Tax hike urged for Southwest Corridor

  • Article by: PAT DOYLE , Star Tribune
  • Updated: January 25, 2014 - 6:36 AM

Southwest Corridor supporters propose a metro boost as they scramble for local funding to qualify for federal help.

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With urgency growing to fund the Southwest light-rail line, leading DFLers are proposing once again to hike the metro sales tax for transit.

Photo: Renee Jones Schneider, Star Tribune

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Facing growing urgency to secure local funding for the Southwest Corridor light-rail project, leading DFLers are proposing once again to hike the metro sales tax for transit.

The move comes as supporters of the Twin Cities’ largest transit project explore options for funding after Gov. Mark Dayton rejected borrowing money to pay for the state’s share of the project.

The Metropolitan Council, the agency overseeing the project, needs to prove by fall that it has commitments for enough local and state funding to qualify for matching federal funds and keep the project on track.

“They have to start getting some stuff together pretty soon,” said Rep. Frank Hornstein, DFL-Minneapolis, chairman of the House Transportation Finance Committee.

Key decisions on the $1.5 billion project were delayed for months while supporters sought to mollify Minneapolis residents who objected to it running through their neighborhood near existing freight trains and questioned the impact of proposed light-rail tunnels on nearby lakes.

The project is expected to pick up steam again next week with the release of long-awaited studies on those two controversies.

The state was supposed to pay 10 percent of the cost of the Southwest line, which would run from Eden Prairie to Minneapolis. It has approved only $44 million of the expected $155 million.

Dayton this month rejected a request by the Met Council to borrow money to provide another $81 million for it, saying Southwest would have deprived similar funding for other state public works projects. He said he prefers other ways to fund Southwest.

Hornstein and Sen. Scott Dibble, DFL-Minneapolis, chair of the Senate transportation committee, say they will move to increase the quarter-cent metro transit sales tax to three quarters of a cent to pay for Southwest and other Twin Cities transit projects. A similar move passed the Senate last year but failed to advance.

A half-cent increase in the tax would raise another $200 million a year for transit in five metro counties.

Backup plan

Supporters aren’t confident of passing a transit tax hike in an election year. Recent efforts to pair it with increasing the gas tax for road improvements have failed.

So Southwest supporters are considering other ways to fund construction. Under one plan, the Met Council would issue its own bonds to borrow the necessary money — maybe in partnership with Hennepin County — and pay off the loan using future state motor vehicle sales tax revenue dedicated for transit. That option might cover the funding gap for building the transit line, but not running it.

“The most successful strategy would be to have the transit sales tax passed, but this is kind of a backup in case that doesn’t happen,” said Met Council Chairwoman Susan Haigh.

In any case, more local or state money “would have to be in place in fall in order for our proposal to be competitive” with other light-rail projects seeking federal funding, Hornstein said.

Southwest is among seven projects in the nation at the same stage of development that have gotten early green lights from the Federal Transit Administration (FTA) and are awaiting final approval. The agency’s support is crucial because Southwest is counting on the federal government to pay half of the project’s cost.

The Met Council needs to give the FTA commitments of local and state funding by this fall so Southwest can become eligible for President Obama’s next budget and for federal funding in 2016. The line is scheduled to open in 2018.

Project foes

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