Sound Transit is leaving this year's 60-day state legislative session in Olympia with some bruises, looking worse for wear.
Hoping to court lawmakers into unlocking additional tools that could help the regional transit agency deal with a projected $34.5 billion shortfall through 2046, it walked away with one major success, and one big rejection – along with a significant unexpected setback.
This year is a pivotal one for Sound Transit expansion plans, as the agency updates its array of long-range planning documents, some for the first time in over a decade. Decisions made this year have the potential to be locked in as those plans get codified, even if adjustments get made in future years that could improve the outlook. State legislators have set the stage for the future of regional transit in Puget Sound.
Let's start with the success: the legislature approved Senate Bill 6309, which gives Sound Transit long overdue authority when it comes to local permitting. Despite its rail and bus projects being declared an essential public facility under state law, the agency has still needed to abide by local development regulations that govern things like height and setbacks, or go through a lengthy process to get a variance from those regulations.
This new law, if signed by Governor Bob Ferguson, will allow Sound Transit to exceed those regulations as long as they abide by them to the "extent practicable" when building a regional transit system.
Another major reform included in the package is the ability for Sound Transit to start applying for land use and construction permits for properties that the agency plans to acquire but yet hasn't, as long as it notifies the property owner.
Earlier this year, Sound Transit told lawmakers that it expected these reforms to be able to save up to nine months on some of its largest light rail projects.
"The targeted reforms in that legislation will enable the agency to carry out necessary project steps like acquiring property and applying for various permits more concurrently than sequentially, as is now the case, and that will ultimately allow us to build faster and thereby save money," Sound Transit CEO Dow Constantine told the agency board's finance committee Thursday. "So I'm really pleased by this outcome."
But a bid to get lawmakers to allow Sound Transit to tap into new federal authority to issue 75-year bonds – term lengths nearly twice what's currently allowed under state law – failed.
Sound Transit leaders pitches this financial tool as a key component for getting through a period of intense spending in the early 2030s, with light rail lines to West Seattle, Tacoma, Everett, and Ballard all under construction. The agency said would have been utilized longer bonds on some of the longest-lasting assets included in its system expansion plans, including a second light rail tunnel under downtown Seattle.
But legislators in the Washington House weren't convinced, with the bill stalling there after passing the state Senate. It careened to a dead stop in the House transportation committee, with committee chair Jake Fey (D-27th, Tacoma) not swayed by lobbying from various Sound Transit board members or their staff.
Despite a creative play by Senate transportation chair Marko Liias (D-21st, Edmonds) to add authorization for 75-year bonds to another bill advancing through his committee, that provision ultimately didn't even make it back to the House, getting pulled out on the Senate floor.
According to Sound Transit's newly released financial strategy plan, the agency was actually looking at 55-year bonds, even as the full 75-year number likely gave legislators heartburn, with concerns raised around future generations paying off debt on assets that had long since been constructed. (Apparently that fate is only reserved for sports stadiums.)
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And then there's the ugly – a significant hit to the agency's long term revenue forecast expected in future years due to a clawback of sales tax authority included in Senate Bill 6346, the so-called "millionaires' tax."
A major priority for Democrats in both the House and Senate this session, the new 9.9% tax on household incomes over $1 million is expected to be a cornerstone of future tax reform in Washington, opening the door to more progressive forms of taxation. It also included a number of other tweaks to state tax policy, notably the repeal of a recently enacted sales tax on services that the legislature approved in 2025.
Those revenues have also started flowing to local governments including Sound Transit, which collects a 1.4% sales tax across its three-county taxing district. The impact of that repeal, which takes effect in 2029, is still coming into view, with transit agencies like King County Metro and local city governments still grappling with the change.
Just last month, Alex Krieg, Sound Transit's Deputy Executive Director for Enterprise Planning, told the board that the legislature's expansion of the scope of items covered by sales tax had added $2 billion to the agency's long-range financial plan. That number represents a full 50% of the gains that the agency has been able to make since last summer's announcement of its financial shortfall.
If that sales tax authority goes away in 2029, along with additional exemptions for items like hygiene products and diapers, the bulk of that $2 billion is likely to be taken back off the board, sending Sound Transit searching for additional revenue – or project cuts.
Governor Ferguson, who has been intensely involved in the debate over the millionaires' tax, is expected to sign the bill in the coming days. So far, Sound Transit isn't sharing what it expects the actual hit to its finances to be.
"Sound Transit is tracking SB 6346 and had estimated that the original legislation could improve the long-term revenue outlook for the agency," Sound Transit spokesperson Amy Enbysk told The Urbanist. "Given the previous legislation went into effect just recently, we have too little data at this time to estimate the impact on our most recent monthly collections. We are in the process of updating our long-term tax revenue forecast and will be assessing that against any developments of SB 6346."
The agency is making significant progress on getting costs down on its projects, recently revealing changes that will bring the West Seattle Link Extension as close as $700 million to the cost currently baked into the agency's financial plan. The hope was that financial tools like more flexible bonding (or improved revenue forecasts) could help get all the way there.
In the wake of the gavel banging an end to the 2026 session, Sound Transit is facing its financial woes with a new curveball rather than unabashed aid from state lawmakers.
Ryan Packer
Ryan Packer
