Public record request: Maybe MacGyver can save the tunnel

I decided to do a public records request. It’s a strange thing to do because it makes me feel like a real trouble maker. But I am just wondering how much of the tunnel is going to be funded with government issued debt.

I love debt. I think public debt is a great way to capture future value today, and tomorrow to make big investments in sustainable infrastructure. Value capture is a pretty cool idea, you borrow money, fix a problem, and pay back the loan with the extra money you make or save because of the efficiency.

But the deal is that the project has to deliver some value and the interest rate on the loan has to be favorable. I’ve already wondered aloud about what the State has taken into account how much money they will have to borrow for the tunnel, how much money locals will have to borrow, and whether any of this will be affected by the possible downgrade of the country’s credit rating.

This is a tiny little backwater of the internet, so my concerns are probably a bit hair brained. After all, the Congress passed the increase to the debt ceiling, and just like an episode of MacGyver, Washington DC’s politicians have jerry-rigged their way out of another mess.

But there’s always next week. How will the federal government get themselves out of this mess? Moody’s affirmed the country’s AAA rating but also issued a warning

The outlook for the U.S. grade is now negative, Moody’s said in a statement yesterday after President Barack Obama signed into law a plan to lift the nation’s borrowing limit and cut spending following months of wrangling between Democratic leaders and Republican lawmakers . . .

JPMorgan Chase & Co. estimated that a downgrade would raise U.S. borrowing costs by $100 billion a year, while Obama said it could hurt the broader economy by increasing consumer borrowing costs tied to Treasury rates. The ratio of general government debt, including state and local governments, to gross domestic product is projected to climb to 100 percent in 2012, the most of any AAA-ranked country, Fitch said in April.

“A downgrade is a sign that Congress is failing to address a real fiscal issue,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia.

I’m just curious. So here’s my information request. Will all the latest problems with credit ratings I wrote about over the weekend matter for the tunnel? I’m sure the Washington State Department of Transportation will get back to me with answers soon. Hey, I’m just a philosophy major with a pathological interest in public finance. But more and more the tunnel project looks like it would benefit from an outside consultant: MacGyver, where are you? Stay tuned.

VIA EMAIL

August 3, 2011

Fred Chang
Public Records Coordinator
Washington State Department of Transportation
999 Third Avenue, Suite 2424
Seattle, WA 98104

Re: Public Records Request

Dear Mr. Chang,

I submit the following request to the Washington State Department of Transportation under the Public Records Act (PRA), chapter 42.56 RCW.

I request a copy of the Preliminary Finance Plan for the Alaskan Way Viaduct Replacement Program that WSDOT has submitted to the Federal Highway Administration. I am especially interested in:

  • How much of the financing will be with bonds issued by the Washington State Treasurer;
  • Whether the Treasurer has been consulted about the impact of this issuance on the State’s credit rating;
  • How much the State expects to pay in interest; and
  • Whether any consideration has been given to the possible downgrade of the State’s credit rating because of Federal budget and borrowing problems and its effect on the the Alaskan Way Viaduct Replacement Program

Rather than a paper copy, I would prefer a PDF file or other electronic version. I am willing to pay costs of copying to the extent required by the Public Records Act.

Thank you.

Sincerely,

MacGyver

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