Every big transportation project starts with a cost estimate. The tedious debate on whether the project costs too much, or is just right, is a proxy fight over whether it’s a good project or not. The estimate spirals upwards, which breeds cynicism among opponents while providing an opportunity to revisit all of the old arguments. Since those arguments were never really about fiscal return on investment, no one has actually changed their mind.
It’s a pattern that’s repeated through Sound Transit 1, the Monorail, the Deep Bore Tunnel, Sound Transit 2, and now the Center City Connector. For Sound Transit 3 and High Speed Rail, the cycle may just be beginning. Some overruns and delays were worse than others: Sound Transit 2’s slippages appear to be an order of magnitude milder than Sound Transit 1. Some of those projects survived, while others died. Among all of those, only ST1 has actually been around long enough for many people to find it indispensable.
Amid this sea of misdirection, sophisticated observers should keep a few points in mind.
- The primary value of cost (and ridership) estimates is to compare the relative impact of different courses of action. The main drivers of absolute costs (and revenues) are much larger economic forces that no model can hope to capture, but the relative costs of different projects are likely to remain more consistent.
- If a booming economy raises project costs and revenue without raising anyone’s tax rate, that is flimsy grounds to reconsider the project.
- Absolute costs have almost no political valence, at least within an order of magnitude. It is hard to imagine a voter that opposed the $54 billion* ST3 package that would have voted for it at $30 billion. Both are colossal amounts of money and the $24 billion difference provides no useful context.
- A good project is still a good project if the cost grows 20%; a bad one is bad at any price.
- Given the above, civil servants, consultants, and political appointees that cut corners in the model to embellish a project’s estimate are not only exercising poor ethical judgment, they are also storing up trouble for the project’s future while doing little to help it in the present.
- At election time, the alternative to a measure is not your preferred configuration of projects, but lower taxes.
Obviously, one can take this line of thinking too far. It is absolutely worthwhile to look at what other jurisdictions are paying for infrastructure and ask why your costs are out of line. This exercise, if done in a constructive spirit, can point out dodgy estimates and identify opportunities for savings that allow more service delivery.
Costs do matter to voters at very coarse scales. If we could get all the benefits of ST3 for a total cost of $100 per person, anyone opposed to the project would probably be trolling.
Ask a Frenchman if he wished that taxes had been a little bit lower in the 1980s instead of having the TGV system today, and you will rightly invite ridicule. That said, more taxes are fine until they’re not — there’s a point where they lead to ruin. But we are nowhere near that scale. Washington’s Gross State Product is $477 billion. In current dollars, ST3 plus top-end HSR estimates come out to about $62 billion combined. Spread over 30 years, that’s 0.5% of GSP** — not negligible, but not ruinous for truly transformative infrastructure investments.
Ultimately, I want the Northwest to provide rapid travel options both within and between dense and vibrant cities. While mostly a quality of life issue, mobility also enables economic growth. This is worth almost any price, and setting arbitrary cost thresholds makes no sense at all.
* I am on record as thinking that the $54 billion figure is a bogus method of accounting, and $20 billion is a more meaningful way to communicate the true cost. Nevertheless, that is the headline number that voters had to consider in 2016.
** assuming farebox recovery, two Federal governments, Oregon, and BC contribute virtually nothing. Obviously, the 0.5% figure is napkin math.