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House Cuts State Funding for Transit, Grabs Local Sales Tax to Fill Gap

03/23/2011

Update--March 23, 2011, 4:14 pm. The House Ways and Means Committee today deleted the CTIB ($69m biennial) shift to transit operating.  The House Transportation Finance bill now cuts ALL general fund dollars to metro area transit (i.e. $65 million per year or approximately 15% of the operating budget.) If enacted, this would lead to a service cuts of at least 15% and a fare increase of at least $.25. As noted, the Senate will consider funding bills that would lead to a $.50 fare increase.

Testimony focuses on jobs, students, seniors, disabled, and business
Senate Bill Hearings Thursday, March 24, 1 pm, Room 123  

Saint Paul, MN (March 23, 2011)—Nearly three hours of testimony before House transportation committee Monday indicated the breadth of support for maintaining existing transit service and holding firm to the promise of new transitways. Nontheless, the House committee voted to cut the general fund contribution to metro area transit by $80 million over the biennium and backfill with $69 million from a regional ¼ cent sales tax for transitway development and with approximately $9 million from the Metropolitan Council’s Livable Communities Fund.

If passed into law, these moves would halt transitways (e.g., the Southwest, Bottineau, Cedar Avenue, Gateway, and Rush Line). The affect on the Central Corridor is unclear. Given anticipated shortfalls in another primary source of transit funding—the Motor Vehicle Sales Tax—and rising fuel prices, there likely would be fare increases and service cuts to come. 

The Senate bill, to be heard Thursday, would cut $32 million over the biennium to metro area transit and would require that “efficiencies” and a $50-cent fare increase be imposed before other measures were used to fill the gap in funding.

On Monday, testimony came from a wide variety of voices in support of transit. Charlie Zelle, representing the Minneapolis Regional Chamber and the Itasca Group, spoke of corporate site selectors and the factors that determine where businesses locate. “Bold investment in transit attracts business,” Zelle said. “We see transit as critical to retain employees and businesses.”

County commissioners from the metro and across the state denounced the attempt to divert regional sales taxes. A commissioner from Freeborn County said the move “establishes a dangerous precedent.” The Association of Minnesota Counties representative said the House bill addresses the budget challenge by reverting to “short term money grabs from local governments.”

Lisa Weik, Commissioner for Washington County District 5, said that her constituents continue to wait for transit while park and rides overflow. She is particularly concerned about senior mobility. Washington County is one of the five counties that voted to impose the ¼-cent sales tax for transitway development.

Paul Krause, a commissioner from Dakota County, also rejected the idea of taking the revenue from the ¼-cent sales tax, saying “If this isn’t stealing, I don’t know what is.”

Hennepin County Commissioner Peter McLaughlin, who chairs the Counties Transit Improvement Board, which oversees the revenue from the ¼-cent tax, said the House proposals “are the actions of a state that doesn’t believe in its future.” Commissioner McLaughlin presented a list of contractors for Central Corridor and Union Station projects, noting that the payroll for Central Corridor is $380 million.

Ramsey County Commissioner, Jim McDonough, described the broad coalition that supported the vote for the ¼-cent sales tax, saying, “I know I would not have voted for that tax if I thought the legislature would come back and steal $69 million dollars of it.”

Mike Schadauer from Mn/DOT, testifying on behalf of Commissioner Sorel, said that cuts in the general fund and possible shortfalls in revenue from the Motor Vehicle Sales Tax (MVST) are “concerns for transit service across the state” and would lead to cuts in service and job losses. Representatives from the Metropolitan Council testified that cuts to transit would lead to the loss of 99 peak hour buses, at least 234 jobs, and a reduction of 7 million rides per year.

Margaret Donahoe of the Minnesota Transportation Alliance said, “This is about jobs,” noting the hit construction trades have taken in the recession. She said there are other options the committee should explore.

Transit riders from the Metro—many of whom arrived by transit—and from out-state spoke passionately about the place of transit in their lives and the affect of cuts on their communities’ quality of life.

Lisa Black, a disabled woman from New Ulm, Minnesota, described the options and costs of getting to the Committee hearings via public transit. The cheapest option would cost $122 round trip. She was joined in testimony by Gary Ludwig, who runs the regional bus system. Ludwig said legislators could cut funds, but they would end up trading “a $5 fare for a $500 ambulance,” speaking of local residents who use his service to get to medical appointments.

A student from Apple Valley said she relies on Metro Transit to get to her job. Another student, originally from Indiana, said she chose the Twin Cities because of the transit system and said other friends do the same. A long time employee of a Fortune 500 company said that he has seen his company lose prospective employees—when the company was based in Mendota Heights—and attract them because of transit when the company moved to downtown Saint Paul. “We are in a highly competitive field and need to attract top talent,” he said.

“Despite rising gas prices and large pent up demand for expanded transportation choices, the House bill halts progress on transit without exploring other funding options,” said Dave Van Hattum of Transit for Livable Communities

Video from the House Committee Hearings on March 21 can be found on The Uptake. http://theuptake.org/2011/03/22/mn-stealing-local-rail-transit-dollars/ 

 

 

 

 

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