Oregon drivers take note: The planned replacement of the Tappan Zee Bridge 25 miles north of New York City offers some insightful information for followers of the Columbia River Crossing project.
Like the CRC, the Tappan Zee project, which spans the Hudson River between Westchester and Rockland counties, depends on low-interest federal loans and tolling revenues as central parts of its finance plan.
But the Associated Press reported over the weekend that the federal loans will be a far smaller portion of the project than sponsors had budgeted for—one-third of the $3.9 billion price-tag instead of a half.
"Gov. Andrew Cuomo's ambitious plan to replace the aging Tappan Zee Bridge has quietly hit financial uncertainties that could shift more of the $3.9 billion cost to motorists and taxpayers statewide, with the possibility of far higher tolls than the $14 originally predicted, according to documents and interviews. That's because the state stands to receive a federal loan for much less than Cuomo originally sought," the AP reported Sept. 29.
He asked a year ago for a loan that would cover 49 percent of the project, but the federal government told the state this past week that the biggest loan it would get would be 33 percent. At the same time, the state Thruway Authority's credit outlook, which can affect borrowing costs, recently received a "negative," in part because of its $3.7 billion debt and its refusal to reveal a plan for toll hikes. All of that mean the state will have to finance more of the project with traditional loans at higher rates than the low-interest money offered by the government. And other sources — such as bridge tolls, statewide Thruway tolls and state money — could be tapped to cover those higher borrowing costs."
Currently, the slimmed-down, $2.8 million, Oregon-only version of the CRC anticipates a federal grant of $850 million to pay for light-rail and a low interest federal loan of $900 million. Critics of the CRC, including U.S. Rep. Jaime Herrera Beutler (R-Wash.), who represents Clark County, have questioned whether those funds are actually available.
If the project moves forward and the federal government provides substantially less support as it appears to be doing in New York, there are two options to make up the difference.
The first is tolling revenue.
CRC sponsors have consistently provided overly optimistic tolling projections and as recently as last week, Portland economist Joe Cortright unearthed new information about how inaccurate CRC numbers are.
That would place more pressure on the second source of funding, state borrowing. State Treasurer Ted Wheeler, who must approve the CRC finance plan before the project can move forward, has produced new analysis showing that a shortfall in federal funding could push the project into the red, because the state's borrowing costs are higher than the federal government's borrowing costs.
Oregon's authorization to fund the CRC expired yesterday. Lawmakers are in special session right now, but a spokesman for House Speaker Tina Kotek (D-Portland) says there are no plans to revive the project in this session.