Transportation budget: good news*

Compared to the drastic cuts expected in the operating budget, the separate state transportation budget looks great. But in these times of budget challenges, “great” is a relative term, as you'll see below.

While the operating budget dominated media headlines yesterday, the governor also released her proposed 2011-13 transportation and capital budgets at the same time. The good news is that her $5.4 billion in proposed transportation construction spending will create or sustain about 22,000 jobs for an industry that’s been particularly hard hit by the economic downturn. Funding will continue to support major regional projects such as the bored tunnel in downtown Seattle, the SR 520 bridge replacement, I-5 HOV lanes in Tacoma, the North Spokane Corridor and many more.

One especially bright spot is the investment in rail projects. In January, Washington received nearly $600 million from the feds for use on high-speed rail along the I-5 corridor, followed by $31 million in October and $161 million just last week. (More info on rail projects here.)

*But here comes the not-so-good news. Revenue forecasters have adopted a new economic model that should more accurately predict fuel consumption trends, and the first use of this model shows $642 million less in revenue over the next 10 years than previously predicted. The ferry system expects to see significant shortfalls soon, which led to the governor recommending service reductions and delayed boat-building. Additionally, many of the projects made possible by the 2003 and 2005 fuel-tax increases are finished or nearing completion, meaning that construction activity will turn down in the coming years unless a new package of projects (and funding) is approved.

The Legislature will use the governor’s budget and proposed project list as the basis for deliberations this session, before passing a final budget in the spring. Read more about the governor’s proposal here.