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Message from the Chair - January 2003

Dealing with new Council budget realities

Gov. Tim Pawlenty has proposed specific budget cuts in state government services as a solution to the forecasted $356 million state budget shortfall over the next six months, the remainder of fiscal year 2003. As the governor has said repeatedly, the budget deficit is a burden we all share. The Metro Council/Metro Transit share of the governor's proposed short-term solution is a budget reduction of $2.6 million.

Of that amount, $1.5 million would come from Metro Transit and the rest from Metropolitan Transportation Services and Regional Administration. The cut represents a four-percent reduction in the general fund appropriation of $65 million for transit in fiscal year 2003. But because this cut must be absorbed over a six-month period, the actual impact is an eight-percent reduction.

Transit is crucial to the region's economy, as people have to be able to get to their jobs. About 80 percent of transit trips are taken by people going to and from work. We are committed to doing everything we can to maintain service for our customers. We believe there will be only minor service reductions for the near term and no immediate fare increase. However, we will continue to look at cost cutting and efficiency measures.

Our short-term options include the following:

• 25 percent: Minor service adjustments, such as reducing frequency of service and curtailing weekend service, for example. These and other possible cost adjustments would bring cost savings, including reduced fuel costs.
• 25 percent: Opportunities to use some one-time federal capital funds (for buses and transit facilities) for operations.
• 50 percent: Administrative cost reductions, including advertising costs in view of the reduced need to recruit drivers, for example. Other reductions could include reducing positions, freezing salaries and imposing travel restrictions.

All of this is a daunting challenge, certainly, especially given the short time frame. Yet these are just the first of a number of steps we will need to take to work with the Administration and the Legislature in tackling the broader budget issues. In the longer term, everything will be on the table, including fare increases and service reductions.

I look forward to working with you and getting your ideas on innovative ways we can help address the large budget shortfall – solutions that will be good for the Council and the region. Call us at 651-602-1000 or write us at data.center@metc.state.mn.us.

- Peter Bell

January 2003