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.