Sound Transit’s Long Term Budget Solution

The previous post concluded  Sound Transit needed to explain why the Debt proceeds increased by $1.4B in the 2025 budget they approved in March, while the October 2026 budget “sources available” dropped $3B between 2034 and 2035 and beyond.   This post questions why  Sound Transit’s Long Range Financial Plan  funding  required for completing the ST3 extensions in the 2026 Proposed Budget and Financial plan was  more than what was in  the 2025 Adopted Budget and Financial Plan the Board approved in March.

The difference is reflected in the “Financial Policy” in the two budgets: 

Financial policy 2025 budget

The agency uses debt to bridge the gap between the timing of expenditures and the receipt of revenues. The current Financial Plan forecasts $27.9 billion in bonds will be issued 2017–2046. Additionally, the plan includes $4.3 billion in nine executed federal loans through the Transportation Infrastructure Finance and Innovation Act and Railroad Rehabilitation and Improvement Financing programs.

 

Financial policy  2026 budget

The agency uses debt to bridge the gap between the timing of expenditures and the receipt of revenues. With the additional costs included in this plan, the Financial Plan forecasts the need to issue $86.7 billion in debt during 2017–2046. By state law and internal policy, issuing this amount of debt would cause Sound Transit to fall below coverage and capacity requirements. Under current law and policies, Sound Transit can only afford to issue $31.0 billion of projected debt, which includes $4.3 billion in nine executed federal loans through the Transportation Infrastructure Finance and Innovation Act and Railroad Rehabilitation and Improvement Financing programs.

 

One would think the need to increase lending from $27.9B to $86.7B in a single year would be worthy of comment. Yet no questions were asked and the Executive Committee unanimously passed Motion No. M2025 53 recommending the 2026 Proposed Budget to the Board. Rather than propose potential cuts  they passed Motion No. M2025-54. It adopted a Sound Transit 2026 State Legislative Program authorizing  Sound Transit staff and consultants in Olympia to: Seek state funding to support delivery of Sound Transit projects and services.

 

Yet the 2026  budget “Debt capacity 2017—2046” shows “Fall 2026 Projected Balance on tax-backed debt” needed doesn exceed capacity until 2035. Sound Transits September 2025 System Expansion Monthly Status Report indicates the Ballard Link Tunnel and Everett Link extension are the only Link extensions needing funding in 2035 and beyond.  Thus there’s ample time to provide funds for those extensions if needed.

 

The more immediate cost issue is Sound Transit’s 2026 budget  includes increasing Staff positions from 1635 by 203 to 1838 and a budget increase from $960,549,000 to $1,134,684,000. That works out as an 18.1% cost increase, $617,347 per position in 2026, surely worthy of review. Especially since Megaproject manager, Terri Mestas, has recently added MATOC contracts with15 companies for up to 7 years for $500M for environmental service, $1B for Design assistance, and $1B for “Project Management/Construction Management Services. 

 

The bottom line is Sound Transit still doesn’t recognize the ST3 extensions they continue to fund won’t reduce congestion.  The 2024 Lynnwood Link and “likely” 2025 Federal Way ridership negate benefits of further extensions. . The areas served by a second tunnel under Seattle and bridge over Duwamish waterway already have better access to transit.  Sound Transit’s Long-Range Financial Plan should reflect those results.