This is far and away the most responsible official traffic forecast I’ve seen from any government agency, ever:
It’s from a new transportation revenue forecast (pdf link, see p. 27) recently published by the Washington State Office of Financial Management. Their forecast from last September, in pink, assumed that traffic would grow endlessly, much as it did during the 1950s through 1990s. But the new forecast, in blue, assumes that the modest traffic growth of the past decade will continue, and will then be followed by a slight decline.
There are two reasons why this forecast is such a refreshing change. First, it reflects the growing empirical evidence of a long-term slowdown in the growth of vehicle travel, evident on major roads in Washington, for Washington State roads as a whole, for the US, and for much of the industrialized world.
Second, even if the forecast is wrong, assuming that traffic won’t grow much is the most fiscally prudent way to plan a transportation budget.
For far too long, “build now, pay later” has been the transportation budgeter’s mantra. In the 2000s, for example, Washington committed itself to massive road projects that it didn’t have the money to build. So the state floated bonds, assuming that revenue from gas taxes would show up to pay them off.
That hasn’t worked out so well. Traffic didn’t grow as expected, and gasoline and tolling revenue has gone AWOL as a result. Gradually, planners have come to realize that debt service will swallow up most of the state’s gas tax receipts, crowding out everything else. As the chart below shows, WSDOT predicts that within a few years three-quarters of the state’s gas tax receipts will pay for old projects.
And because so much of the state’s gas revenue is going to pay off old debts, state and local governments simply don’t have the money to keep existing streets and roads in good repair—let alone complete projects, such as the SR-520 bridge, that we’ve already started. And there’s even less money left for the transportation priorities where demand is actually growing, such as walking, transit, and biking.
When you find yourself in a hole, the first step is to stop digging. And that’s exactly what this new forecast does: it helps transportation policymakers stop digging all of us deeper into highway-fueled debt. By undermining both the rationale for new roads and the belief that we’ll be able to pay for them, a forecast of flat traffic should help inject a needed dose of reality into the state’s transportation debates.
Of course, there’s no telling whether this forecast will be right. As Yogi Berra allegedly said, predictions are hard, especially about the future. But if it turns out that this forecast underestimates traffic growth, budgeters won’t find it such an unpleasant surprise, since more traffic will bring more revenue from drivers. And at this point, finding a bit of extra revenue to deal with emerging problems beats what we’ve got now: not having enough money to pay for expensive solutions to problems that never really showed up.
(Hat tip to Ben Serrurier for pointing this chart out!)
Weezy
That realistic traffic forecast also undermines the argument for the kind of fixed rail projects Sound Transit’s backers advocate. If Sound Transit financed its rail projects the way the other dozen new rail systems that have opened since 1980 in the country it would be be no big deal. But Sound Transit is abnormal: its deviant financing plan involves massive levels of new regressive taxing used to secure a mountain of new long term bonds.
This piece notes how WSDOT’s financing of roads projects using gas tax revenues as security for bonds is both problematic and perhaps unjustified in light of reality. The same goes for Sound Transit’s financing practices — in spades. The latter’s financing practices in fact are far worse. Gas taxes are paid by drivers in rough proportion to their use of roads, whereas there is NO nexus between what a struggling single mother pays in sales tax to how much additional profit a large commercial property developer reaps from a proximate light rail station (those are the main financial beneficiaries of a light rail system).
Phausto
Leaving out the fact that trains are a much more efficient way to move things, and that a single mother who no longer needs a car because she can commute for a tiny fraction of the cost, I could get worked up.
Weezy
Sound Transit’s trains do not move “things” and next to no struggling single mothers commute using those trains.
Last week Clark (I believe it was Clark) commented that he wished opponents of upzoning would have to identify themselves in comment threads as single family residence owners, presumably so their opposition to upzones and more boardinghouses (that is what apodments are considered under the SMC) in single family neighborhoods could be discredited as the complaints of a self-interested homeowner. Reading the “Phausto” comment puts me in the same frame of mind. I think Sound Transit’s fans who post anonymously should disclose who writes their checks. Around here, those posing as fans of Sound Transit supposedly because it is “green” in fact support it because they get a cut of the green it confiscates from the households least able to afford those heavy regressive taxes.
Let’s get back on topic. WSDOT’s wildly-inflated traffic congestion projections dating back 20 years were the primary justification for all Sound Transit’s rail undertakings. Due to the abusive, aberrant tax confiscation scheme it employs, and given WSDOT now is backing off its inflated congestion projections, it is entirely appropriate to question the direction that unaccountable municipality is headed.
Anyone want to discuss that issue?
Clark Williams-Derry
Wasn’t me, Weezy. I don’t even know what you’re talking about.
Weezy
Sorry about that Clark. It was Eric De Place, here:
http://www.sightline.org/2014/10/08/seattle-goes-backward-on-micro-housing/
“Final thought. I wish that everyone who lobbies to restrict housing choice would have to identify their own status. Do they own their own home? Are they a landlord? Because if you own your home — and certainly if you are a landlord — your basic economic interest is that property values and rents to go UP, not down.”
A
Interesting implications if this same VMT trajectory holds across BC & OR. With most of those jurisdictions looking at some form of road user pricing as an alternative to gas taxes (because of increasing efficiency and prevalence of zero-emission vehicles), it would seem to imply that governments are now looking at replacing a declining revenue source (fuel) with a different, declining revenue source (VMT)? They’ll decline at different rates, no doubt, but it does lead to some interesting policy questions around whether user fees on their own can be a “sustainable” form of future funding for transportation infrastructure.
Weezy
A new revenue source should be variable tolling at key points. All the bridges into San Franscisco have been tolled for years, and the tolling of the Tacoma Narrows Bridge and the SR 520 crossing of Lake Washington each are successful.
Attacking the demand side of road use with a revenue raiser is entirely appropriate, and it should be employed on I-5 north and south of downtown, and on the I-90 crossing as well. Revenues should be used primarily to improve the highways from which they are derived. BIG fan of that kind of user fee here. Oh, and to reduce the temptations that seem to drive the government heads here, those revenues should not be used as security for bonds. Government heads here can not use taxes or fees for bonds in responsible ways (they get too greedy and it feels like free money to them).
Weezyisajoke
I’m a struggling married guy with a family who commutes on the ST Link as much as I can to and from work. Does that count? Because of its reliability, we may even be able to ditch one of our cars and save something every month instead of living paycheck to paycheck.
Weezy
I’m glad it works for you. It does not work that way for 99.9% of the people subject to that municipality’s aberrant taxing scheme. That’s because — unlike you — virtually everybody else within those gerrymandered boundaries does not live AND work near a station. That reality won’t change even if all 30-some planned stations are built.
This thread addresses how future traffic projections are considerably lower than they had been. Those lowered traffic projections undermine the argument that Sound Transit’s proponents relied on as justification for its fixed-rail undertakings. Given the abusive financing plan being set in to place, isn’t it an appropriate time to engage in a civic conversation about whether heading down the path the unaccountable board of that municipality chose REALLY is in the best interests of the 99%?
Want to discuss that?
JonCracolici
Weezy, you are sidetracking pretty hard. This article has nothing to do with ST. The similarity you are sinking your teeth into is that both WASDOT and ST can recieve money from bonds issued with the idea we will pay them with future revenue. This, as a general practice, is a totally normal thing for a government to do. You dont have to like it. But its not some crazy thing.
The problem that this article points out is that the state had reason to believe their previous gas tax revenue projections were inaccurate. That is not an indictment of all bonding schemes.
Also, generally, my unsolicited advice would to not try to make an argument about the single mothers. If you don’t have studies to back up what you’re saying, then you’re just creating an unfortunate, fictional person, and saying “what about them?”
Weezy
What’s unique — and uniquely abusive — about the financing plan the unaccountable political appointees controlling Sound Transit’s board are setting in to place are the taxing pledges. That board adopts new local laws requiring that oligarchy to confiscate regressive taxes at or near the maximum amounts merely as security for the bonds, and continue that excessive taxing during the entire three-decade stretch those bonds are outstanding. NOBODY finances transit that way.
Your post is made up of two misleading suggestions — 1) that the financing plan Sound Transit’s board decided to use is normal, and 2) that WSDOT’s new realistic traffic forecasts don’t implicate the purported justification for Sound Transit’s fixed rail projects with their abusive financing plan.
Phausto
Phausto here again, to reassure Mr Wheezy. Yes, I own a single-family, but am not a landlord. I’ve owned the home for many decades, won’t be selling, and don’t use it as a ATM machine, so in that regard I don’t really care about property values. But I would like this city to have some transit options and diminish the horrid traffic.
If you’re really worried about regressive taxes, maybe a “Want to discuss that?” about a state-income tax would be better.
Sound Transit doesn’t move things? A purse, a book, a office worker. It’s a technical term in some circles (along with “stuff”). And no struggling single mothers? I happen to work with one, but what do I know…
Rachel Maxwell
Love the idea but do you have the actuals for this year and September 2014? How do they compare to the forecasts? It looks as though the history/actuals indicated only go through 2013. As a commuter – it seems gruelingly worse than ever.
OlyDave
I’m not sure this is such a significant change as it applies to projected revenues. If you look at the source document you will find the following confounding statement: “Historical VMT forecasts were consistently higher than WSDOT fuel consumption forecast. These changes bring VMT forecast in line with fuel forecast.”
And if you look at the actual revenue forecast you will see that they have actually increased the revenue projections (albeit by a small amount). As far as I can tell this major adjustment in VMT projections did not significantly affect the revenue projections. What am I missing?
Clark Williams-Derry
Dave –
Yes, confounding. But as far as I can tell, the new VMT forecasts have not yet fully filtered into gas tax revenue projections. I need to check on this still. But if VMT is expected to flat-line, but MPG is still expected to rise, I’d expect the next iteration of the gas tax revenue forecasts to decline.
FYI, when I looked at this a while back, and “back-casted” presumed VMT from the published fuel consumption and MPG forecasts, I found that the gas tax forecasts presumed that VMT would rise steadily. But if VMT remain flat and MPG is still slated to rise, I’d expect that gas tax forecasts will fall, once the VMT forecasts are incorporated into the overall revenue models. So I think it’s possible that the revenue forecasts were made before the VMT forecasts were published.
So I’d expect to see some significant changes to the long-term forecast, including for debt service ratios. We may be seeing the leading edge of a forecasting shockwave that will affect many different areas of transportation planning.
Thom
Yikes, if that forecast holds true then gas tax should fall off a cliff, declining VMT and increasing MPG is a double whammy. What is WSDOT’s gas tax revenue forecast saying? Back of the envelope, at 50 billion VMT, 30 MPG, 37 cents = $600million. And what does that do to debt affordability?
Jeremy
Some might call it a carbon coffin corner as the market veers between low oil prices that mostly put the tight shale operators deep into red (even the oil majors have already been speaking of an “age of austerity”) and the higher prices that the oil companies need to break even, but those high prices do pose consumer affordability problems—nothing the Hirsch report or James E. Akins did not warn about some years or decades ago. Akins did hopefully predict that by year 2000 “conservation and alternatives” would put an end to oil use—oh, well. Granted, those tight shale operators are one of the few bright spots (flaring pun included!) in an otherwise flat or declining supply of conventional oil, though their hardly conventional oil is quite expensive, and does require massive drilling efforts to keep abreast the rather high decline rate on new wells.
Oh, the roads? Well, they’re made from, and with, oil.
Ann Dasch
Just when I thought WSDOT had learned their lesson and would keep making traffic projections with some acknowledgement of recent trends, they predict significant steady traffic growth on the Tacoma Narrows Bridge in their Toll Setting documents. See graph p. 17 of http://wstc.wa.gov/Meetings/AgendasMinutes/agendas/2015/February18/documents/2015_0219_BP11_TNBRateSetting.pdf