House Transportation staff warn of budget squeeze: falling fuel revenues, rising construction costs, culvert mandate and ferry funding timing loom large
January 13, 2025 | Transportation, House of Representatives, Legislative Sessions, Washington
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Committee staff told the House Transportation Committee Thursday that the state transportation budget faces multiple near-term pressures: a drop in projected fuel- and fee-related revenue compared with earlier forecasts, a steep rise in construction costs since 2020, a multibillion-dollar culvert-replacement obligation stemming from a federal court injunction, and ferry vessel procurement costs that may not be known in time for this session’s final budget decisions.
Staff coordinator Mark Mattson and budget coordinator Amy Skay presented a data-driven overview of the transportation budget and the risks that will shape the committee’s 2025 work. Mattson summarized the revenue picture: “The cumulative revenue change equates to about, a drop of $2,200,000,000 over 10 years,” he said, describing the difference between the February 2024 forecast and a lower November forecast that projects declining fuel-tax receipts over the decade.
Mattson presented high-level figures for the current biennium: appropriations total roughly $14.6 billion, with large components including the Highway Improvements Program (about $4.8 billion), debt service (about $1.8 billion), operations/maintenance/preservation (about $2.0 billion) and the state ferry system (about $1.5 billion). He then reviewed the transportation revenue mix staff watch closely: fuel tax collections (about $3.2 billion), federal funds (about $2.6 billion), fund balances (about $2.1 billion), vehicle licensing and fees (about $2.0 billion) and bonds (about $1.5 billion).
Staff described construction cost escalation as a major constraint on the capital program. Mattson summarized the National Highway Construction Cost Index trend and offered project examples: the SR 520 West End project estimate has increased about 66 percent to roughly $683 million; combined I-405 and SR 167 capacity improvements increased by about $275 million (roughly 46 percent); the SR 18 widening estimate rose by about $912 million (about 137 percent); and the North Spokane Corridor estimate increased about $271 million (roughly 16 percent). Mattson said these bid and price pressures have tightened the state’s ability to fund and deliver projects on previously forecast schedules.
On environmental and legal obligations, Mattson reviewed the 2013 federal court injunction requiring correction of culverts that block fish passage. He said Washington State Department of Transportation (WSDOT) is responsible for roughly 463 barrier culverts, of which 114 have been corrected as of November 2024 and 337 are in design or construction. The current capital plan allocates about $4.1 billion for culvert work, but WSDOT now estimates an additional roughly $5.0 billion is needed to meet the injunction requirements.
Skay outlined the budget process timetable and emphasized that most transportation spending is concentrated in capital projects and contracts already under way, which limits short-term flexibility. “A lot of the money is funding is in projects, also in operating budget programs, but also in a lot of large projects already under contract and underway. So the flexibility is not as much as you might hope for when making budget decisions,” Skay said.
Committee leaders warned that ferry procurement timing will complicate session decisions. Mattson and members noted that competitive bids for new ferry vessels are not likely to be returned before the legislature adjourns; staff said the committee will therefore need to make assumptions about ferry costs and how much to set aside for ferries when finalizing the transportation budget.
Mattson and Skay framed the budget problem as driven by projects rather than staffing: with a large share of expenditures in capital delivery, even moderate percentage changes in available revenue can force project delays or rescheduling. Staff told members the committee will produce a “no new revenue” budget as a starting point but will continue discussions about revenue options to preserve priority projects.
Staff closed by encouraging members to raise district-specific emergent needs early so the committee can consider real-time repairs or replacements for roads that fail during the session.
Staff coordinator Mark Mattson and budget coordinator Amy Skay presented a data-driven overview of the transportation budget and the risks that will shape the committee’s 2025 work. Mattson summarized the revenue picture: “The cumulative revenue change equates to about, a drop of $2,200,000,000 over 10 years,” he said, describing the difference between the February 2024 forecast and a lower November forecast that projects declining fuel-tax receipts over the decade.
Mattson presented high-level figures for the current biennium: appropriations total roughly $14.6 billion, with large components including the Highway Improvements Program (about $4.8 billion), debt service (about $1.8 billion), operations/maintenance/preservation (about $2.0 billion) and the state ferry system (about $1.5 billion). He then reviewed the transportation revenue mix staff watch closely: fuel tax collections (about $3.2 billion), federal funds (about $2.6 billion), fund balances (about $2.1 billion), vehicle licensing and fees (about $2.0 billion) and bonds (about $1.5 billion).
Staff described construction cost escalation as a major constraint on the capital program. Mattson summarized the National Highway Construction Cost Index trend and offered project examples: the SR 520 West End project estimate has increased about 66 percent to roughly $683 million; combined I-405 and SR 167 capacity improvements increased by about $275 million (roughly 46 percent); the SR 18 widening estimate rose by about $912 million (about 137 percent); and the North Spokane Corridor estimate increased about $271 million (roughly 16 percent). Mattson said these bid and price pressures have tightened the state’s ability to fund and deliver projects on previously forecast schedules.
On environmental and legal obligations, Mattson reviewed the 2013 federal court injunction requiring correction of culverts that block fish passage. He said Washington State Department of Transportation (WSDOT) is responsible for roughly 463 barrier culverts, of which 114 have been corrected as of November 2024 and 337 are in design or construction. The current capital plan allocates about $4.1 billion for culvert work, but WSDOT now estimates an additional roughly $5.0 billion is needed to meet the injunction requirements.
Skay outlined the budget process timetable and emphasized that most transportation spending is concentrated in capital projects and contracts already under way, which limits short-term flexibility. “A lot of the money is funding is in projects, also in operating budget programs, but also in a lot of large projects already under contract and underway. So the flexibility is not as much as you might hope for when making budget decisions,” Skay said.
Committee leaders warned that ferry procurement timing will complicate session decisions. Mattson and members noted that competitive bids for new ferry vessels are not likely to be returned before the legislature adjourns; staff said the committee will therefore need to make assumptions about ferry costs and how much to set aside for ferries when finalizing the transportation budget.
Mattson and Skay framed the budget problem as driven by projects rather than staffing: with a large share of expenditures in capital delivery, even moderate percentage changes in available revenue can force project delays or rescheduling. Staff told members the committee will produce a “no new revenue” budget as a starting point but will continue discussions about revenue options to preserve priority projects.
Staff closed by encouraging members to raise district-specific emergent needs early so the committee can consider real-time repairs or replacements for roads that fail during the session.
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