(The Center Square) – Among the bills advancing in the Washington legislature is a measure that would give Sound Transit the ability to issue bonds with 75-year maturities.
Senate bill 6148 initially asked for the extended bond bill last year, but it did not advance.
Since then, the transit agency revealed its light rail plan is tens of billions of dollars over budget, and ST admits its 2016 presentation to voters for a 25-year plan cannot be implemented with current debt limits.
So comes the request to lawmakers to extend bond obligations for additional decades.
As reported by Washington Policy Center in testimony to the State Senate Transportation Committee, Sound Transit CEO Dow Constantine “made it sound as though the extended bond maturities were a minor bit of financial engineering to give the agency more ability to manage its debt. What he didn’t say was that just like a thirty-year mortgage greatly increases the total interest paid compared with a fifteen-year mortgage, the 75-year bonds would increase the debt service Sound Transit would ultimately pay compared with standard 30-year bonds,” wrote WPC’s Charles Prestrud, in a Feb. 10 post.
During Wednesday testimony ahead of a final vote on the Senate floor, bill sponsor Marko Liias told members the bond extension is not a new idea.
“In 1998, Congress passed the Transportation Infrastructure Finance and Innovation Act. We call it TIFIA. The state of Washington has participated in the TIFIA program several times, most notably to construct the new 520 floating bridge, about 10 years ago,” said Liias.
“Sound transit is underway on constructing one of the largest light rail expansions in the country, and they face constraints in the financing tools that they have available and in how much they can build as quickly as possible. By utilizing the TIFIA program that Congress recently extended, they can put more projects on the ground more quickly to help deal with the commute in the Puget Sound region and to create jobs,” Liias said.
Sen. T’wina Nobles, D-Fircrest, was the only Democrat to vote against the bill.
“I just want to be a strong advocate for my district in a 28th legislative district, where I consistently hear my constituents say that Sound Transit is over promising and under delivering,” said Nobles. “I do want to support Sound Transit…..I don’t know that with what we pay in our RTA [Regional Transit Authority] that we are seeing our fair share of projects in the district.”
As reported by Prestrud at WPC, “the extended bond maturities and extended timeline for implementation would convert the twenty-five-year ST3 plan voters approved in 2016 into a much lengthier plan. And the increased debt service would make it very unlikely the Sound Transit taxes would be rolled back, at least not within the lifespan of anybody who voted in 2016.”
Sen. Phil Fortunato, R-Auburn, told The Center Square the bill obligates multiple generations to projects that continue to explode in cost with lengthy delays in completion.
“This is the most expensive mobile homeless camp on the planet. You know, many of us here, remember ‘woops’ [WPPSS], the five nuclear power plants, which was the largest bomb to fall in state history. This is going to be woops on wheels,” said Fortunato.
The Washington Public Power Supply System (WPPSS), colloquially known as “woops,” was a 1970s project that aimed to build five nuclear power plants in Washington. Due to massive cost overruns and the largest municipal bond default in U.S. history, only one plant was completed.
“When your grandkids buy their second car, then you’ll be able to pay off your car tabs,” said Fortunato, warning of the bill’s passage. “Now, how many generations is it going to be? It’s going to be five generations before you can get rid of these stupid bonds. I mean, this is just ridiculous.”
“Sound Transit collects over $2.5 billion per year in tax revenue and it finished 2024 with more than $5.8 billion in the bank. That is more than enough to implement region-wide transit service improvements, but apparently it isn’t enough for the extravagant light rail construction project Sound Transit continues to pursue,” wrote WPC’s Prestrud. “This is further evidence of the need for accountability, not more borrowing authority.”
The average household in the Sound Transit district now pays over $1,700 per year to the agency in sales tax, motor vehicle excise tax and property tax.
Senate bill 6148 passed off the Senate floor Wednesday with all Republicans joined by Democrat Nobles voting in opposition.
It now moves to the House.
