Anti-Bond Gadfly Sues to Stop Washington Bridge Deal

SAN FRANCISCO — Washington anti-tax and initiative crusader Tim Eyman has filed a lawsuit to try to void the state’s $519 million bond deal for a floating bridge project.

The lawsuit, filed in Whatcom County Superior Court last week, claims the state finance committee acted outside of its authority when it authorized the bond sale and asks the court to declare the bonds invalid.

Washington State’s bond counsel, Foster Pepper PLLC, said that nothing in the complaint has changed its legal approval of the bond issue, according to a supplemental disclosure to the official statement.

“Our office has acted properly and accountably,” treasurer’s spokesman Chris McGann said about the bond sale.

Washington Tuesday finalized the sale of the bonds, which were priced earlier in the month, for the State Route 520 floating-bridge replacement project.

The venture is backed first by toll revenue from the bridge, then by motor vehicle fuel taxes, and finally by the general obligation of the state.

Moody’s Investors Service in a report issued on Friday left its Aa1 rating and stable outlook unchanged despite the legal action.

“The lawsuit does not challenge the state’s general obligation pledge, which is the basis for the rating,” Moody’s analyst Nicole Johnson said in the note.

Standard & Poor’s also in a note Friday said its rating of AA-plus and stable outlook would be unaffected by the lawsuit.

 “We believe that the bonds were legally authorized,” according to Standard & Poor’s analysts.

The state tolling authority’s ability to increase tolls is also challenged in the lawsuit, which — if the court agrees — would require lawmakers to approve any future rate changes. S&P said that would introduce political risk.

The lawsuit also challenges Washington’s pledge of motor vehicle fuel taxes for bond repayment.

This is not Eyman’s first anti-toll effort.

The anti-tax advocate has a measure on next week’s statewide ballot that would prohibit the state from diverting gas taxes and toll revenues to the general fund and would limit the use of tolls to the transportation projects they pay for.

The initiative appears at least partly aimed at stopping the potential collection of tolls on the Interstate 90 crossing of Lake Washington to help pay for the construction of the replacement for the SR 520 floating bridge crossing the lake.

State officials have only studied the possibility.

Tolling on the current 520 bridge, which is expected to bring in around $1 million a week, will be mostly used to pay debt.

Toll collections will get underway next month using an all-electronic tolling system.

Washington officials have so far identified $2.50 billion in funding for the bridge: $1.75 billion from tolls and future federal funds, $550 million from state gas taxes, $120 million of sales tax deferrals, and $100 million from the federal government, according to the state Department of Transportation.

As it stands, Washington is more than $2 billion short in funding.

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