STATE OF WASHINGTON

OFFICE OF FINANCIAL MANAGEMENT

Insurance Building, PO Box 43113  Olympia, Washington 98504-3113  (360) 902-0555

pril 7, 2023

: Honorable Marko Liias

Honorable Curtis King

Senate Transportation Committee

Honorable Jake Fey

Honorable Andrew Barkis

House Transportation Committee

ROM: David Schumacher

Director

UBJECT: OFM CONCERNS WITH HOUSE AND SENATE TRANSPORTATION BUDGETS

We have significant concerns with the House and Senate transportation budgets that we believe need to be

addressed in your final compromise budget.

The House and Senate transportation budgets appear to fund many projects throughout the state. In reality,

however, many of the projects are only partly funded or are aspirational. The capital project lists look robust,

but the practical constraints of delivering the projects and the unrealistic financial plan is a set-up for failure and

disappointment.

When we met in December, we agreed that a $7 billion capital plan was too large. The Governor’s budget

reprioritized projects due to declining revenues, increasing costs and constraints on contractor capacity. It also

set expectations more in line with realistic construction delivery timelines. We need the Legislature to similarly

lay out priorities given these financial and delivery constraints.

The legislative budgets not only ignore the reality of project delivery, but they also fall short of addressing the

significant maintenance and preservation needs throughout our state and the ongoing need to keep drivers safe

with adequate patrolling. Both budgets diminish the ability of the Washington State Patrol to enforce roadway

safety and respond to accidents that close roadways. The budgets also reduce Department of Licensing staff

who provide services such as renewal of driver’s licenses and other essential needs, which will hinder the

department’s ability to minimize wait times.

Capital project completion

The House and Senate transportation capital budget construction timelines and financial plans are not feasible.

Both budgets appropriate amounts in the 2023-25 biennium that are not sustainable over the timeline of project

construction. Historically, the Department of Transportation can deliver an average of a little over $3 billion each

biennium. Both budgets assume over $7 billion will be constructed during the biennium. An ambitious amount,

$5.7 billion, was appropriated in the Governor’s capital plan. Even this exceeds the amount that the department

has been able to deliver in the past. Project delivery is dependent upon several factors including the ability to

recruit and hire a skilled workforce, contractors, and consultants, and to purchase equipment and supplies in a

timely manner. Without prioritizing the capital list, the over-appropriation leads to unrealistic expectations for

communities and would require the department to prioritize projects without legislative direction.

On the financial side, neither budgets balance in future biennia, which jeopardizes the ability of the state to

continue partially completed projects without requiring new sources of funds as soon as next biennium. As

Agenda Item No. 11a_Attach_1

Meeting Date: May 23, 2023

stated above, SB 5763 would make the Senate financial plan feasible but does not address the department’s

ability to complete the legislative expectations for delivery.

Public safety and other services

The State Patrol reductions would reduce the number of troopers patrolling our roads by reducing overtime.

Because of the existing shortage of troopers, the State Patrol relies on vacancy savings to pay overtime to ensure

a sufficient number of troopers are policing the state roadways.

Despite the budgets’ support of a program to entice lateral recruitments (law enforcement transferring from local

law enforcement to the State Patrol) by paying for compressed training for those with experience, they do not

include the full funding needed for actual salaries and benefits for those who may want to join the State Patrol.

The budgets also cut other State Patrol positions that support crime scene detectives, overtime for communication

officers for proper 911 center staffing levels, and others that are critical to the State Patrol’s day-to-day operations.

These reductions also remove State Patrol funding to handle emergent situations, such as official visits, natural

disasters, or critical infrastructure failures. These cuts will impact the agency’s ability to carry out its mission and

protect the residents of Washington.

The licensing services reduction at the Department of Licensing will likely result in layoffs, part-time office

closures or reduced hours, and fewer driving skills tests that DOL can offer in multiple locations. The real-life

impact will be longer wait times for services. In the second year of the biennium, the reduction will impact the

agency’s ability to fully implement REAL ID enforcement.

The Senate budget’s staff reductions at the Department of Transportation will impact the department’s ability to

deliver the legislatively directed projects and programs in the budget.

Another major concern is that budget language poses legal risks by suggesting that agencies should hire staff

beyond their appropriation authority. The law prohibits agencies from spending more than their authorized

appropriation levels; therefore, agencies will not be able to achieve authorized staffing levels because of the

vacancy cuts.

Maintaining and preserving the transportation system

House and Senate funding to preserve and maintain roadways is significantly lower than the Governor’s budget.

The funding level for these purposes is also lower than the expectation set forth in the 2022 supplemental budget

finance plan. Underfunding preservation and maintenance is inconsistent with the stated priority of the 2022

Move Ahead Washington 16-year transportation package. As you know, preservation was a cornerstone of the

package.

Preservation is essential to prevent deterioration of the transportation system and decrease the future expense of

deferred repairs. Postponing the work also poses safety hazards for travelers. The limited amount of preservation

funding in both budgets would require the department to stop all advertisements for preservation work. This

reduction in preservation is more significant in the House budget. This means new preservation will not start and

will result in the deterioration of the multimodal system, indefinite deferral of the Complete Streets program

(improving safety, mobility and accessibility of state highways), re-evaluation of speed limits and weight limits

on bridges, and possible road, lane or bridge closures.

Additionally, the significant reduction in maintenance funding in the legislative budgets – and the House budget

in particular – would impact the agency’s ability to keep mountain passes open during winter storms, repair

damages to highways, clean up litter and graffiti, and other critical activities needed to keep our roads and

bridges open and travelers safe.

To advance cleanup of homeless encampments on public rights of way, the House and Senate appropriate an

additional $10.4 million. Although this is appreciated, other budget reductions within the maintenance program

are so deep that the rights of way cleanup would also be reduced by cutting into the base budget.

Ferries

Vessel construction and electrification

The ferry system is a vital part of Washington’s transportation system that carries people to and from work and

contributes to the state’s tourism. Ensuring there are operational vessels and transforming those ferries to

reduce greenhouse gas emissions is crucial to meeting the needs of the state.

The House and Senate budgets underfund the construction of five hybrid-electric ferry vessels. The first hybrid

electric vessel would be underfunded by $31 million. Both budgets link the first vessel construction funding to

the ferry procurement bill (HB 1846). If the bill does not pass, ferry construction would be further delayed

because the 2021-23 appropriation will have lapsed, and no funding would remain in the 2023-25 budget.

Able Body to Mate program

The Able Body (AB) to Mate program is key in helping ferry workers advance in their careers and in filling

positions required to operate ferries. The Ferries Division must fill 107 licensed positions by 2027, and fully

funding the AB to Mate program at $12 million will help address that gap by training 96 crew members. The

House and Senate budgets fund the AB to Mate program at $8 million, which will only train 48 crew members.

Vehicle miles traveled

The 2021 State Energy Strategy identified vehicle miles traveled (VMT) reductions as a key strategy to reduce

greenhouse gas emissions. Funding is needed to partner with local jurisdictions, regional transportation planning

organizations, and other stakeholders to develop and implement VMT reductions. The House does not fully fund

these efforts.

Tolling

The Senate budget directs the Department of Transportation to deploy new advanced technologies to collect

tolls on the westbound State Route 520 on-ramp at 84

Avenue NE. Several of the provisos would establish a

new tolling system that is separate from the existing GoodToGo! program, do not fund the new system, and set

required timelines that are not achievable. There is also a legal concern that this could be considered substantive

law in a budget bill. Despite being labelled a pilot program, tolling systems are longer term mechanisms that

will last far beyond the two-year budget cycle. In the past, they have always been established in a separate

policy bill. In addition, the provisos set specific rates in contradiction to existing law that establishes the

Transportation Commission as the sole rate-setting authority for the state.

Local Partner Cooperative Agreement

The House budget includes three separate items aimed at addressing projects that are at risk of delay due to over

appropriations.

• The Joint Transportation Committee is directed to convene a WSDOT local partnership workgroup to

create a procedure for the department to partner with local jurisdictions to perform preservation and

maintenance and construction projects on state highways.

• WSDOT is directed to transfer three state projects to local jurisdictions.

• WSDOT is directed to produce a list of projects to transfer from the state to local jurisdictions.

Before transferring the three state projects to local jurisdictions or providing the list, the Joint Transportation

Committee study to ensure policies and procedures necessary for the successful transfer should be completed.

In addition to the information provided in this memorandum, OFM budget staff will provide specific technical

and other concerns.

cc: Kelly Simpson, Staff Coordinator, Senate Transportation Committee

Mark Matteson, Staff Coordinator, House Transportation Committee

Nona Snell, Budget Director, Office of Financial Management

Erik Hansen, Senior Budget Advisor, Office of Financial Management

Debbie Driver, Senior Policy Advisor, Executive Policy Office