New Finance Plan: Costs cut by 64%

Yesterday, SMP released a finance plan that brings the $11 billion price tag down to $3.9 billion.

The plan to build a 10-mile elevated line includes four scenarios that call for financing $1.3 billion to $1.4 billion of the project's $1.7 billion cost, which would be paid back in 31 to 38 years, depending on how much motor vehicle license tax [MVET] revenue the monorail authority brings in.

The growth rate of MVET revenue will make or break this plan. I was at the SMP meeting on Monday where this budget was voted on, and experts on both sides of the debate spoke about their projections for MVET growth.

While there was definitely no consensus on what to expect from MVET, the general feeling from the meeting is that SMP's 6.1% is highballing slightly (by assuming the value of new car purchases will grow, even after controlling for inflation), but the 4.5% rate put out by ECONorthwest is seriously flawed because their model is unrealistic. For instance, it makes an assumption that nobody over 64 drives a car. While that might be nice, it doesn't match the reality we live in.