As economy tightens, maintaining existing bus and rail service will be tough. Another fare increase is possible.
Even as the appetite for public transit grows in the metro area, the financial picture is growing increasingly grim because of the deteriorating economy, the chairman of the Metropolitan Council said in his annual State of the Region speech on Monday.
With huge declines in car sales that generate revenue from Minnesota's motor vehicle sales tax, it could invite difficult decisions that could include another fare increase, Peter Bell told about 200 people gathered at Maplewood Community Center. The vehicle sales tax supplies about 38 percent of the money the Met Council needs to operate buses and trains.
Bell said he expected the problem to worsen by the time the state releases its updated budget forecast this month. He said the shortfall -- which one county commissioner called a "serious problem" -- would extend to suburban bus companies.
"The council is not eager to raise bus fares or reduce service," Bell said, despite a projected shortfall of $45 million through this year. In October, the council raised fares by 25 cents to earn $7 million annually.
But because many people aren't buying new cars, the Met Council is receiving far less revenue from motor vehicle sales taxes; in the current fiscal year those receipts are down $12 million from five years ago, and the council forecasts a budget shortfall of $45 million over the next two years.
Bell said in a later interview Monday that "given the profile of our riders" he hoped to avoid another fare increase. About a third of all passengers are low income, he said, and many don't own a car. The increase that took effect Oct. 1 pushed the cost of non-rush-hour rides from $1.50 to $1.75.
"I want to build our system," he said. "We've got a lot of momentum going, both on the ridership front and building out our transitways."
Metro Transit ridership last year reached nearly 82 million. The Hiawatha light-rail line, which opened in June 2004, provided about 10 million of those rides, Bell said. The council wants to increase ridership 50 percent by 2020 and double it by 2030 to slow traffic congestion.
Bell said he'd be inclined to spend any federal transit stimulus money to operate existing public transit rather than use it to expand service. But it's no sure thing that the federal stimulus money will be made available for the transit operating budget.
He also said that the Met Council is trying to close its funding gap with fuel savings, by buying "green" buses that deliver 22 percent better fuel mileage, tapping the council's reserve fund, and considering temporarily shifting some money from a grant program that helps cities build neighborhoods linking jobs, housing and services.
"It's a serious problem, no question about it," said Peter McLaughlin, a Hennepin County commissioner who chairs a metro county transit board that oversees money raised through a new quarter-cent sales tax in five counties. A one-time infusion of $30.8 million from the tax will help the Met Council pay for transit operating costs this year. Also, the transit board will spend about $15 million to help pay operating costs for the Northstar light-rail line and the Interstate 35W and Cedar Avenue busways, all scheduled to begin service this year.
The Met Council "needs to lead" and persuade the Legislature to find a solution for its funding problems, McLaughlin said. And he said that the Met Council shouldn't view the transit sales tax -- Hennepin, Ramsey, Washington, Dakota and Anoka counties raise that money to develop transit lines -- as a long-term source of operating money.
"The line we want to draw is between the transitways and the garden-variety bus services," he said.
Gary Kriesel, a Washington County commissioner, said after Bell's speech that he hoped the Met Council would aggressively pursue the creation of more transit taxing districts, which help fund public transit through property tax assessments. Both he and Lisa Weik, another Washington County commissioner, said the Met Council is having to rely on too many complicated funding sources.
"It's too much of a shell game where it's not transparent to the public," Weik said.
Also on Monday, the Met Council released its annual survey, which showed that transportation remains the top concern among residents in the seven-county metro area for the seventh time in eight years. Crime ranked second, driven by concern over drugs, gang activity and youth crimes, and guns. The economy ranked third.
The survey also showed that residents value parks and trails as the region's most attractive feature, followed by the natural environment. Sixty-three percent of respondents thought growth in the Twin Cities region was "about right," but 31 percent don't and 6 percent say it's too slow.
Findings from the survey of 1,500 respondents are available at www.tinyurl.com/caskak.
Kevin Giles • 612-673-4432