Continued: For now, bus, rail fare hike is a necessary evil

High gas prices are doing what environmental concerns could not: Bus and rail ridership is at a 25-year high in the Twin Cities. So it's counterintuitive that the Metropolitan Council would risk those gains by proposing not just one -- but two -- fare increases.

But the same fuel cost pressures that are crowding buses and trains are also working against public transportation. A 65 percent spike in diesel fuel prices has blown a hole in the budget of Regional Transit, which includes Metro Transit, Metro Mobility and suburban lines such as Southwest Transit. The agency faces a $15 million deficit. And that figure may double -- or worse -- in 2010 and 2011.

More revenue from increased ridership helps alleviate the problems. But fare recovery -- the percentage of operating costs paid by riders -- is 30 percent for buses and 40 percent for light-rail. The rest mostly comes from public funding, with the largest percentage, 36 percent, from the Motor Vehicle Sales Tax (MVST).

But here, too, $140-a-barrel oil is a game-changer, as cash-strapped consumers are buying fewer cars. So despite receiving a higher percentage of MVST funding, the actual dollar amount has dipped from $128 million to about $124 million. By 2012, Metro Transit will receive 36 percent of MVST revenue, up from 27.75 percent in 2009. The change will help, but the unpredictability of that revenue stream is an ongoing issue for the Met Council, which sets rates for Regional Transit.

Given the existing budget, it's reasonable and responsible for a publicly funded agency to ask users to shoulder some of its increased costs. The proposed fare hike would cover about $7 million of the shortfall. The Met Council will tap some of its reserves to cover the rest, but it needs to retain some flexibility in its reserve account in case its finances further deteriorate.

The best option for the Met Council is to stop with the first rate hike. Then the Legislature, which made progress on transit issues last session, should come to the rescue. A long-term fix is needed, either by changing the funding formula or with additional revenue from the general fund.

Both of those solutions would be in step with nationwide trends. Since the 2008 energy meltdown began, 48 percent of U.S. bus operations have turned to fare increases, and 43 percent have sought help from state government, according to the American Public Transportation Association.

The Met Council shouldn't visit the Legislature alone. The next transportation funding priority should be helping schools cope with higher busing costs. A Minnesota schools-Met Council partnership should create the kind of bipartisan, urban, suburban, rural consensus that will be needed for action.

The fuel price crisis is unprecedented. The response should be, too.

Recent Editorials stories

Editorial: Stimulus helped state - July 13, 2008

Editorial: Stimulus helped state - A 'rough ride,' but federal money helped cushion the blow. More

Comment on this story | Be the first to comment | Hide reader comments

New ideas for the public sector

THERE'S NEVER BEEN A BETTER TIME to create a more efficient Minnesota. Facing large budget deficits at the state, county and local levels, Minnesotans are seeing with new clarity that the public sector must adapt to new economic realities. Only the smartest, most strategic reinvention will ensure that our tax dollars are spent on the best programs and services. Read more

About Opinion Exchange

Opinion Exchange is produced by the Editorial Department, which is dedicated to hosting the discussion on a range of issues of interest to Star Tribune readers online and in print. In its new format, it's our hope that Opinion Exhange will create a more dynamic dialogue between Star Tribune readers and the Editorial Board. Many individual posts will be written and signed by members of the Editorial Board and will reflect their own opinions. Daily editorials will continue to represent the institutional voice of the newspaper and be researched and written by the Editorial Department, which is independent of the newsroom.

Subscribe to RSS|Learn more about RSS