Is Light Rail Financially Sustainable?

Using the WSDOT numbers, the Light Rail portion of this project will lose $88.9 million the first year and continue to lose an increasing amount that grows to over $2 billion in 12 years (the year 2030). Check the math:

Year Riders per day Ticket Price Riders millions Tickets Income millions Operating Cost millions Interest millions Net Loss millions Cumulative Loss millions Debt Balance millions
2018 13800 2.00 5.0 10.1 4.4 94.6 88.9 -88.9 945.8
2019 14292 2.10 5.2 11.0 4.6 103.5 97.1 -185.9 1034.6
2020 14784 2.21 5.4 11.9 4.8 113.2 106.1 -292.0 1131.7
2021 15276 2.32 5.6 12.9 5.0 123.8 115.9 -407.9 1237.7
2022 15768 2.44 5.8 14.0 5.3 135.4 126.6 -534.5 1353.6
2023 16260 2.56 5.9 15.2 5.6 148.0 138.4 -672.9 1480.3
2024 16752 2.69 6.1 16.4 5.8 161.9 151.3 -824.2 1618.6
2025 17244 2.82 6.3 17.7 6.1 177.0 165.4 -989.5 1769.9
2026 17736 2.96 6.5 19.2 6.4 193.5 180.8 -1170.3 1935.3
2027 18228 3.11 6.7 20.7 6.8 211.6 197.7 -1368.0 2116.1
2028 18720 3.27 6.8 22.3 7.1 231.4 216.1 -1584.2 2313.8
2029 19212 3.43 7.0 24.1 7.5 253.0 236.4 -1820.6 2529.9
2030 19704 3.60 7.2 25.9 7.8 276.6 258.6 -2079.1 2766.3

The following parameters were used to generate the table:

  • Riders per day, operating costs, and initial debt are the numbers published by WSDOT.
  • The number of riders published by the WSDOT assumes that 10% of all drivers will switch to Light Rail even though their own studies show they only expect 0.5% to switch.
  • Ticket price for a one way trip in 2018 is assumed to be $2.00 and increases 5% per year.
  • Operating costs are assumed to increase 5% per year.
  • Interest rate and finance charges to service the bond debt are based on 10% per year.
  • WSDOT numbers show that they plan to pay a finance charge of 14% (116/829.75 million = $945.75 million).
  • The debt service coverage published by the Columbia River Crossing Committee is 15%.
  • The income from tickets does not even cover the interest. So the debt will grow unless it is taken from some other source.

Next: Use your noggin!