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|
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!