Part III: Cost Exceeds Benefits in Sound Transit's Light Rail Expansion
Local elected officials in the central Puget Sound region are asking voters to approve a $38 billion, 20-year Roads & Transit package in the November election. The plan combines spending $24 billion for light rail and other regional transit projects and $14 billion for highway expansion.
The Puget Sound Regional Council (PSRC) required that Sound Transit prepare a benefit-cost analysis of the light rail portion of the Roads & Transit package.
Sound Transit compiled the costs and benefits of 50 new miles of light rail over the next 60 years. The costs are heaviest during construction and the benefits arrive years later when some of the new light rail opens for service in 2019. Sound Transit’s calculation yielded a total adjusted value of $25.7 billion benefits and $9.5 billion cost.
However, the Sound Transit analysis includes many assumptions that are unrealistic. In preparing this policy note, we use Sound Transit’s methods of analysis, but correct five misleading assumptions to be more reasonable and responsible. These realistic changes reveal the public benefits of light rail expansion to be lower than the cost of building the project in the first place.
Under the corrected analysis, the adjusted value of benefits descends to $9.5 billion while costs rise to $10.0 billion. The benefit-to-cost ratio becomes 0.9, meaning the benefits are not worth the costs. The following table shows Sound Transit’s results, compared to using assumptions that are more realistic.