Seattle Monorail Project - Financing Troubles & Defeat

Financing Troubles & Defeat

The tax to fund the project began effective June 2003, and was levied annually on each car registered in the city based on the MSRP of the vehicle and a fixed depreciation table. In 2005, the average monorail tax per vehicle was $130 annually.

The project soon fell under intense public scrutiny, when actual revenue from the motor vehicle excise tax came in 30% under projections while projected costs rose by 10%. To bridge the shortfall, the SMP initially proposed extending the tax and bond repayments over a 50 year time horizon, resulting in nearly $9 billion in interest paid on the $2 billion construction. The plan proved highly controversial and five days later the SMP withdrew its financial plan and the director and board chairman resigned under pressure.

The then-Mayor Greg Nickels gave the board an ultimatum to create a new plan or lose city support for the project. A new plan was not developed, and on September 16, 2005, Nickels withdrew city support for the project. While the city of Seattle could not officially stop the project, it could withhold permission to build on or above city land, as had been proposed under I-83 a year earlier. Nickels also called on the Seattle Monorail Project to put a measure on the November 2005 ballot to determine whether or not to continue with the project, marking the fifth time Seattleites would voted on the issue. This measure shortened the initial phase of the Green Line to 10.6 miles (17.1 km) with the remaining 3.4 miles (5.5 km) to be added later, and the SMP said it would dissolve itself if the measure failed.

"Proposition 1" was defeated, 65% to 35%, and in response the SMP reduced staff, terminated the annual motor vehicle excise tax on Seattle vehicles effective June 30, 2006 (three years after it was first implemented) and began liquidating properties already purchased for the Green Line.

The Seattle Monorail Authority was formally dissolved on January 17, 2008, after liquidating all of its assets, repaying its debts, and transferring its remaining $425,963.07 to the King County Metro system. The monorail project ultimately cost Seattle taxpayers $124.7 million.