Will the people of Seattle still be paying monorail tax in the year 2045?

State lawmakers are considering a bill to let the Seattle Monorail Project (SMP) sell bonds that last 40 years — or longer if permitted by the Internal Revenue Service, which bases its regulations on the life span of a project.

The proposal illustrates how challenging it may be to issue $1.6 billion in debt needed to build the 14-mile Green Line through the western side of the city.

The monorail depends on a car-tab tax that is collecting less cash than expected. Already, SMP has drawn $92 million in low-interest loans to help cover costs and buy station property.

Anne Levinson, the agency's deputy director, insists the project remains affordable.

By spreading the debt to 40 years or more, SMP could attract lower interest rates, she said. "The best practices in finance are, you try to match your debt to the useful life of your asset," she said.

Opponent Richard Borkowski said, "It's like paying $5 a month on your credit card when you've got a $50,000 bill," because interest will accumulate.

Levinson said there was no constraint previously on the term of the bonds, but the agency wanted to spell out the situation in law. "You don't want to spend money debating this in the future," she said.

When voters approved the line in 2002, the original plan envisioned 30-year bonds. A cash surplus might have paid off the Green Line in 23 to 27 years. But when the tax took effect, the agency found it had overestimated how many taxable cars were in the city.

Skeptics think the monorail will be chronically underfunded.

Its true financial picture remains unknown because the agency and a construction team are still negotiating the price and design in private.

Ben Porter, a Seattle analyst who reviews federally approved transit projects, said the monorail's ability to support $1.6 billion in debt is uncertain.

"The strongest test is going to be the market, not what authority the Legislature gives them," said Porter, who has advised the critics' group OnTrack.

SMP has explored several ways to stretch dollars — including "contractor financing" aid, such as having the suppliers issue their own debt.

The agency is also considering a pledge of the entire car-tab tax to pay off bond investors, leaving no cushion in case of operating subsidies. Most transit lines need a subsidy, but monorail leaders say they'll break even with help from advertising and "entrepreneurial" features, such as special tourist trains.

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