The Seattle Department of Transportation (SDOT) has paused work on the Center City Connector (CCC) and several other projects as the city wrangles a steep revenue deficit. The pause appears likely to further delay the start of service. But the recession also threatens the longer term future of the streetcar. Needed revenues from the rideshare tax are less likely to materialize, and there is sharpened competition for scarce general fund resources.
All told, the paused projects are expect to reduce SDOT spending this year by $58 million, or 8% of the $739 million budget. That roughly fills this year’s budget gap for SDOT. SDOT’s revenues are expected to fall short of plan by more than $50 million, including an expected loss of $13 million in general fund support, a $20 million shortfall on parking tax revenues; and at least $7 million less in street use fees. SDOT’s near term options are constrained as they are continuing projects already in construction. At the same time, the West Seattle Bridge is unexpectedly failing, setting SDOT up for a costly repair bill, or even more costly replacement.
The Center City Connector would connect the South Lake Union and First Hill streetcars through downtown Seattle. The project was funded in the budget passed in 2017, but then placed on hold in April 2018. After identifying a series of design flaws and cost underestimates in the plan, an independent review added $88 million to the estimate in the budget, and potentially more if assumed FTA grant funding were to fall through. But the city nevertheless determined to get the project back on track, taking two steps to move the project ahead.
First, a $9 million provision in last year’s budget advanced work on reworking the design. That work was to have been completed this year and would set the project up for federal grant applications later this year. Those will presumably now be delayed with implications for the project delivery schedule. The streetcar was expected to start service in 2026.
Second, last year’s budget addressed the larger revenue shortfall with a tax on rideshare trips. Most of the expected revenues through 2025 are split between affordable housing and for the streetcar. Before passage, the council amended the spending plan resolution to allow a range of other transit expenditures including purchased service, a voucher program for transit, and the West Seattle-Ballard Link project.
We should now question how much of this funding will materialize. The revenue target assumed rideshare trips in Seattle would nearly double by 2025 over pre-COVID levels. That was already aggressive, and assumed almost no impact from expected “minimum wage” regulations. Those will make rideshare more expensive for customers, adding maybe $4 to a typical $12-14 ride. Instead, the pandemic tanked rideshare demand, with bookings reduced 80% in April and likely to stay depressed.
The streetcar will need to compete for those diminished revenues with other transit uses in the spending plan, with the affordable housing that was to have been supported by the same rideshare tax, and with the full range of revenue-challenged general fund spending priorities.
Already, Council Member Lisa Herbold has signaled her intent to cancel rather than defer the streetcar further. Herbold has been a long term skeptic of the CCC, and unsuccessfully attempted to eliminate funding in the past. With so much turnover on the Council since 2017, and newly constrained funding for everybody else’s priorities, she may make more headway in this year’s budget cycle.