(The Center Square) – Sound Transit’s capital project costs are projected to increase by up to $30 billion as a result of rising costs, but so far no tax proposals have been pitched to plug the gap.

Overall, the accumulative impact of cost pressures represents a 20% to 25% increase over the agency’s current long-range financial plan.

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Sound Transit’s 30-year financial plan – set at $150.5 billion – could increase by somewhere between approximately $22 billion and $30 billion due to cost growth on the agency’s capital program. The capital program includes major ST3 light rail projects that would connect the agency’s transit network to Seattle’s Ballard and West Seattle neighborhoods, Tacoma, Everett, South Kirkland and Issaquah.

ST3 was approved by voters in 2016 and created Sound Transit’s own sales and use tax, along with a 25-cent per $1,000 property tax that the average King County homeowner pays $220 annually.

The flagged rise in costs are a broad result of lower revenues and higher financing costs, as well as cost pressures resulting from supply chain disruptions and labor shortages. 

Cost pressures related to improved service delivery could require an additional $5 billion. This is mainly driven by lower-than-expected sales tax revenue forecasts and higher financing costs to fund capital and service cost increases.

If Sound Transit does not take proactive steps to keep cost trends in line with projected revenue, the agency will face an unaffordable long-range plan. However, Thursday’s presentation to the board of directors notes that the agency still has significant financial capacity to deliver what ST3 promised when it was first approved by voters in 2016. 

Current balances are strong with $7.1 billion in cash and investments as of July. Expenditures are expected to exhaust cash by the 2030s when major construction starts. 

King County Executive Shannon Braddock had an optimistic response to the increase in costs, saying the fiscal challenges provide opportunities for the board to take greater care in building Sound Transit’s transportation system.

Seattle City Councilmember Dan Strauss, who is also a member of the Sound Transit Board of Directors, echoed that sentiment.

“I’m viewing this as an opportunity for us to really kick the wheels of these trains to ensure that everything is sturdy so we can be successful in the future,” Strauss said during Thursday’s meeting.

In a statement following the meeting, Seattle Mayor Bruce Harrell said he firmly believes the best approach to managing costs is by advancing Sound Transit projects as quickly as possible.

“Every day of delay adds unnecessary expense to taxpayers. That’s why Seattle has taken unprecedented steps to support Sound Transit’s work, including streamlining our permitting processes and expanding our partnership team,” Harrell said.

The Seattle mayor is also advocating for the agency to prioritize the West Seattle and Ballard Link extension projects because they will deliver to denser neighborhoods and increase ridership on the Link light rail.

Sound Transit Board Member Claudia Balducci – who also serves on the King County Council – says the agency should consider “big swings” to “finish the spine,” referring to connecting Link light rail services from the city of Everett down south to Tacoma. 

Balducci said the agency could reconsider if Seattle needs a second downtown tunnel as part of the ST3 ballot measure.

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“We could save a lot of money; we could deliver West Seattle to Ballard and the spine faster,” Balducci said.

Next month, the agency’s Finance and Audit Committee will make initial assessments of policy and revenue opportunities to increase financial capacity.