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Sound Transit: $17.8 billion price tag for 2008 isn’t the same as $17.8 billion cost for 2007

Post by Joe Turner on Oct. 1, 2008 at 12:46 pm with No Comments »
October 1, 2008 12:46 pm

The fact that Sound Transit’s ballot measure next month has the same number (Proposition 1) as it had in 2007, and the fact that the dollar amount they are using is the same ($17.8 billion) would make it appear that the same plan is on the ballot this year.

Not so! The one on the ballot this time is actually smaller. (But the tax amount for transit is exactly the same: a 0.5 percent sales tax.)

I’m not sure why Sound Transit decided to describe this year’s Proposition 1 as a $17.8 billion package. I guess the Seattle newspapers so browbeat them over the cost last time around that they decided to overstate the cost rather than understate it. They even included the $17.8 billion in the ballot description.

Here’s why they aren’t the same: The $17.8 billion price tax for the 2007 ballot measure was the cost in current year dollars. That is, if all the light-rail stuff and Sounder stations and buses were bought today, they would have cost $10.8 billion, and if all the highway projects in that package were built today, they would have cost $7 billion. The total: $17.8 billion.

The $17.8 billion price tax for THIS YEAR’S ballot measure is stated in “year of expenditure” dollars. That is, the rail line and stations will be built over a 15-year period and a station built in 2023 is going to cost more than a station built today, because of inflation.

Apples and oranges!

Here’s the apples-to-apples comparison: Last year’s $17.8 billion is really $9.3 billion in this go-round, for construction. Partly because there are no highway projects in this year’s ballot measure. And partly because the $10.8 billion transit component in last year’s package has shrunk to $9.3 billion. (That’s why light rail is not getting as far as Tacoma in this year’s plan.)

If you had used “year of expenditure” to describe the 2007 ballot measure, that $17.8 billion would have been $37.8 billion. The construction timeline was five years longer, through 2028.

There’s also a maintenance and operation component of both packages, but that’s an item for another blog post.

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