Apr 11, 2022 - News

Cost estimates for transit project touted by Buttigieg soar

Austin's red line metrorail.
Austin MetroRail train stopped at a light rail station in Austin. Photo: Peter Tsai/Getty

Austin's marquee public transit project — and one the U.S. transportation secretary has touted as a model for the rest of the country — just got a lot pricier.

Driving the news: Cost estimates for two light rail lines and a subway tunnel, approved by voters in 2020, have increased from $5.8 billion to $10.3 billion, per a Project Connect briefing memo out late last week.

  • Transit planners have a "working expectation" of no new tax increases, Dave Couch, program officer with Project Connect wrote in the memo addressed to the Austin City Council and the board of transportation agency Cap Metro.
  • But they don't appear to be off the table.

The big picture: In a visit to Austin last month, U.S. Transportation Secretary Pete Buttigieg touted the plan as a lodestar for other transportation projects.

  • Buttigieg, in Austin for SXSW, called Project Connect an "ambitious vision."
  • "I saw how an entire community stood up and said, 'Yes, we want this kind of mobility, and we want to put skin in the game, and we're going to do it in a way that connects, not divides, and lifts everybody up and doesn't leave anybody behind,'" he said. "I think that can be a model for so many places in the U.S."

Catch up quick: A major transportation expansion, Project Connect includes the Orange Line, which will link North and South Austin and the Blue Line, which will run from Austin-Bergstrom International Airport to downtown. A commuter rail line and additional bus service are also included in the plan.

Zoom in: The reasons for the spiraling costs come down to:

  • Soaring real estate expenses, with budget estimates for right-of-way for the two light rail lines jumping from $250 million to $1.19 billion.
  • Spiking inflation, driving up construction materials.
  • And changes in the project's scope.

Estimates for a downtown subway tunnel, for example, have spiraled from $2 billion to $4.1 billion, as the the length has more than doubled due to engineering and other factors, such as the incline of the hill heading into South Austin.

Between the lines: Mayor Steve Adler's friendship with Buttigieg — a former fellow mayor for whom Adler stumped during his 2020 presidential run — could pay off if Austin tries to pull down more federal dollars.

  • Planners are "cautiously optimistic" that the Biden administration infrastructure bill will "result in a larger federal contribution … than originally assumed," Couch wrote in his April 7 memo.

Flashback: After a couple of failed attempts at getting voter buy-in for massive transportation projects, Austin transit advocates broke through in November 2020 — when motivated progressive Austin voters showed up in droves to vote Donald Trump out of office — to approve a property tax hike for the Project Connect transit plan.

Zoom out: The revised cost estimates come amid some pushback to regional transit planning.

  • Voters in the politically purple suburb Leander, for example, will decide in May whether to halt a 1% sales tax that funds Cap Metro — possibly redirecting at least $164 million over the next decade to the city's own general fund.

The bottom line: Given the trajectory of property values and uncertainty over inflation and the supply chain, don't be shocked if the bill climbs yet higher when the project ultimately gets built.

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