Transportation chief details cuts, layoffs

OLYMPIA — State Transportation Secretary Doug MacDonald yesterday laid out dramatic cuts in spending that lay ahead for his agency as the result of Referendum 51's defeat.

"It hasn't been a good week at the Department of Transportation," MacDonald told the state Transportation Commission, which oversees the DOT, yesterday.

Referendum 51 would have pumped $7.8 billion into transportation projects across the state. Its failure means layoffs at the DOT, budget cuts and a focus on preserving existing roads.

The DOT expects a capital budget of about $4.8 billion total during the next decade. About 60 percent of that money would go to preserving highways, such as repaving roads, and 19 percent would go to the ferry system. That leaves around $1 billion, or roughly $100 million annually, for new transportation projects.

By comparison, the agency spent about $5 billion in the past decade, not adjusted for inflation, on highway additions and improvements.

MacDonald said the numbers should dispel arguments that the DOT could still build new roads if it just spent its money differently. In reality, the bulk of the agency's budget goes to keeping the existing system running, he said.

Even the projected budget isn't guaranteed, he said. About 64 percent of it comes from federal funding.

"That may be a highly risky assumption," MacDonald said, noting the federal government may cut expenditures in the future.

If no new funding comes through, up to 610 people could be laid off by June 2005.

Aubrey Davis, chairman of the Transportation Commission, said the private sector will get hit even harder as new road construction winds down. "Our contractors are going to have fairly substantial layoffs," he said.

In addition to laying out budget cuts, MacDonald floated some options about raising money for transportation in the future.

For example, he discussed ideas such as a gas-tax increase indexed so the tax would keep pace with construction inflation.

MacDonald stressed his agency isn't making any proposal at this point. It just wants to provide a framework for the transportation debate, which has dragged on for years.

The Transportation Commission yesterday gave the secretary permission to begin public discussion.

He wants to present the Legislature a menu of options to consider when it convenes in January. It's not clear what, if anything, lawmakers will do next year.

Referendum 51 was put on the 2002 ballot by the Legislature earlier this year after Gov. Gary Locke could not get enough legislators' support to increase taxes for transportation.

The measure would have raised gasoline taxes to 32 cents a gallon from 23 cents a gallon. It also included a 30 percent increase in truck-weight fees and an additional 1 percent sales tax on new and used vehicles.

One reason the DOT has so little money to spend in the coming years is that the agency has spent beyond its means for the past three years, with legislative approval, and has run up its debt.

When the Legislature slashed the state motor-vehicle-excise tax after voters approved Initiative 695 in 1999, the department lost a big chunk of its revenue.

But the DOT continued to build projects with borrowed money, based on expectations the Legislature would fill the hole in the budget.

With the defeat of Referendum 51, the agency can't afford to keep borrowing money at the same pace. During the next two years, it plans to cut borrowing to less than half the 2001-2003 level.

Andrew Garber: 360-943-9882 or agarber@seattletimes.com.