DALLAS — Without a sales tax increase, the Denver area’s FasTracks transit system — originally designed as a 12-year project — would not be completed until 2042, according to the Regional Transportation District.
Despite the threat of a 25-year delay, RTD will not be asking for the 0.4-cent tax hike this year. In a special meeting last week, the district’s board called off plans to seek voter approval of the increase in November.
“What it really comes down to is the state of the economy,” RTD chairman Lee Kemp said in announcing the decision. “While we’re seeing some recovery, this is still a tough time for a lot of folks, and we just don’t feel it’s prudent to go to the ballot while so many people are still facing personal challenges.”
The decision coincided with Standard & Poor’s decision to change its outlook to negative from stable on the RTD’s A-plus-rated certificates of participation. The outlook affects COPs issued in 1998, 2002, and 2005.
The district had $924 million of outstanding sales tax bonds rated A-plus last year, in addition to $291 million of lease-secured debt, according to Standard & Poor’s, which still has a stable outlook on the debt. Sales tax revenue of $371 million last year represented a 10% decline from 2008, analysts said.
The negative outlook on the COPs was directly related to the so-called Eagle P3 project, a rail line from downtown to Denver International Airport, financed through a potential public-private partnership as part of the FasTracks plan. The district has not yet accepted private bids for the project, but it could possibly involve substantial additional amounts of RTD appropriations, analysts said.
The massive FasTracks system — a combination of light- and commuter-rail projects, dedicated bus lanes, and a series of stations throughout the metro area — was approved by voters in 2004 and was expected to reach completion by 2017.
However, cost estimates have soared to $6.5 billion from $4.7 billion. Combined with falling revenue, that has opened a $2.4 billion budget gap for the project.
The plan calls for 122 miles of commuter rail and light rail, 18 miles of rapid-transit bus service, 21,000 new parking spaces, redevelopment of Denver’s landmark Union Station, and other improvements in the eight-county district.
“If RTD does not secure additional revenues, current estimates indicate that the entire FasTracks system will not be completed until 2042,” the agency said, promising to pursue a tax-hike vote next year.
