By Sound Transit's accounting, light rail costs (measured in 1995 dollars) have increased from the $1,670 million cited at the time of the election to $1,924 million recently. The $1,924 million, however, is an understatement as it does not include the cost of acquiring the downtown transit tunnel from King County, funding for the Rainier Valley Community Investment Fund, or the full cost of Sound Transit's mitigation agreement with the University of Washington. In addition, because of the manner in which Sound Transit has adjusted costs to 1995 dollars, the $1,924 million figure does not capture the effects of "real" construction cost increases (that is, construction cost increases in excess of the general rate of inflation).

The 1996 plan assumed that Sound Transit would pay nothing to acquire the Downtown Seattle Transit Tunnel.

On April 25, Sound Transit, King County and the City of Seattle announced an agreement that "will allow for the transfer of the Downtown Seattle Transit Tunnel to Sound Transit for light rail use in return for cash and property worth the depreciated value of the tunnel," according to a King County statement. King County is to "receive full value of the tunnel valued at $195.6 million." Some of this entails the value of the existing Convention Place Station, which the County will retain. Sound Transit will assume responsibility for service on $130 million of King County debt. In addition, it must obtain for the county ownership of certain state-owned property at the Convention Place Station, or else pay the County $14.1 million. The cost of these two obligations in 1995 dollars is $113 million. A number of other contingencies are built into the contract that might result in further, relatively small, costs to Sound Transit.

Sound Transit has made a commitment to invest $50 million to mitigate the adverse effects of light rail on the residents of the Rainier Valley. (The $50 million commitment is in year-of-expenditure dollars; the cost of the commitment is estimated to be $38 million in 1995 dollars.) Initially, the Rainier Valley Community Investment Fund was to be part of the light rail project. In November 1999, however, the Board decided that the fund would be treated in Sound Transit's books as a separate project.

Although the $1,924 million light rail budget does include some funds to mitigate the impact on the University of Washington, an analysis by Sound Transit staff indicates that fulfilling the mitigation commitments will cost between $6.8 million and $11.24 million more than the budgeted amount. Moreover mitigation costs could end up even higher than Sound Transit estimates because the UW must approve detailed construction and mitigation plans provided by the agency.

An unknown at this time is how much Sound Transit will have to pay for UW property necessary to build two light-rail tunnel stations on the university's campus.

In the cost projections prepared before the 1996 election, Sound Transit assumed that inflation rates in the costs of construction and right-of-way acquisition would be equal to the general rate of inflation as measured by the consumer price index. Sound Transit now forecasts the rates of construction and right-of-way inflation will exceed the inflation in consumer prices over the period of the project.

Sound Transit estimates the cost of the project in nominal or year of expenditure dollars to be $2,481 million and in constant 1995 dollars to be $1,924 million. Of the $557 million difference between these two figures, roughly $490 million is due to the general inflation as measured by the CPI and $67 million is due to the excess of construction and right-of-way inflation over general inflation. Thus the increase in cost from $1,670 million to $1,924 million in 1995 dollars does not include $67 million in "real" construction and right-of-way cost increases which were not anticipated at the time of the 1996 election.