Deal would give suburban bus operators control over raising fares to cover costs of longer rides.
Republican legislators have dropped their demand for a 25-cent fare increase for Metro Transit riders in exchange for giving suburban bus systems more independence.
Days after calling for the fare hike for Metro Transit, Sen. Joe Gimse on Thursday agreed to allow suburban carriers to raise fares on longer rides without permission from the Metropolitan Council, which oversees Twin Cities transit.
"It gives the suburbs some flexibility," said Gimse, R-Willmar, after the Senate Transportation Committee approved the deal. The House Transportation Committee did the same Wednesday night.
Suburban carriers have complained that under state law the Met Council can restrict their ability to raise fares to cover costs on longer routes.
The new arrangement would allow six suburban carriers to raise fares on routes longer than 15 miles.
"It would give the [bus companies] another option for some revenue," James Clark, a lobbyist for the Suburban Transit Association, told legislators.
But the deal rankled some Republicans who favored increased fares for transit run by the Met Council in Minneapolis, St. Paul and elsewhere to reduce state funding.
"How much does the rest of the state have to continually subsidize?" asked Sen. Mike Parry, R-Waseca.
The proposed 25-cent fare increase would have hit urban areas hardest -- raising fares to $2.50 at rush hour and to $2 other times on Minneapolis and St. Paul buses and the Hiawatha light-rail line. The 25-cent hike also would have applied to the Northstar commuter train. The hike would have affected peak and non-peak riders.
The House version would have begun in July and the Senate version next January.
Gimse and House Transportation Committee Chairman Mike Beard, R-Shakopee, said the higher fare was justified at a time of higher gas prices and was needed to hold down state transit subsidies.
DFL called it a deal-breaker
The decision to back down came amid opposition from DFLers and the Met Council.
They argued that the 25-cent fare hike would break a deal between Gov. Mark Dayton and Republicans that ended last summer's state government shutdown and averted a fare hike this year.
At a hearing late Wednesday night, Beard scolded the Met Council for rejecting a fare hike when "the cost of everything is going up."
But Beard agreed to drop the fare increase as a tradeoff for more independence for suburban transit, whose operations he said were hamstrung by the Met Council.
"The Metropolitan Council is driving this bus, not the operators of the bus company," Beard said. "We can't even change our fares."
Met Council lobbyist Judd Schetnan said Thursday that the agency supported giving the suburban carriers discretion in setting a higher fare for some longer trips. It would be allowed until at least Jan. 1, 2016.
Gimse said the agreement partly satisfied his desire to raise more transit revenue from riders and less from taxpayers.
"I think we're headed in the right direction," he said, but acknowledged that the 25-cent fare increases would have raised more money.
A 25-cent increase -- the same increase as in 2008 -- would have raised about $9 million, Beard said.
Pat Doyle • 612-673-4504