My view: Funding for suburbs' transit is inequitable

A recent story in the Star Tribune reported that some suburban transit providers fear that the Met Council and others are trying to deny them a portion of their regional transit funding. What lawmakers like me and the Met Council actually are doing is trying to ensure that regional transit services are delivered efficiently and equitably throughout the entire metro area.

Regional transit funding is a complicated story, but here are the essential facts.

For about three decades, metro-area residents living within the transit taxing district -- the area served by transit -- paid local property taxes to help fund the transit services they received.

In 1984, the Legislature allowed communities to opt out of Metro Transit service if they felt they could use their local property tax dollars to provide more service than they were receiving. Twelve communities did so, forming the six suburban transit operations in the region today.

However, the political and fiscal equation changed considerably in 2001, when the Legislature eliminated the local property tax for transit operations and replaced it with a share of the Motor Vehicle Sales Tax (MVST).

In that law, the Legislature guaranteed the suburban providers a proportionate share of MVST equal to the property taxes they had been receiving. No longer were these providers spending local tax dollars paid by residents of their community, but rather regional tax dollars paid by residents of the metro area as a whole.

In hindsight, it's fair to say that perhaps we should have phased out "opt-outs" when the basic premise of funding changed. But we did not, in effect protecting their special status.

Today, transit services are available in 89 percent of the seven-county metro area through Metro Transit, contracted routes, Metro Mobility for people with disabilities, and dial-a-ride service when regular-route transit is unavailable. Six suburban providers serve 12 communities that encompass 11 percent of the region. Even within these communities, the Council provides some Metro Mobility and dial-a-ride service.

In 2008, the Met Council provided 94.2 percent of the total transit rides in the metro area, but received only 85.3 percent of the transit revenues from MVST and state general fund appropriations. In contrast, the suburban providers provided 5.8 percent of the transit rides but received 14.7 percent of the MVST revenues and general fund appropriations.

Some of the suburban operators suggest that they are much more efficient than Metro Transit. The facts indicate just the opposite:

In 2008, the subsidy per bus passenger for Metro Transit averaged $2.20. In comparison, the subsidy per bus passenger for suburban providers averaged $4.28, or nearly twice as much.

Looking just at express-bus service, the subsidy per bus passenger for Metro Transit routes averaged $2.31, compared with $2.71 for the suburban providers.

In the face of significant shortfalls in regional transit funding, the Met Council last year proposed that the six suburban providers draw down on their financial reserves before seeking additional MVST dollars. Three of these providers had reserves equaling 150 percent or more of their annual operating budget, which seemed excessive. The Met Council proposed a target of 25 percent to 35 percent, still far in excess of the 8.3 percent operating reserve historically maintained by Metro Transit.

As a result of persistent funding challenges, the Met Council has convened a group that includes representatives of the suburban providers to develop funding policies and procedures that are transparent and equitable.

While I applaud the desire of these six providers to grow their service and ridership, we need to be concerned about regional equity and consistency. The suburbs located outside of their service area -- communities such as Blaine, Bloomington, Cottage Grove, Edina, Forest Lake and Woodbury -- have just as much right to adequate transit service. After all, their residents also pay MVST every time they purchase a new or used vehicle.

The suburban bus systems have portrayed this as urban resentment, when actually it is an issue between suburbs. Why should some suburbs have the right to plan and manage their own service and not other suburbs? And why should some suburbs have complete autonomy even while they are subsidized by all metro taxpayers?

Clearly, not all suburbs are being treated equally. If taxpayers ever come to understand this, there will be a revolt.