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!