Sailing in the Sea of Red Ink

Sound Transit is currently $150 BILLION in debt and we’re paying gas taxes for it!

A combination of long-term changes, poor management, and inflationary costs have placed residents of the greater Puget Sound region of Washington State in an extremely difficulty economic problem. Let’s take a look at what those factors have been in a state led by two levels of “leaders” who are the people have elected to take the state into the future; local municipalities and state legislative representatives.

Two larger issues for Washington State Dept. of Transportation’s (WSDOT) cost overruns have been it’s ferry system providing movement on Puget Sound’s waters and its Sound Transit light-rail construction project which has been running in the red since the early 2000s with the passage of tax initiative called Sound Move Plan. Since then, two more initiatives have been passed by the voters, ST2 & ST3, which were supposed to take care of the red ink and provide greater improved capacity of moving people around the region.

While the overall Sound Transit light rail plan, Sound Move, was approved by voters in 1996, construction for the system's first segment in Seattle, Central Link (now the 1 Line), began in November 2003. The first light rail service in the region, Tacoma Link (the T Line), began construction in 2000 and opened in August 2003.

Sound Transit has continuously managed the project in a revenue shortfall condition from its inception, while proposed overall project has offered the paying public a people moving system which will do little to nothing in terms of impacting the growing commuter gridlock on Interstate 5 from both Pierce and Snohomish counties. While much of the scheduled completion of various “connector arms” being built have been consistently years behind schedule the situation has grown worse. For a graphic view of the system’s overall plan, which won’t solve the overall financial or ridership issues, visit this article by the Washington Policy Center’s Transportation Director, Charles Prestrud’s analysis on the details as to why these cost overruns persist and why it won’t create what the taxpayers are currently paying out the nose for, but not getting what was promised.

When it comes to the navigable waters, WSDOT’s ferry system for the Puget Sound is slow to rebound its ridership after COVID, so the number of riders has been slow to come back. At the same time, half of the diesel-powered fleet has been removed from use due to breakdowns and shifting it to an electric fleet. The fleet and the Sound Transit light rail are both dealing with much higher costs to run the remaining fleet of ferry boats, while continuing to build the light-rail system over the past decades. A few of the reasons are the combination of union wages and their overtime costs with a limited crew of ferry employees after firing those employees who refused taking the vaccine.

Prior to COVID, the ferry system was covering about 75% of its costs, but afterwards it has dropped to 50% of its operating costs through fairs. That’s about a $100 million a year which the state legislature has been facing dealing with. An independent Transportation Commission (T.C.), a group of appointed individuals sets the toll rates. The legislature sets their transportation budget and shares it with the T.C. to set fairs appropriately. Last year, the ferry tolls were increased by 30% for users. More recently, the T.C. increased the ferry tolls by 3% for this fall and another 3% for next spring of ’26. It’s also added some smaller fees for credit card use and other related vessel replacement costs for those which have been taken off the fleet.

When it comes to the state’s ferry system on Puget Sound waters for daily commuters dealing with inadequate service due to reduced ferry availability, entrepreneurs have filled the gap by providing faster and more reliable service with alternate service to not only fill the gap, but to do so in a cost competitive manner for those who commute daily from the various locations within the sound.

Another shift in the COVID and post-COVID years which has taken the state ferry system’s “pricing power” away is the telecommuting ability of many employees who live on islands, or used to rely on them for getting to downtown Seattle offices. As a result, office space since COVID subsided has dropped. According to Seattle’s KUOW, an NPR affiliate:

King County Assessor John Wilson's job is to estimate how much buildings are worth, for property tax purposes. Right now, he's going through that valuation process for tax year 2025. You could call what he found this year an economic version of long Covid. He's put out a warning, so that nobody's surprised by how far things have fallen.

Wilson says the rise of remote work has caused the value of office properties to drop across the region. He said offices on the east side of Lake Washington will decrease by an average of 30%. Through the I-90 area, they'll drop 35%.

Nowhere is this trend stronger than in downtown Seattle, specifically the Central Business District, Pioneer Square, and South Lake Union neighborhood, home to Amazon. The value of office towers in those places are dropping 35-40%.

The sound of prices dropping like overripe plums from a tree is giving office tenants the edge in negotiations when their leases come up for renewal.

Add to the problem the increase in homeless people in the downtown business neighborhoods, and you find from a simple AI search that this circumstance is adding to the problem Sound Transit has encountered regarding the purpose of a system to get workers into the business hub of the Puget Sound reveals:

“The homeless crisis has negatively impacted businesses in Seattle by reducing foot traffic, driving away tourism, increasing crime and vandalism, and contributing to high-profile store closures

. Many businesses, particularly in the downtown core, have been forced to close or consider leaving due to safety concerns and a perception of urban decay.

Reduced foot traffic and tourism

Visible homelessness, often accompanied by issues of public drug use and sanitation, has made many residents and tourists feel unsafe, leading them to avoid areas like downtown.

• An investment manager for a Seattle firm described walking downtown as "embarrassing" and "apocalyptic," noting that commuters have to navigate human waste, trash, and needles.

• Business leaders worry that the city's image is driving tourists away, potentially jeopardizing hundreds of millions in tourism revenue.

• As a result, retail sales and foot traffic have stalled dramatically in many commercial districts.

Increased crime and vandalism

Homelessness is frequently cited as a contributing factor to increased property crime, vandalism, and safety issues that directly affect businesses.

• In Lake City, business owners reported an overall "degradation to our community's public safety" stemming from issues of homelessness, drug addiction, and crime.

• The high frequency of crime and property damage has made it difficult for property owners to lease or sell their spaces. One Seattle landlord reported spending over $180,000 on repairs after repeated vandalism and break-ins at a former Bartell Drugs location.

• For some business owners, particularly small business owners, the costs and risks have become too high, forcing them to consider closing.

High-profile business closures and exits

In recent years, a number of well-known retailers and chains have shut down locations in downtown Seattle, citing issues related to crime and homelessness.

• Recent closures: Lululemon, The North Face, PCC Community Markets, and Fox's Seattle jeweler are among the businesses that have exited the downtown area.

• Goodwill: In 2024, Evergreen Goodwill announced the closure of two Seattle stores, citing "a troubling rise in property damage, break-ins, and safety concerns".

• Fred Meyer: A store in Lake City announced its closure in 2025, with the company citing crime and theft as primary reasons.

• Starbucks: The chain closed a downtown location near Pike Place Market in 2024, citing safety concerns.

• The Cheesecake Factory: A Reddit post indicates that the Cheesecake Factory downtown location was slated to close in May 2025.

Pressure on the commercial real estate market

The exodus of businesses and a perceived unsafe environment has sent the commercial real estate market into decline in certain parts of the city.

• The commercial real estate market in downtown Seattle is "imploding" as properties sell at steep discounts due to a lack of foot traffic.

• Reports in The Seattle Times have noted astonishingly low prices for downtown commercial buildings, which have sat empty.

• The downturn also affects the residential market. Some reports indicate that downtown home prices have become cheaper than the citywide average for the first time in nearly a decade.

Business and government response

In response to business concerns, city and business leaders have taken action to address the crisis, though results have varied.

• Downtown Ambassadors: Programs run by organizations like the Downtown Seattle Association (DSA) deploy ambassadors to help clean up graffiti, check on unhoused individuals, and serve as a safe resource for businesses.

• Strategic initiatives: The DSA and other business groups have collaborated with city leadership and the King County Regional Homelessness Authority (KCRHA) on initiatives like Partnership for Zero, a data-driven strategy to move unsheltered people downtown into stable housing.

• Housing investment: The City of Seattle and King County have allocated significant funding to address the crisis. Seattle's 2024 homelessness investment was $165.9 million, with a focus on providing housing, shelter, and services.

• Public perception: While some voters reported an improvement in quality of life in 2024, the Seattle Metropolitan Chamber of Commerce found that public safety—especially open-air drug use—remains a major concern hurting businesses.”

Now, with the news out just today, a court has ruled that the tariffs implemented by Pres. Trump are illegal, revenue generated by them is in question. Does that matter to Washington State? Probably not. When it comes to gaining from that revenue generation it has already been producing!

I’m certain that those in this state who’ve elected Gov. Ferguson to lead us, will celebrate this news. However, he has made it clear that he won’t cooperate with the federal administration, for Washington is a sanctuary state and is facing a loss of federal funds for refusing to do so.

So, Washington is now facing the specter of being in a “rock and a hard place” with the financial pressure increasing, leaving its tax payers not only paying the second highest gasoline tax in the nation, along with increasing property taxes, but a possible economic collapse which will make things even worse! It’s nice to know that we’ve got “leaders” – if creating this outlook is what one can call them – who are looking out for the welfare and prosperity of those who put them into office, as they are all responsible for the fine mess they’ve put us into. The question is, when will the day of reckoning going to arrive?

Unfortunately, they don’t view accountability as important, but if the voters reach a point of rebellion against those who are currently sitting in positions of power, it may get nasty, and they’ll finally be voted out to have real adults to replace them!

Happy Labor Day weekend!