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2009 State of the Region

Region faces ‘major challenge’ to fund bus operations

The Twin Cities region has made “great progress” toward improving and expanding its transit system, but faces major challenges in meeting the cost of operating it.

That assessment was delivered by Metropolitan Council Chair Peter Bell at the 2009 State of the Region event in February.

Several major transit projects are moving forward, Bell noted. The region is:

• Nearing the completion of its first commuter rail line in the Northstar corridor
• Accelerating development of bus rapid transit (BRT) service in the I-35W and Cedar Avenue corridors
• Moving toward construction of its second light rail transit (LRT) line in the Central Corridor.

Bell lauded Metro Transit for providing nearly 82 million rides in 2008, a 27-year high, and said that suburban providers also registered strong gains.

Funding bus operations is a ‘major challenge’

However, the region faces “a major continuing challenge” – obtaining sufficient funds to maintain and expand bus operations in this region, Bell told a crowd of local officials and community leaders gathered at Maplewood Community Center.

With revenues from the Motor Vehicle Sales Tax (MVST) once again falling short of projections, Bell said regional transit faces a $45 million shortfall in the 2010-11 biennium just to provide current and committed service.  The shortfall affects Metro Transit, Metro Mobility for persons with disabilities, and suburban and community providers.

Bell noted that the 2008 Legislature authorized the metro counties to impose a new quarter-cent sales tax for transit, but restricted the use of revenues to the development and operation of rail and bus “transitways.”  Apart from a one-time appropriation of $31 million, the law does not permit the use of these revenues to maintain or expand regular-route bus service.

“Frankly, we are confronted with a structural imbalance between the revenues available to grow our transit system, and those available to operate it,” Bell said.

Looking ‘far and wide’ for funding

Until the economy improves and MVST regains some footing, the Council is “looking far and wide,” Bell said, for options to deal with the funding shortfall. For example, the Council is seeking legislative authority, he said, to temporarily divert money from the Livable Communities Demonstration Account to transit operations. Patti Nauman, executive director of Metro Cities, said that cities would have a "significant concern" about this transfer and urged the Council to look at other options.

Bell responded that with the economic downturn, there is less development going on and less demand for the LCDA funds. “My hope is that as development picks up again, MVST will start ticking up again as well,” Bell said. He also noted that the Council is using reserves to help fund transit. “We’re looking far and wide,” he said, for ways to deal with the budget deficit.  

Bells highlights Council achievements

In his speech, Bell also provided an update on the regional economy and highlighted some of the Council’s achievements in the past year. These achievements included:

• Taking delivery of 67 hybrid electric buses, about one-third of the 172 that will be added to the Metro Transit fleet over the next few years as part of the agency’s “Go Greener” initiative.
• Completing 23 consecutive months of perfect compliance by the region’s eight wastewater treatment plants with their clean-water discharge permits.
• Launching a Regional Parks Foundation that will seek contributions from private sources to accelerate the acquisition of land needed to expand the regional system of parks and trails.
• Joining with the Minnesota Housing and the Family Housing Fund to establish a new revolving loan fund, which will be used to help communities acquire land for future affordable housing projects.
• Working closely with the 189 cities and counties in the region to assist them in updating their local comprehensive plans. Under state law, these plans must be consistent with the Council’s regional plans to ensure the orderly, economical development of the seven-county area and the cost-effective use of regional infrastructure.