View full size

Oregon and Washington will enter 2013, the year construction is supposed to begin on the

with no firm plan on how to raise their $900 million share of the cost.

After seven years and $140 million worth of planning, engineering and politicking, the massive I-5 bridge and freeway expansion was humbled in the recently concluded session of the Washington Legislature, emerging with exactly zero dollars.

The continued uncertainty this late in the game stems in part from the sheer size and price of the CRC and a tepid economic recovery. But there are also more basic forces at work.

Americans are driving less, in such numbers that it is shaking the financial foundation of transportation departments from Oregon to Oklahoma. Less driving means less gas consumed means less gas tax revenue.

Both the Oregon and Washington departments of transportation also face years of significant debt payments after an unprecedented borrowing spree over the last decade. The departments now resemble a lot of Americans post-recession: Short on income, mired in debt and facing an expensive future.

Not the ideal position from which to extract another $900 million for a controversial freeway project.

"We've got a problem, a serious problem," said Paula Hammond, director of the

. "We didn't really get much out of this Legislature. But everyone recognizes the needs are not going away."

THE DEATH OF CRUISING



For decades cruisers were a downtown fixture. Thousands of rowdy youngsters, in the family beater or daddy's Beamer, converged on Southwest Broadway for a vast, mobile party. Around 2000, the scene just sort of petered out.

"That's all kind of in the past now," said Portland policeman Eric Schober, chuckling at the problem from a bygone age. "It seems like we've had a whole lifestyle change."

Indeed, after six decades of seemingly inexorable increases, traffic peaked nationally in 2004. The total vehicle miles has been flat or down each year since. In 2011, the average American drove 6 percent fewer miles than in 2004.

Peak traffic came earlier and the decline has been longer in Oregon. The 19.7 billion miles Oregonians drove in 2010 was a stunning 1.2 billion miles less than the peak in 2002.

In Portland, the average driver now travels 19.1 miles a day, 20 percent less than nationwide.

Commuters waging a daily battle through the area's many choke points may sneer at the notion of a significant reduction in driving. But the numbers are compelling.

With the economy slowly mending, Oregon officials hoped driving would rebound in 2011. Instead, it declined to 19.1 billion miles, the lowest level since 1996.

"We see the trend continuing," said Matt Garrett, director of ODOT.

The reasons are in large part financial. High gas prices and the recession have made driving less affordable. But the declines predate the recession and have continued after it.

David Levinson, a University of Minnesota professor who studies transportation issues, argues that the trend is long-term and is as much cultural as financial.

Teens, historically the most avid drivers, are waiting longer to get their licenses and are driving less, pushed by higher costs and also tougher rules for young drivers, stronger enforcement of drunk driving laws, even technology. Another theory: smart phones and the Internet have supplanted the car as a central platform of young people's social lives.

Cars themselves have also changed. Some don't burn a drop of gas or pay a penny in gas taxes. Others use less, due in part to tougher federal mileage standards. "It's official government policy to drive down gas tax revenue," Levinson said.

Garrett points out driving reductions haven't alleviated the chronic congestion on the existing I-5 bridges over the Columbia River. Population growth will make it even worse. Congestion has become an obstacle to freight haulers as well as a safety issue, which makes the CRC a necessity, he said.

one of the project's most persistent and convincing critics, disagrees.

"This project was designed for a future that we know will never come to pass," Cortright said. "The DOTs' world-view is stuck in a place where gas costs a buck a gallon, and people drive more and more every year. For better or worse, that's not the world we're living in any more."

As Cortright points out, tolling will likely lead to dramatic further reductions. The Glenn Jackson Bridge on I-205 will offer a tempting, untolled alternative.

The

on Lake Washington in Seattle has a similar alternative route in the I-90 bridge. Traffic on the 520 has dwindled 35 to 40 percent since the state began tolling late last year.

GAS TAXES DECLINE



As driving declines, so too does the financial firepower of the states' respective transportation departments.

Oregon's gas tax revenue generated $392.5 million in the 2001 fiscal year. By decade's end, the number was $393.6 million.

Only when Oregon instituted a 6 cent-per-gallon gas tax increase in 2011did the revenue grow, finishing the 2011 fiscal year at $412.3 million.

Washington's gas tax revenue has been more volatile, but only because it increased the tax twice during the decade. Thanks to the 14.5 cent-per-gallon increase, Washington's gas tax revenue jumped from more than $760 million in 2001 to $1.25 billion in 2011.

Oregon's gas tax is now a 30-cent per gallon tax. Washington charges 37.5 cents.

It will take more gas tax hikes to significantly grow that revenue as gasoline consumption declines in both states.

Oregonians burned 1.64 billion gallons of gas and diesel in 2011, the lowest since 2001. Diesel usage actually grew over most of the decade, which ODOT officials attribute to a strong commercial trucking sector. Gasoline consumption, meanwhile, nose-dived to 1.48 billion gallons in 2011, despite the halting economic recovery. Oregonians haven't used that little gas since 1994.

Washingtonians, meanwhile, burned 3.35 billion gallons in 2011, the lowest number since 2002.

Both states' departments have multiple sources of funds, including licensing and registration fees. But the gas tax remains the single largest revenue source. With that flat to down for the foreseeable future, it severely limits options.

"Revenue is going in the wrong direction but the costs just go up," ODOT's Garrett said.

Compounding the dilemma is their decision during the last decade to borrow billions of dollars to fund hundreds of key road and bridge improvements. But now it's time to pay the piper.

ODOT's total debt has soared from $58.3 million in 2001 to $2.2 billion a decade later. Correspondingly, the annual debt service has gone from $3.6 million to $148.6 million.

WSDOT's debt hit $5.7 billion by 2011. Its annual debt service tripled during the decade to $346.1 million by 2011. By 2015, it will be paying out $522.5 million annually to investors, 62.3 percent of its annual gas tax revenue.

"It's like those folks who built a really big house during the boom," said WSDOT's Hammond. "They are really loving the house, but now they've got to pay the mortgage."

MONKEY-WRENCH IN THE PLAN



More

According to the CRC's master plan, the first step into the breach on funding was to take place in January in Olympia.

The

would approve a small gas tax hike sufficient to generate the state's $450 million share of the $3.1 billion price tag. Then, as required by Washington law, the tax increase would have gone to voters in November.

The thumbs-up from the Legislature was vital. It would be the all-important signal of local buy-in hat the federal government required before it would open its own piggy bank.

Counting on anything from Washington, D.C. these days -- let alone more than $1 billion -- is risky given the level of financial and partisan chaos in the Capital. But if the CRC were to be a contender at the federal level, it needed to show that the locals had their act together.

But the CRC quickly got lost as Washington Legislators were met with a $1 billion budget gap and a fusillade of grave needs.

The Legislature debated a sales tax hike for education and a new fee on each barrel of oil for road maintenance.

The CRC gas tax was a political non-starter.

"We were talking about going to the ballot for things like education and human services," said Washington Rep. Judy Clibborn, D-Mercer Island. "The possibility of getting a gas tax on top of that seemed miniscule."

After the session's end in March, the CRC tried hard to look for a bright side, pointing out that lawmakers had passed a bill authorizing tolling. But in terms of actual funding, it got zilch.

Now the onus shifts to Oregon.

Garrett and Patricia McCaig, Gov. Kitzhaber's liaison to the CRC, are meeting with Oregon's legislative leaders to hammer out a proposal that will be unveiled in Salem at the opening of the 2013 session in January.

Possibilities include a small -- 1 to 1.5 cent per gallon -- gas tax hikes and increased registration and title fees. The CRC needs Oregon to come up with $35 million in new revenue. The state could then leverage that money with yet another bond sale and raise Oregon's share of $450 million.

Winning a new tax in this economic and political climate promises to be "a heavy lift," as the CRC's political strategists like to say.

But some key voices in the Legislature are supportive.

"There are a lot of reasons it's a good time," said Rep. Tobias Read, D-Beaverton, vice chair of the House Transportation and Economic Development Committee. "It would be good for the economy, interest rates are low and it would help us maintain our place in line (for federal money.)"

On the other hand, the CRC must show lawmakers it is on top of its game. It can't afford another embarrassing gaffe like the surprise in March that the U.S. Coast Guard may not sign off on the current 95-foot bridge design because it would impede certain upstream users of the shipping channel.

"I will confess that the Coast Guard's reaction did not make me happy," Read said.