Over the lifetime of the ST3 program, Sound Transit now expects a revenue shortfall on the order of $8-12 billion. Without adjusting expenditures, the agency will run out of available debt capacity by 2028. On Wednesday afternoon, a Board workshop learned more about the depth of the financial crisis and began to review options for responding. On average, according to one board member, the financial outlook suggests a five-year delay to projects not already in construction.
Generally, staff are suggesting extended project timelines. (They were careful not to couch this as a recommendation). In this scenario, environmental and preliminary engineering (E/PE) work might begin on the original schedule, but detailed design and construction work would follow over a longer window than currently projected. E/PE work is relatively inexpensive, typically about 10% of project costs. Getting it done on schedule preserves flexibility in case new revenue or grant options present themselves.
A number of board members raised the possibility of asking voters to raise the debt limit. Similar to municipalities, Sound Transit can borrow up to 1.5% of the assessed value of properties within the RTA. That could be raised to 5% of assessed value with the approval of 60% of voters. There was interest too among some board members in raising taxes or changing the mix of taxes supporting the agency. For now it would be unsafe to rely on that. Any such ballot measure is further in the future than Sound Transit should wait before acting.Continue reading “Sound Transit faces $8-12 billion revenue shortfall”