UPDATED: Analysis of “Anatomy of An I-405 Toll: Where Your Money Goes”

[This article has been republished with corrections and additional critical details and supporting evidence]

New article by KUOW reporter Joshua McNichols titled
“Anatomy Of An I-405 Toll: Where Your Money Goes”
was published earlier today.  It starts to describe some of the story behind what you get for your money when you pay the toll. It does a fine job introducing us to some of the people behind the toll system.  But there are some critical facts that the article does not cover with regard to where your toll money goes:

  • Who is the company in New Jersey that is getting part of the toll?
  • What do they do with the $0.20 per toll that they receive?
  • Who is the company in Texas?
  • What do they do with the $0.55 per toll that they receive?
  • What is the cost breakdown of the tolling system?
    • tolling hardware maintenance
    • capital outlay / loan payoff
    • software systems
    • billing costs
    • customer support center costs (120 CS representatives)
  • What other costs are paid by WSDOT to support the tolling that are taken out of the tolls?
  • What other costs are paid by WSDOT to support the tolling that are NOT paid for out of the toll revenue?
    • Human Resources
    • WSDOT personnel
  • What costs outside of WSDOT are spent to support the toll, like WSP providing toll enforcement?
  • How much money actually went into the fund for improvements to the I-405 corridor for this first operating quarter of the toll?
  • What specific improvements are planned for these funds?

The people are looking for some real facts so they can better understand where their toll money is going.

In addition, there are a few other facts that it does not explain in enough detail which we would like to clarify for the public:

Toward the end of the article, it states “State numbers suggest the toll lanes have made traffic worse in some spots, such as north of Bothell…But the numbers do show faster commutes, even in the general-purpose lanes, along most of 405.”

The fact is that the segment of I-405 where things are slower is 9.2 miles of the 17 miles being tolled.  So for WSDOT to state “the numbers do show faster commutes..along most of 405” is absolutely wrong.  Add to that, the fact that there are other places in the section south of 160th St to Bellevue where traffic slowed and overall, times are much worse for commuters.

Next, beware of the real significance of those reported improvements.  They are claiming improvements in the order of just 1 to 3 minutes, based on the published raw data. Is that significant?

Finally, be careful in drawing conclusions about the reasons for any perceived improvements.  We should see some improvements since a lane was added in some segments and removed pinch points that cause slowdowns so that there are now 5 uninterrupted lanes from SR520 to 160th St.  But this was done at the sacrifice of taking the fourth General Purpose Lane (GPL) away where there was one which created slower spots too.  The slow spots correspond with where the fourth GPL was taken away.  The traffic is also flowing faster in places because the bottlenecks created upstream allow a smoother flow in the same way the metered ramps work.  For example where SR520 merges with northbound I-405.  This has become one big metered ramp.  The rightmost GPL from where SR520 merges with I-405 up to 70th St was removed, so now the SR520 ramp regularly backs up on the flyover as early as 2:30pm weekdays and even on weekends when it never happened before.

The second source of perceived improved drive times is that many drivers have adjusted their routes to bypass parts of I-405 or the times that they drive on I-405.  Many people have commented online and in the petition that they now avoid 405 altogether, taking surface streets or simply not going to destinations that require driving it.  That will be reflected in overall reduction in volume of traffic during peak hours.  The reality is that the same improvements in congestion would be realized even without any toll at all.

The article states “The extra money goes to more improvements in the I-405 corridor.”  But WSDOT has repeatedly stated that the purpose of the toll is for “Congestion Management”, NOT for revenue generation.  If we can get the same result in traffic improvement without the toll, then why toll at all?  Tolling is a very expensive and inefficient method of collecting revenue.   For comparison, you can check the SR520 bridge financial statement at http://www.wsdot.wa.gov/Tolling/520/Finance.htm
In the Q1 2016 statement they spent $5M to collect revenue of $17M.  That is an efficiency rating of 70% ($12M / $17M=.70) not counting the costs to taxpayers for the transponders or the overhead from WSDOT staff.

So back to I-405: As we examine a $0.75 toll payment, A point of clarification needs to be made regarding the $0.54 stated as overhead. That is how much money is paid to external companies in New Jersey and Texas.  By the way, part of that pays the salary of 120 customer service people to handle the problems that come up with billing.  Our toll payments are supporting these 120 positions that otherwise do not actually produce any value.  We’re just paying them to support the tolling system that pays them.  Think about that.

To further demonstrate how expensive and inefficient tolling is and the lack of planning, emergency generators were later bought and installed to power the toll signs along the highway after the major power outage November 18, 2015.  Over 100,000 people were without power, but at least WSDOT could keep the tolls running.

That $0.54 paid to external companies for the items mentioned in the article, like maintenance to keep rats out of the equipment or provide phone support with a 25 minute hold time, does not include the overhead costs associated with WSDOT itself.  But even if you only consider the $0.55 of overhead paid to external companies, that is only a 27% efficiency rating (0.20 / 0.75= 0.27 or 27%).  For comparison, nonprofit organizations are given a similar efficiency rating based on the amount of money they bring in vs. the amount of money that actually goes to the programs they are funding.   An efficiency rating of 27% is horrendous!  For comparison The Y (YMCA) has a rating of 89%. Or to compare to the method of collecting income tax by the IRS, it costs $2.8 Billion to operate IRS which collects $3.8 Trillion for an efficiency rating of 99.992%!  If the IRS were as inefficient at collecting taxes as the 405ETL, we would have a revolution.

With a bit of research, we could find the efficiency rating of our transportation system excluding the highway tolls. For a ballpark figure, $2.661 billion in transportation revenue was collected.  Even if it cost of $266 million to collect that transportation revenue, they would have an efficiency rating of 90%. If the rest of the revenue collection for transportation were as inefficient as tolling is (72%) then it would be costing us $745 million (28% of $2.661 billion) to collect the transportation revenue. (Anyone interested in researching this to get the actual efficiency rating is invited to gather that data. A good starting point is http://www.ofm.wa.gov/budget/info/transportationrevenue.asp for the revenue portion. Then we need the costs to collect that revenue to determine the efficiency rating excluding tolls.)   Thankfully, it does not cost that much.

The State of Washington already has far more efficient mechanisms in place for collecting revenue that would allow much more of the money collected to go toward transportation improvements instead of wasting it on paying for a toll system.

Readers, please take a moment to find out who your representatives are and email them or call them this week.  Next week they begin the Legislative session where they will be discussing bills 2312 and 6152 to begin the process of repealing these toll lanes.  You can find your representatives and senator and call and email them using this website:
http://app.leg.wa.gov/districtfinder/
(It is recommended you call them and then also follow up with an email.)
If you already know your district, you can email them from this website: http://app.leg.wa.gov/memberemail/
Finally, make sure you get at least one or two others to come to this website and sign the petition to make your voice heard more loudly.

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3 comments on “UPDATED: Analysis of “Anatomy of An I-405 Toll: Where Your Money Goes”
  1. […] Truth about federal highway funds and How HOT lanes carry fewer people than HOV lanes – How expensive and inefficient tolls are at collecting revenue – WSDOT Admits Traffic is Worse – An Analysis of 2-Person vs. 3+Person carpools in […]

    Like

  2. Jeff says:

    Taxation without representation. Who authorized this? They should be fired and sent packing. We have some of the highest property taxes, sales taxes and gas taxes in the nation. Deal with what is dealt and stop the pressing insistence on more taxation!

    Like

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