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

Some DFL supporters of the Southwest line say Dayton decided against including it among about $1 billion in proposed public works projects because doing so would have jeopardized all of them.

“Republicans said they wouldn’t vote for the bonding bill if it had Southwest in it,” said Hennepin County Commissioner Peter McLaughlin. “There are times when the Republicans have made voting for light-rail transit almost akin to abortion.”

Dayton spokesman Matt Swenson said the governor didn’t discuss his bonding bill proposals with GOP legislators. He said Dayton excluded Southwest from bonding because its high cost would have aced out other worthwhile projects and because the Met Council can use its own bonding strategy to fill the funding gap. Dayton also has expressed support for raising the metro sales tax for transit.

DFLers need Republican votes to pass a bonding bill. Rep. Mike Beard, R-Shakopee, the lead Republican on the House Transportation Finance Committee, said there probably weren’t enough votes to pass the bonding bill with Southwest in it.

But he said fighting among DFLers may have been another reason Southwest wasn’t included.

“Southwest light rail is in trouble with their own constituency in Minneapolis and St. Louis Park,” Beard said. “They got a mess to clean up there before they go too much further.”

He referred to opposition in St. Louis Park to rerouting freight trains there to make room for the light-rail line in Minneapolis, and opposition in Minneapolis to plans for running the light rail through the Kenilworth recreational corridor. Some Kenilworth residents want the line built elsewhere or hidden near their homes in an expensive tunnel under a channel linking Lake of the Isles and Cedar Lake. The Met Council plan calls for less expensive tunnels on either side of the channel with the light-rail trains rising to cross a bridge over the water.

The city of Minneapolis asked Dayton to delay the project last fall so that its impact on the lakes and options for rerouting freight could be further studied. Earlier studies didn’t find acceptable freight reroutes or adverse impact on the lakes.

Some supporters optimistic

Met Council Member Jennifer Munt, who has defended the current plan, said release of the studies next week might allay the concerns of Minneapolis.

“If we can provide assurances to the city that the current alignment doesn’t harm the lakes and that there was no longer a freight route outside the Twin Cities, then we have to zero in on how we can make this work for them,” Munt said. “There’s hope for keeping this project on track.”

Emerging from a meeting with Dayton, Haigh and key legislators last week on Southwest, Minneapolis Mayor Betsy Hodges said she hasn’t made up her mind on the plan. “I’m waiting to make sure we get the information that’s going to be coming our way,” she said.