Friday, June 15, 2012

520 tolls: reasons behind rate increases

SR 520 toll rates are increasing 2.5 percent Sunday, July 1.
We’re hearing one of two reactions to this news:
  • Why are you raising SR 520 toll rates when traffic has dropped off?
  • Why not lower the toll rates? Won’t that generate more revenue?

So here are some answers to your burning questions.

We’re on track! SR 520 bridge traffic is actually higher than forecast
It’s true that traffic has dropped on SR 520 floating bridge since tolling started –we expected that to happen. In fact, we were prepared to see SR 520 traffic to decrease by nearly 50 percent after tolls started. But the drop hasn’t been that big.  Between January and March -traffic was 57 percent of pre-toll levels, a 43 percent drop. SR 520 had even more drivers in March – traffic was 62 percent of pre-toll levels, a 38 percent drop. We’re also seeing revenue six percent higher than our original forecast.

Why not lower rates?
We sold $550 million in bonds last fall and that funding is already paying for SR 520 construction. Tolling will raise more than $1 billion to help replace the vulnerable SR 520 floating bridge. So we are carefully following our financial plan and this rate increase is part of that.  The financial plan also includes four more annual increases of 2.5 percent through 2015 but the transportation commission will be reviewing traffic and revenue data each year to determine if the planned increases are necessary and the amount.

Traffic on SR 520 is free flow for the first time in decades and we’re on track with revenue. Still, many drivers suggest that lowering toll rates will bring in more revenue. It might seem counterintuitive, but a lower toll rate doesn't necessarily mean more revenue. Instead, it could mean congestion. For example, if the toll rate was reduced by 50 percent, twice as many vehicles would need to pay a toll to make the same amount of revenue. That means traffic volumes would need to be higher than before tolling started!

Curious about how SR 520 tolls are doing? Read SR 520’s toll first financial statement. We’ll continue to post future financial statements online too – just like we do for the Tacoma Narrows Bridge and SR 167 HOT Lanes.

6 comments:

Anonymous said...

"seeing revenue six percent higher than our original forecast" does not mean it can't be better.

We are now having one horribly congested bridge, I-90, and one that is under utilized, SR-520.

Why not lower the rates to ensure that, it does become more affordable and thereby more drivers, it relieves traffic across I-90, but (maybe most important) brings in more revenue - as the crossing is far from financed.

Look at the DFW area in Texas. Tolls range from $.25 and up, and no one thinks a minute of it, thereby slowly paying for the newly built infrastructure. But they'd be up in arms (this is Texas after all) if the toll rates were at the same level we see up here.

The Geezer said...

We don't lower tolls because of the faustian deal we cut with the bondholders.

Not about what makes sense, only to make those who ALREADY paid for this bridge pay for the new one in advance.

Grrrrrr.

The Geezer

ANDREW said...

I feel the same as the first person we have a bridge wide open (520) and I-90 is a parking lot everyday. i think tolls needs to be reduced. Other states have been doing just fine with tolls under a dollar. I drive the Chicago tolls often and pay .35-.50 cents 3x. works for me! WSDOT needs to change something for traffic, toll BOTH BRIDGES...dollar each bridge each way!

WSDOT said...

@Anonymous and Andrew: There is a balance between managing traffic and generating revenue to replace the bridge and the Transportation Commission (who sets the toll rates) must carefully consider any changes to the rates. A lower toll rate doesn’t necessarily mean more revenue but it could mean an increase in traffic and congestion. For example, if we lowered tolls by 50 percent we’d need twice as many people crossing the bridge to make the same amount of revenue.

In I-90 we’ve been keeping an eye on it. We’ve seen about an 10 percent increase in traffic on the I-90 bridge since tolling started and travel times are about 2-3 minutes longer on average during the peak periods.

Susan said...

"In I-90 we’ve been keeping an eye on it. We’ve seen about an 10 percent increase in traffic on the I-90 bridge since tolling started and travel times are about 2-3 minutes longer on average during the peak periods."
Are you kidding me?? I can no longer take 520W to Bellevue for most of the day because of the backup on 520W to get to 405S. If only it were 2-3 minutes. Perhaps you should be monitoring the delay in merging on 405S from 520W as well. Cars are merging at the last possible second, which is causing 520W to back up and causes delays in trying to get past the 405 interchange. In fact, it is downright dangerous. Why don't you block off the two left-most lanes of 520W for through traffic and figure out how to improve the 502W to 405S interchange.

Anonymous said...

I don't understand why tolling doesn't run the entire length of the 520 on the eastside. Successful electronic highway tolls based on distance are in use in places such as Toronto and most of Spain.

The current design leaves the distinct impression that bridge-crossers are financing the bonds for the entire 520 project.

Eastsiders who travel on the awesome new 520 between Avondale and Medina surely must bear some of this burden - but now get a free ride.

Let's toll all entrances and exits of the 520 and charge a sliding scale based on distance.