Standard and Poor’s revised its outlook on Sound Transit’s outlook from stable to negative. S&P Credit Analyst Chris Morgan said that the change “reflects [S&P’s] view of Sound Transit’s forecast parity-lien debt issuance plans during 2015 and 2016 to support a period of increased capital spending during the next 10 years.”
S&P’s outlook change means that the “credit rating agency took notice of Sound Transit’s mounting debt.” And, “the worries about debt service coverage likely reflect doubts about the agency’s ability to generate enough revenue to pay current and planned debt obligations.”
According to the Washington Policy Center, though S&P’s negative outlook has not impacted Sound Transit’s rating, “the revision could ultimately affect the cost of borrowing to taxpayers in Sound Transit’s tax district.” Sound Transit has grand plans for 2015—particularly asking voters to pass another $15 billion package. However, the transit agency’s negative outlook “brings up serious questions” concerning it’s future plans.
Perhaps Sound Transit is better off working to improve its financial state and delivering on past promises made to voters rather than asking for $15 billion more from taxpayers.
