The August 6th Seattle Times Traffic Lab article, "Two light rail stations escape ST3 budget chopping" typifies the paper's decade long abetting of Sound Transit incompetence. They ignore the real issue with Sound Transit realignment. That it results in construction costs and debt service payments extending decades beyond the end of the ST3 taxes voters approved in 2016.
ST3 began as the result of Sound Transit Board members asking the legislature to pass legislation enabling them to ask voters for an additional $1B in taxes beginning in 2017 for 15 years. Sound Transit used the legislation in 2016 to get approval for taxes for the period from 2017 to 2041.
The "Long Range Financial Plan 2017-2041" in Sound Transit's 2019 Proposed Budget and Financial Plan was the first to include long-range planning. (Previous posts have detailed how the long-range plan exemplified CEO Rogoff's delusional light rail ridership claims and failure to increase bus transit capacity.)
Prior to the 2016 vote, residents were told the ST3 taxes would fund the $54B "Prop 1 and Beyond" transit system expansion. The 2019 budget detailed how the $54B needed to fund the expansion had increased to $96B. However the $64B in tax revenue for 2017-2041 still left a $17B "Tax Based Debt" in 2042 after ST3 taxes ended.
The budget justified the remaining debt with the following "Voter Approval Requirement" statement:
The Sound Transit Board Recognizes that the taxes approved by voters are intended to implement a regional transit system and to provide permanent funding for its future operation. Although the Board has the authority to fund ongoing costs through a continuation of the local taxes authorized by the voters..."
Yet nothing in the ST3 initiative approved funding beyond 2041 for implementation or operation. Also passage didn't give the Board the authority to continue the local taxes beyond 2041.
Sound Transit detailed the Board's purported "authority" regarding their ability to borrow funds in the 2021 Financial Plan and Adopted Budget, "Appendix A--ST3 Financial Policies"
Similarly the Board recognizes that bonds issued and loans incurred by Sound Transit will be secured by the pledge of payment through revenues including local taxes. When bonds are issued or loans secured, Sound Transit will enter a binding contract with its bondholders and lenders that requires first lien claim against pledge revenues for repayment and for maintenance and operation of the transit facilities and services funded by the bonds. Stated differently, bond holders and lenders will have a legal priority to Sound Transit's local tax revenues to repay the bonds and operate and maintain the transit system.
Not only did the 2021 budget claim the ability to issue bonds requiring payments after 2041, it gave the Board the following responsibility for "project scope," deciding how the money they borrow will be spent.
The LRFP assumes that future system expansion projects will retain the size and scope originally approved by voters under Sound Move, ST2 and ST3. But as the system is built out the Board may determine that future projects' scope may need to be altered and potentially increased to meet voter approved goals, public concerns, or other reasons. Such future expansion decisions cannot be known or captured in the current LRFP, and could potentially increase the Agency's financial risk.
Sound Transit's "Realignment "was the result of of conclusion the current plan was "unaffordable". Not because ST3 taxes wouldn't fund it but because the increased costs resulted in needed "Tax Backed Debt" exceeding "Agency Debt Capacity". The August 5th Sound Transit Board detailed how projects will be delayed until they can be funded by the allowable bond debt, "1.5% of the assessed valuation of real property within the regional transit authority district."
Again the Traffic Lab article typifies the Times abetting Sound Transit. They and Sound Transit need to recognize there was no legal basis to claim the Board has the authority to fund ongoing costs through a continuation of the local taxes authorized by the voters..". Realignment should be based on what can be funded with ST3 taxes that end in 2041. That realignment plans for extensions and extending bond terms beyond 2041 require Sound Transit get approval for ST4 for funding.
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