Sticker Shock: Cost Overruns May Sway Seattle Transit Voters

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DALLAS – A $53.8 billion, 25-year transportation plan will go before Seattle-area voters in November on the heels of a report detailing major cost overruns in an almost-completed light-rail system approved in 1996.

Central Puget Sound Regional Transit Authority is asking voters in Snohomish, King, and Pierce counties for an increase in a dedicated sales tax and a new property tax to fund its Sound Transit 3 plan to add 62 miles of light rail and 37 stations, bus rapid transit equipment and facilities, and expanded commuter rail to the regional system.

The increased taxes and fees on the November referendum are expected to bring in a total of $27.7 billion through 2041, with existing taxes, grants, fares, and other revenue sources contributing $26.8 billion to the ST3 plan.

Financing for the ST3 projects would include $11 billion of new debt supported by the dedicated taxes and fees, $4.7 billion of federal grants, and $1.5 billion of fares and other system revenues.

Passage of the referendum in November would raise the regional sales tax dedicated to Sound Transit by 0.5%, or $5 on a $1,000 purchase to generate an additional $16.8 billion from 2017 through 2041. The increase would bring the total dedicated sales tax to 1.4%.

A proposed new property tax of 25 cents per $1,000 of assessed valuation is expected to bring in a total of $4 billion over the 25 years. The local property tax for transit was authorized by a state law passed in 2015.

The third increase on the Nov. 8 ballot, a boost in annual vehicle registration fees, would generate almost $7 billion for ST3 projects.

However, opponents of the plan cited reports last week in the Seattle Times that found the ultimate costs of a light-rail plan adopted by voters in 1996 are 86% higher than the original budget. The earlier rail plan was expected to cost $1.67 billion when it was proposed but will wind up costing $4.95 billion, or $3.1 billion in 1995 dollars.

The last rail station promised in the 1996 plan is due to be completed in 2021.

The reported cost overruns are actually lower than those projected earlier by Sound Transit, which said the 1996 projects probably would cost twice as much as had been estimated.

Sound Transit spokesman Geoff Patrick said the 86% cost overrun reported by the newspaper "is in the ballpark." Final costs of the initial rail program will not be determined until all the projects are completed, he said.

Costs projections from the transit operator have been more realistic since the 1996 plan was developed and a significant project contingency fund was put in the current proposal to cover potential shortfalls, Patrick said.

"A new administration came in and got things on track and we've been delivering projects on schedule and within budget ever since," he said.

Sound Transit should have delayed a vote on the $54 billion plan until the ST2 transit plan approved by voters in 2008 is completed in 2023, said John Niles, who helped organize opposition to the ST3 plan.

"If enough people in Seattle region grasp that $53.8 billion dollars equals $1 million dollars multiplied by 53,800, ST3 taxes will lose in November," Niles said.

Projects in the $18 billion, 15-year ST2 program are currently 3% under budget, Patrick said.

State Sen. Reuven Carlyle, a Democrat who represents part of the transit district, said he will not endorse the ST3 plan because its higher property taxes coupled with a state cap on local property taxes leave little room for increased education funding as required by a court order.

ST3 "consumes the oxygen in the room," he said. "The transportation finance plan makes [education funding] dramatically more complex."

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