Tim Eyman's Initiative 1125 would break apart the state's vision of using tolls to help build highways, according to analysis by the state Office of Financial Management (OFM).

Threatened projects include a new six-lane Highway 520 floating bridge, the planned Highway 99 tunnel, a proposed Interstate 5 Columbia River bridge crossing into Portland and future widening of Interstate 405 to add high-occupancy or toll (HOT) lanes.

What these have in common, the OFM says, is that Washington state would be unable to sell toll-backed bonds if tolls are required to be set by the Legislature, as demanded by I-1125. State lawmakers have approved initial toll rates, peaking at $3.50 one-way, for the old 520 bridge. But the state Department of Transportation (DOT) and its contractors have failed to get the system running yet, and toll-backed bonds have yet to be sold.

The OFM review, released Wednesday, goes even further, speculating that if the initiative passes, governments here might have to give back half, or even all, of $123 million in federal grants for the state 520 program, related Metro bus service and King County passenger ferries. That money was contingent on the DOT using experimental "congestion pricing" on 520, to reduce traffic jams by charging higher tolls at peak times. I-1125 would forbid this, and require a flat toll.

Earlier analysis, by the Parsons Brinckerhoff consulting firm, predicted an 11 percent drop in highway revenue if DOT used flat-rate tolls.

A more general problem is that bond investors prefer independent boards to set tolls, as is done in other states, OFM says. Therefore, "bonds secured only by toll revenue would be eliminated as a financing tool for the bridge," the report says, based on advice by state Treasurer Jim McIntire. Gas-tax revenue or other money would be needed, reducing the ability to fund other highway projects, OFM says.

Eyman noted that the report calls several of the bottom-line effects indeterminate. I-1125 is meant simply to prevent what he calls "anything-goes tolls," he said. One provision affirms current state law, that I-90 cannot be tolled to pay for a new 520 bridge.

About $1.1 billion of the $4.65 billion Highway 520 crossing is to come from bonds repaid by tolls. About $500 million of those are "toll-only" bonds, a state report says, that wouldn't include gas tax as a backup source, or the state's full credit as a last resort.

"What Treasurer McIntire is saying is you're eliminating a major source of funding for the 520 bridge. There is no market for toll-backed bonds in which a political body sets the rates," said treasurer's spokesman Chris McGann.

Eyman says elected legislators should set tolls because it makes them accountable to the public, instead of blaming toll costs on unelected bureaucrats.

"We firmly believe, in these tough economic times, that struggling families are extra hesitant to pay anything extra when it comes to tolls," he said. "But they might be willing to accept them if there's some transparency or accountability in the process."

The Tacoma Narrows Bridge, where bonds backed by a flat-rate toll were sold already, is unaffected.

Costs just to study flat tolls could reach $8.3 million, the report says. However, for Highway 99 the state needs further studies anyway, to reduce the risk of drivers diverting to other roads if tolls are too high.

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