Horn told board members there's no legal cap on costs; just a $1.5 billion cap on the amount SMP can borrow at any one time. The ability to extend the tax ad infinitum should make the agency's loan bonds more attractive to buyers as well. "There are," insisted Finance Director Jonathan Buchter, "very good economics behind this."
A tax-payment extension, officials say, is essentially what voters intended in 2002 when they narrowly approved the 14-mile monorail starter line from Crown Hill to Morgan Junction. The tax revenue shortfall left SMP facing such options as further stripping the train system or going back to voters for more funding approval, says Horn. They preferred to go with the blank, undated check from taxpayers.
Of course, resolving the monorail's money problems with open-ended collections will leave Seattle vehicle owners holding an ever-weightier bag. Currently, a car valued at $10,000 will cost its owner an extra $140 a year in taxes to pay for the monorail. The total tax paid over 40-plus years might cost an owner an amount equal to the value of one car. It could be even higher in future dollars: For SMP's still shaky revenue projections to pan out, the tax base must grow. As Buchter earlier observed, more people must buy more expensive cars if the monorail is to succeed. Seriously.