Like many agencies nationwide that are balancing transit operations and mega-project capital expansions, Sound Transit is facing rapidly escalating costs in nearly every area of its work.
Capital and operating costs have risen significantly since voters approved the ST3 Plan in 2016, and they’re continuing to escalate faster than contemplated 10 or even five years ago. If the agency does nothing to counter these rising costs, as well as lower revenue projections, completing Sound Transit’s expansion program will become unaffordable.
This is a long-term challenge projected to begin the 2030s, and Sound Transit’s staff and Board are taking steps to proactively solve for it.
Today the agency remains financially sound, with more than $8 billion in cash and investments and exemplary credit ratings that benefit regional taxpayers. Agency leaders are well-positioned to develop and implement solutions that will affordably deliver the benefits of the ST3 program and set us up for success in the decades ahead.
What does "affordable" mean?
Two factors determine whether Sound Transit’s program is projected to be “affordable”: the agency’s ability to take out loans and bonds and its ability to pay them back.
Both factors have defined limits that Sound Transit must adhere to.
The first is referred to as debt capacity, All Washington government entities are required by state law to stay below their debt limits. (Specifically, Sound Transit’s debt cannot exceed 1.5% of the assessed valuation of real property located within the regional transit authority district.)
The second is debt service coverage. This is the ratio of the agency’s total revenue, minus operating costs, divided by debt service. Sound Transit Board policy requires the agency to maintain a specific threshold (it may not fall below 1.5 times its total debt service in any given year, or 2.0 times on average during the plan period.)
All transit agencies, especially those with major expansion programs that span decades, are constantly tracking and adjusting to ensure future affordability. Sound Transit models this through its Long-Range Financial Plan, which projects spending and revenue through 2046 (the life of the ST3 plan).
If projected debt capacity and net debt service coverage remain within prescribed limits, Sound Transit’s plan is considered affordable. If models forecast that the plan will become unaffordable at a point in the future, Sound Transit takes preventative action, as it’s doing now.
The Enterprise Initiative
The agency’s Fall 2025 Long-Range Financial Plan estimated an additional $34.5 billion needed to fully fund the ST3 program through 2046.
This isn’t the first time Sound Transit has faced program affordability challenges, and the staff and Board have a strong track record of successfully solving for them. Now agency leaders are bringing new tools and perspectives to the table to address the problem.
In May 2025, the agency launched the “Enterprise Initiative,” a comprehensive effort aimed at delivering the maximum benefits of ST3 within available financial resources. This work includes analyzing how the region has changed since 2016 and factors in new conditions that have emerged since 2021.
When Sound Transit solved for affordability challenges in the past, it turned almost exclusively to the blunt instruments of capital project scope reductions and schedule delays.
The Enterprise Initiative is different. Through this broader, more holistic approach, staff and Board members are considering all agency costs (including system and project planning, capital construction, service operations, and system maintenance), revenue sources, and financial policies — and the relationships between them.
Taking this agencywide perspective with the support and guidance of the Board will help set Sound Transit on a new and sustainable path going forward.
What to expect in 2026
In 2025, Enterprise Initiative work focused on setting a baseline of the known challenges the agency is facing. Staff established four discrete Enterprise Initiative workstreams (planning and policy, service delivery, capital delivery, and finance) and began exploring cost-saving opportunities and trade-offs for each. Staff also worked closely with Board members to define the challenge ahead and develop guiding principles for future decision-making.
In 2026, the focus will sharpen. Staff and Board members will be working together to:
- Identify possible changes to policies and planning assumptions. This includes financial policies that can increase agency financial capacity, project delivery policies that could save time and open new lines and stations faster, and program policies to boost transit-oriented development, passenger access improvements, and sustainability.
- Confirm potential resiliency investments and other opportunities that help deliver reliable, cost-effective service. These could include predictive maintenance technologies that anticipate and address issues before they impact service, integrating real-time monitoring systems for rapid response, and optimizing asset management strategies to improve equipment lifespan.
- Incorporate capital cost savings opportunities in support of a modified system expansion program. This work includes project-level strategies (such as optimizing Link station designs) and programmatic ones that could support and benefit the entire portfolio of projects (for example, reducing procurement time). Given the scale of the cost pressures on Sound Transit’s capital program, staff and Board members will also need to look at scope changes and project phasing.
- Recommend enhancements to agency financial capacity. These opportunities could include new partnerships, updated grant strategies, and other approaches within the Board’s authority to increase Sound Transit’s financial capacity.
You can also expect to hear more from Sound Transit as Enterprise Initiative work ramps up in 2026. In addition to more frequent updates on progress, staff will also be conducting equitable public engagement throughout the region to gather feedback on your priorities and inform Board decision-making.
The Enterprise Initiative will ultimately culminate in updates to three important agency plans:
- An amended ST3 System Plan. Voters approved this plan in 2016, and the Sound Transit Board amended it to realign the capital program in 2021.
- A new Regional Transit Long-Range Plan, which represents the agency’s goals, policies, and strategies to guide long-term development of the high-capacity transit system. The most recent plan was adopted in 2014.
- An affordable Long-Range Financial Plan. The Long-Range Financial Plan is a model, and Sound Transit’s obligation is to have that model balance out through 2046.
Throughout 2026, staff will engage the Board for guidance, discussion, and decisions. Following these actions, staff will seek final Board approval of plans that allow the agency to effectively operate, maintain, and expand a resilient regional transit system that meets the needs of passengers, and the cities and communities Sound Transit serves.
Questions about how Enterprise Initiative work is taking shape? Contact EnterpriseInitiative@SoundTransit.org.