Tax forecast to be lowered, monorail director says

The new interim director of the Seattle Monorail Project says the agency should reduce its controversial forecast of how much tax it will collect in future years.

Even using SMP's own numbers, there's only a 50-50 chance that car-tab taxes for the monorail will grow as fast as the agency was counting on.

The latest finance strategy, announced last week by adviser Kevin Phelps, relies on an annual growth rate averaging 6.1 percent, fueled by rising population and a taste for fancier cars.

But that figure is only the midpoint in a range of possibilities. If the economy droops, the tax would last much longer. If it purrs, the tax would be paid off earlier.

"There are even odds of being under, and even odds of being over," explained Randy Pozdena of Portland-based ECONorthwest, which has researched the tax for SMP since 2003.

That means nobody can guarantee the advertised $4 billion in interest savings that Phelps says he found to slim a former 50-year, $11 billion finance plan down to 42 years.

John Haley, the monorail's interim executive director, said last night he'll come up with a slightly lower growth rate to be prudent. "I believe it should go under 6, but I'd appreciate the chance to work on it a few more days," he told board members last night.

Project skeptics, and Deputy Mayor Tim Ceis, are seeking a more cautious number — around the 4.4 percent forecast by local economist Dick Conway, who does the car-tax forecasting for Sound Transit.

The SMP's numbers include an annual gain of 5 percent in car prices, based on historically strong growth and an affluent population. "If you look at places like San Francisco, people are running around with Beamers and Jaguars all over the place," Pozdena said.

Advisers have assured the monorail board that even if the 6.1 percent goal were missed, the bonds would still be paid. .

The tax would simply continue as long as needed to cover the payments.

Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com