Gov. Inslee’s proposed supplemental transportation budget would increase 2023–25 appropriations from all funds by $1.580 billion (11.6%). Of that, $1.035 billion is considered maintenance level and $544.9 million is new policy. (Of the total change, $418.0 million is from federal funds.)

Generally, the maintenance level is the cost of continuing current services, adjusted for inflation and enrollment. In the transportation budget, the maintenance level includes capital reappropriations, or reauthorization of previous appropriations that weren’t spent. As we wrote in our recent report on the transportation budget, actual capital spending by the state Department of Transportation (WSDOT) for 2021–23 ended up being 23.4% ($1.078 billion) lower than the amount appropriated in the 2023 supplemental budget. Much of that underspend would be reappropriated for 2023–25.

In the governor’s proposal, the largest new policy change for 2023–25 is $150 million from the move ahead WA account for fish passage barrier removal (in addition to the $1.041 billion that is currently appropriated for this purpose for 2023–25). (Note that when the Legislature approved the 16-year move ahead WA revenue package, it also approved a spending plan. Using an additional $150 million of these funds for barrier removal now would displace planned spending in the future.)

As I’ve written, the cost estimate for fish passage barrier removal recently doubled. According to WSDOT, the state needs to increase appropriations for this purpose by $725 million in 2023–25, $1.59 billion in 2025–27, $1.16 billion in 2027–29, and $229 million in 2029–31. The governor’s proposal would not change the current plan for fish passage barrier removal appropriations in future biennia. However, the proposed budget bill would require WSDOT to “analyze contracting methods, alternative bundling concepts, and other options to manage costs” as it works to remove fish passage barriers under the federal injunction. WSDOT would be required to submit a report to the Legislature by Dec. 15, 2024 with recommendations.

Fish passage barrier removal is not the only project experiencing cost increases. Gov. Inslee’s transportation project list includes $179.0 million in 2025–27 and $75.0 million in 2027–29 to address a shortfall in the I-405/SR 522 to I-5 capacity project. The proposal does not specify where this money would come from. According to the Office of Financial Management, the Legislature and WSDOT are considering options, including potentially changing the timeline for the project or increasing tolls.

Other notable items in the governor’s proposal:

• The Washington State Institute for Public Policy (WSIPP) would be required to conduct an “assessment of the passenger and air cargo forecasts cited in the Puget Sound regional council regional aviation baseline study.” WSIPP would also have to “identify effective national and international strategies to reduce demand for air travel.” A report would be due June 30, 2025.
• The Western Washington University Center for Economic and Business Research would be required to conduct an economic study of San Juan County, to include the ferry system, tourism, and housing. The study would be due Sept. 30, 2024.
• $400,000 from the multimodal account would be appropriated so that WSDOT can “complete transportation revenue forecasts until these responsibilities are transferred to the Economic and Revenue Forecast Council in September 2024. The department also will document the process and data needed for these forecasts.” (For more on this move, see here.)

The governor’s proposed spending increases would not be funded by increases in transportation revenues—the November transportation revenue forecast was practically unchanged from March. (Revenues in 2023–25 are now expected to be $56.4 million less than expected in March; for the period through 2027–29, revenues are expected to be $63.6 million higher than expected in March.) Further, the governor is not proposing that additional bonds be issued.

The governor’s proposal would make use of the increased revenues from carbon emission allowance auction proceeds (which are not included in the transportation revenue forecast). The governor would increase transportation budget appropriations from the climate commitment act accounts by $104.4 million in 2023–25.

The budget documents include balance sheets for each transportation account for the current and next two biennia based on the governor’s proposal. All would balance in 2023–25, but 12 accounts (out of 60) would not balance in the second and/or third biennia. (In the enacted 2023–25 transportation budget, all accounts balanced over six years.) The Puget Sound ferry operations account, connecting Washington account (the 2015 revenue package), move ahead WA account (the 2022 revenue package), and carbon emission reduction account (funded with allowance auction proceeds) would have especially large deficits in the out-years under the governor’s proposal. Some of the accounts could be balanced over six years if funds were transferred from other transportation accounts, but not all.

(For more on Washington’s transportation funding challenges, see our report. Previous posts on the governor’s 2024 supplemental budget proposals are here.)