At least for now, a plan to move new transit money to existing bus operations is out of the transportation bill.
Accused of raiding local transit money, a Republican-led House committee Wednesday dropped a provision from a major transportation bill that would have shifted money from new rail projects to existing bus operations.
The decision clears the way for the spending bill to reach the House floor next week -- where the issue could surface again.
DFLers had lambasted the diversion of sales tax money that five Twin Cities counties have collected to expand metro mass transit.
Rep. Mindy Greiling, DFL-Roseville, said the provision was "amazingly insulting to our local taxpayers." Rep. Frank Hornstein, DFL-Minneapolis, added, "This is raiding money that the five counties have raised," and said it set a precedent for the state to tap other local tax money to shore up its budget.
But Rep. Michael Beard, R-Shakopee, author of the transportation bill, defended the provision as an unfortunate, but necessary, strategy to deal with the state budget deficit.
"That is an unusual move. I'll grant you that," he told DFLers at a House Ways and Means Committee meeting. "We're saying, 'Please don't invest in any new stuff right now.'"
The provision would have required the Metropolitan Council to spend $69 million of the quarter-cent sales tax revenue in the next two years on existing conventional bus operations, not on light-rail, commuter rail or bus rapid transit.
It also would have prohibited spending the $69 million on planning and development of the Southwest Corridor light-rail project from Minneapolis to Eden Prairie and on new bus rapid transit lines.
By requiring the $69 million to be used to operate the existing metro bus system, the provision would have replaced money that the GOP wants to cut from the general fund for that purpose.
Rep. Mary Liz Holberg, R-Lakeville, chair of the committee, denied that diverting the sales tax money would set a precedent. She noted that the Legislature previously required spending a smaller portion of the transit tax money on existing operations.
The decision to drop the provision from the bill came after Rep. Ann Lenczewski, DFL-Bloomington, said it needed to be heard by another committee because of its implications for tax policy. After dropping the provision, the Ways and Means Committee moved the bill to the full House for possible consideration next week.
"It's good that they recognized what they were pursuing ... was bad policy," said Hennepin County Commissioner Peter McLaughlin, who chairs an agency that oversees distribution of the transit tax money.
But dropping the provision also removes the $69 million from Met Council spending, putting more pressure on other revenue.
Beard said using the money to fund existing bus operations made sense at a time when the state is facing a projected $5 billion budget deficit.
Pat Doyle • 612-673-4504