Lower fares bring more riders to the 40-mile northern commuter line, but taxpayers subsidize much of the cost.
Elise Mead is part of a new generation of transit riders who will help make or break the struggling Northstar commuter line.
“It saves me a ton of money,” Mead, 22, of Andover, said one afternoon last week as she rode the 3:57 from downtown Minneapolis.
Yet one person’s savings can be another’s expense.
Slashing fares encouraged more people to ride the Northstar this year, but the cuts nearly wiped out the revenue gains from the extra riders.
As a result, Northstar’s government subsidies remain among the highest in the nation, paying for roughly 83 percent of the commuter line’s cost.
“It’s a little rich,” said Steven Polzin, a director at the Center for Urban Transportation Research at the University of South Florida.
The Northstar’s problems are largely rooted in its 40-mile route. The original plan was for it to run from downtown Minneapolis into St. Cloud, but lack of federal money forced it to end about 25 miles away in the much smaller community of Big Lake.
“It makes a lot more sense for it to terminate in a population center,” said St. Cloud Mayor Dave Kleis, who promoted that plan when he was in the Legislature. “It should have happened.”
Kleis said Minnesota’s congressional delegation has supported relaxing federal requirements for funding the extension.
But the odds of that happening are “very remote … in the near term,” said Brian Lamb, general manager of Metro Transit, which operates Northstar. “Everyone is focused on trying to make sure that the Big Lake-to-Minneapolis operation continues to show the kind of growth that we are seeing.”
With ridership flagging, Northstar cut fares by $1 in summer 2012, shaving as much as 25 percent off ticket costs in an effort to stimulate interest.
Metro Transit says the discounts are a major reason Northstar ridership is projected to increase by 12 percent this year, from 700,276 to an estimated 784,000.
More riders and lower expenses offset the fare cut. Total fare revenues rose from $2.56 million to $2.59 million. The average cost per passenger dropped from $22.91 to $19.81, with adult passengers paying fares of $2.50 to $6.
But they’re picking up only 16.7 percent of the cost to operate the commuter train — about the same as last year — leaving taxes to subsidize the rest. Even in the heavily subsidized world of public transit, Northstar is costly.
“It is among the higher-cost systems,” Polzin said. “That’s not uncommon to the newer systems.”
The percent of costs paid by passenger fares was lower at Northstar than at 19 of 24 commuter rail lines in 2012, according to the National Transit Database, which compiles statistics for the federal government.
The commuter lines that can rely more on fares for revenue tend to be in larger, more established markets. Metra Rail, which runs from downtown Chicago to far-flung suburbs, carried 74,246,584 passengers in 2012. Its ticket prices were only slightly higher than those on Northstar, but revenue from fares was enough to recover 48 percent of its costs.
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