Tunnel extras: $1.4B needed

While building a tunnel to replace the Alaskan Way Viaduct would remove noise and blight from the Seattle waterfront, the project might elicit a roar from King County taxpayers.

Politicians are suggesting as much as $1.4 billion in new local taxes, fees and grant requests to pay for all the desired buses, streetcars, a sea wall, road work, utility relocations and parks associated with the tunnel.

Although a toll hasn't been proposed for the tunnel, it remains a possibility.

The money could be collected without a public vote.

House Speaker Frank Chopp, D-Seattle, already has questioned whether so many new taxes are a good idea. This after voters last fall approved doubling the Sound Transit sales tax, backed Seattle measures for Pike Place Market and parks, and in 2006 approved a Metro Transit sales-tax hike plus a Seattle property tax for transportation.

The new $4.2 billion tunnel proposal includes $2.8 billion for the tunnel and other highway sections through Sodo, and the remaining $1.4 billion from local government.

Although it's clear how the state will pay its share — from gas taxes and federal bridge funds that are already in the Legislature's transportation budget — local funding is unclear.

It's also hard to pin down the cost, as the 54-foot-wide tunnel, perhaps the widest of its kind in the world, is only 1 percent engineered.

Since the tunnel would last a century, backers argue the investment is worthwhile.

"We're going to love what it offers us," said Gov. Chris Gregoire, who announced Tuesday that she has chosen a 2-mile tunnel to replace the 50-year-old Alaskan Way Viaduct by 2015.

The agreement — between the governor, Seattle, King County and Port of Seattle — took seven years of studies, debate, phone calls, forums, advisory votes and waffling.

Local officials are likely to face controversy as they look for ways to raise money.

• To pay for more transit, the Metropolitan King County Council will consider a 1 percent motor-vehicle excise tax, or $100 yearly on a $10,000 car. Charged as one lump sum, the car tax is a sizable hit that drivers often resent. Details, such as when the taxes might start and end, are not yet proposed.

Executive Ron Sims said transit service could grow up to 25 percent countywide. He said bus ridership has been growing faster in the Seattle area than other cities.

To some extent, this is a bailout for Metro, which is collecting less sales tax than officials predicted.

Tim Eyman, sponsor of many anti-tax initiatives, said the proposal shows why the state should should cap taxes. Several years ago, his winning Initiative 695 called for a $30 car-tab limit. (The actual car-tab amount is higher, because of new statewide car fees based on weight, as well as voter-approved Sound Transit car tax.)

"Politicians are showing zero respect for the voters and no fiscal restraint regarding the proposed Big Dig Tunnel," he said in a statement this morning.

• Seattle Mayor Greg Nickels proposed $930 million for the city's share. He indicated Tuesday the city won't seek tax and fee increases immediately. "The economy is very bad right now," he said.

Nickels wants a $135 million First Avenue streetcar. It would loop from the Chinatown International District to either Westlake Center or Seattle Center. The city would be seeking around $500 million in all from the general public, excluding grants and a tax on property near the waterfront.

"It's real money," Nickels said, "but if you look at what this does, it transitions our transportation system for the near future. So it's great value for the money."

City Councilmember Nick Licata called it a "stretch" to collect $500 million, especially in utility rates that already are rising. "There are a lot of nice-looking, expensive projects the mayor's tacking onto this package, that the public is paying for, but there's no proven need to have them," Licata said. A Mercer Street overhaul and streetcar are not really needed, he said.

Magnolia resident Elizabeth Campbell filed an initiative Tuesday to stop the tunnel. If she collects 17,968 signatures in 180 days, that would force a citywide ballot measure.

• Port of Seattle CEO Tay Yoshitani, chief executive officer, said he will look for funding sources and ask the commission to contribute. Tuesday's deal assumes $300 million from the Port for an interchange in Sodo, benefiting waterfront freight traffic.

• The state's pledge of $2.8 billion could make commuting across Lake Washington more expensive, by reducing the money on hand for a new Highway 520 bridge.

The Legislature last year shifted $400 million from the Alaskan Way project to the Highway 520 floating bridge. The new tunnel plan could involve moving $400 million to the tunnel, or tolls could be collected electronically at the tunnel, said Ron Judd, senior adviser to the governor.

"There could be a couple different ways in which the $400 million gap is filled. Tolling will be on the table," he said. "The mechanics of where the $400 million comes from will be worked out between the governor and the Legislature."

If bridge funds are drawn down, more tolling could be needed on the 520 and perhaps nearby Interstate 90, to close a funding gap that already exceeds $2 billion.

Sen. Mary Margaret Haugen, D-Camano Island and chair of the Senate Transportation Committee, thinks this problem should be solved by a toll on the tunnel. Gregoire previously opposed tolling that corridor, saying drivers would detour; and tolling was not in Tuesday's proposal.

"The governor is saying one thing, and the Legislature is saying another," Haugen said this morning. "In order to come up with the other $400 million, tolling will have to be a part of it."

Seattle's own "Big Dig?"

Speaker Chopp, never a tunnel supporter, in a statement Tuesday compared the tunnel to Boston's "Big Dig," and said, "there is a real possibility for cost overruns." Will city and county taxpayers be on the hook for those, he wondered. Chopp, regarded as powerful enough to block state spending packages, said local taxes would be far more than $1 billion even if the project stays on budget.

Judd said the state will cover cost overruns on its share of the project — the tunnel or the teardown of the viaduct.

Gregoire disputes a comparison to the "Big Dig," where costs exceeded $14 billion.

"You should go see it. I've been there," she said. "They tried to move the world to build a tunnel and a tube — we're trying to keep the world in place, to build a tube. It couldn't be more different." Also, some officials in Boston obscured, or missed, several issues that drove costs up.

In Seattle, costs might be more predictable. A deep tunnel would go through stronger soil, compared to previously proposed cut-and-cover tunnels along Alaskan Way, where Elliott Bay would try to seep in.

New state figures assert that costs for just the bored-tunnel construction have actually fallen, from $2.1 billion four weeks ago to $1.9 billion today.

Project director John White of the state Department of Transportation (DOT) noted that some road work at the mouths of the tunnel is being shifted to the city and that safety upgrades to the Battery Street Tunnel are being reduced, because the new tunnel would handle through traffic.

In addition, DOT reduced some financial cushions. Administration budgets are lower, contingency and risk slashed by $135 million, and the inflation forecast from consultant Global Insight is down, from 3 percent a year to 2 percent, White said.

Such juggling recalls an early problem at Sound Transit, where executives prematurely whittled away contingency funds in response to mounting costs, in the late 1990s.

White says he is confident in this week's early numbers. At the tunnel portal in Sodo, the state already has good knowledge of the soils, based on engineering for an interchange there, he said.

DOT has learned about materials costs because it's been exploring other waterfront-highway options. The DOT "owner's representative," consulting firm Hatch Mott MacDonald, has expertise worldwide, and in taming the soggy soils of Beacon Hill for Sound Transit locally.

"We think we have access to the best of the best," White said of the various experts the state has hired.

Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com. Andrew Garber also contributed to this story.