Transit cuts in House and Senate Bills

From Dave Van Hattum, Policy and Advocacy Program Manager

The House and Senate Transportation bills both include substantial cuts to the state general fund contribution to metro area transit. The House bill completely eliminates the general fund contribution, a funding source transit has relied on for decades. A letter from new Met Council Chair Susan Haigh to House Committee Chair Mike Beard spelled out the severe level of transit service cuts and/or fare increases that could result if the House bill becomes law, including:

• 45% cut in regular route service
• 240 daily peak hour bus trips cut
• Reducing Metro Mobility operating hours
• 550 drivers and related staff laid off

Alternatively, to avoid service cuts and job loss, a system wide fare increase up to $4.00 per ride could be implemented to cover the proposed general fund cuts. This dramatic fare hike would result in an estimated 55% reduction in transit ridership.

TLC, along with a broad and growing coalition, will continue to advocate for keeping our transit system whole. Transit provides a critical service for all Minnesotans. It gets those without cars where they need to go, it reduces emissions, it saves families and employers money; and it substantially reduces traffic congestion and the need for expensive highway expansion.

At a recent press conference House Chairman Mike Beard attempted to defend the details of his proposed bill. Many of his comments contradict the facts. Here are some points he made and TLC’s response.

1)      Claim: The Met Council numbers are wrong – the cuts would only be approximately 10% of service.

TLC response. Transit operations rely on three primary sources of revenue: rider fares, the motor vehicle sales tax (MVST), and state general funds. For Representative Beard’s assertions to be true, a large portion of the quarter-cent regional sales tax directed to constructing and operating rail and bus rapid transit would have to be redirected to fill the new operating deficit. And revenue from MVST would have to live up to projections – an outcome that has happened only one year in the past ten.

If the quarter-cent sales tax is redirected, there will be an indefinite pause in moving forward the Southwest, Bottineau, Gateway, Cedar Ave., Red Rock and Rush line transitway projects. In addition, progress on the Central Corridor could be jeopardized because the Federal Transit Administration wants to see a sound local financial plan and is wary of partnering with regions that cut their existing transit system.

As noted by the Association of Minnesota Counties (AMC), the raid of the quarter cent sales tax sets a terrible precedent. All 87 Minnesota counties are against this. And all 27 cities around the state with an existing local option sales tax, put in place for specific local purposes, should fear that the legislature may act at any time to raid those taxes to offset state budget deficits. Five metro county boards voted in 2008 to direct the new sales tax to a very specific purpose – expanding the regional system of light rail, commuter rail and bus rapid transit. CTIB (Counties Transit Improvement Board) administers these funds.

2)      Claim: Buses are preferred over trains because they are more efficient.

TLC response.   Across the nation, light rail transit (LRT) has some of the lowest per rider operating costs – significantly lower than the cost of bus service. The cost per rider of operating Hiawatha LRT is 40% lower than the cost of regular bus service and the numbers are the same in Portland, Denver and other peer regions. This is the case because LRT is designed to serve high capacity corridors where one operator can carry hundreds of riders. Trains also attract more housing and commercial development, increasing the efficiency of the train line far into the future. If efficiency is the metric, we recommend that Rep. Beard review the inefficiency of adding highway lanes to move more people in private vehicles. Currently, transit on I-35W South eliminates the need for two additional highway lanes – a huge financial saving.  

3)      Claim: The high reserve funds maintained by many of the opt-out transit providers are the result of well-run transit service.

TLC response.  Rep. Beard may be confused about what constitutes well run transit service. It’s not about the amount of reserves at the end of the year – it’s about providing lots of transit rides per dollar spent. In this regard, Metro Transit, not the suburban providers (opt-outs), rank the highest; and the region as a whole compare favorably with peers. The Legislative Auditor, in a recent report, also recommends that the opt-outs substantially reduce their reserve funds.

When private companies have a high reserve at the end of the year it can mean they’ve been quite profitable and presumably well run. This performance measure simply doesn’t apply to providing public services.

4)       Claim: State owned roads will see a 5 to 6% increase in funding over the next biennium.

Why are cuts to highway expansion projects off the table, especially given that the Twin Cities has a smaller than average transit system and larger than average metro highway system? How can Minnesota justify slashing bus service, eliminating access to work, school, the doctor and other destinations, while continuing to grow the highway system?

State law allows the MVST dollars to be shared between transit and road projects. A small shift of MVST revenues from roads to transit might preclude a few new road expansion projects over the next two years, but would make a huge difference for those who rely on buses and trains– likely a growing number with gas prices heading toward $4.00 per gallon.

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