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March 15, 2005
St. Paul, Minn. — Everytime someone buys a vehicle in Minnesota just over a fifth of the sales tax goes to fund transit. Two years ago vehicle sales were booming. Dealers were offering 0 percent financing. People in droves bought new vehicles, and the state's motor vehicle excise or sales tax revenues burgeoned.
Since then the buying frenzy and thus the sales tax revenue have declined. Metro Transit General Manager Brian Lamb says that coupled with rising fuel and employee health insurance costs have created a projected $60 million shortfall.
On Monday Lamb outlined the plans to the Metropolitan Council's transportation committee Monday. It calls for reductions or cancellation of service on nearly 70 percent of the routes, and a 25-cent increase in fares.
The recommendations still face public hearings in April and a vote by the full council. Any fare hikes would take effect July 1, and service cuts would happen in September and December.
"Our guiding principle is if we have to make reductions, we stay in a position to grow again," Lamb said. "Taking 10 percent, it does put us a little out of balance."
Half of the routes targeted for reductions are urban, 31 percent are suburban and 19 percent are express, said Metro Transit's Arlene McCarthy.
Lamb and Metropolitan Council members blamed a $60 million budget shortfall projected for the next two years on a switch initiated by Gov. Jesse Ventura from financing the bus system through the relatively stable property tax to the more volatile motor vehicle sales tax. That tax is projected to bring in nearly $30 million less in the next two years than originally expected, or about half of the hole the council is trying to plug.
Two influential lawmakers, including one from Gov. Tim Pawlenty's Republican Party, are not happy with the news. Both place some of the responsibility for not seeing the money problem in the lap of the governor.
Rep. Mary Liz Holberg, R-Lakeville, who chairs the House Transportation Finance Committee, says she's disappointed the governor didn't do a better job of predicting the transit funding problem. Holberg says finding $60 million with a projected $466 million state budget shortfall will not be easy. Holberg has invested some personal political capital in backing a proposed rapid bus service on Interstate 35W for commuters from southern Twin Cities suburbs.
Senate Transportation Committee Chairman Steve Murphy, a Democrat from Red Wing, predicts lawmakers will find a way to fix most of Metro Transit's projected budget shortfall. Murphy says Gov. Pawlenty is to blame for not making transit a higher priority at a time when other cities are investing in bus and rail.
"We continue to fall behind cities like Denver and Phoenix that are making major investments. This administration once again has given transit services the brush off," according to Murphy.
The Pawlenty administration is proposing dramatic increases in future transit funding. The governor says all -- not just he current half of all motor vehicle sales taxes -- should go exclusively to transportation, and half that money should go to transit. But the increases wouldn't begin until two years from now and would be phased in after that.
Between now and then the transit financing picture is grim.
Pawlenty spokesman Brian McClung stopped short of saying the governor's budget proposal can't accommodate options for solving the Metro Transit shortfall.
"The governor's plan is on the table and looking forward to a good discussion of that," he says.
Metro Transit accounts for a very small percentage of daily trips in the Twin Cities -- about 3 percent. However, there are transit hotspots. One is Minneapolis, where on weekdays, bus and rail account for 40 percent of the trips in and out of downtown.
Transit for Livable Communities spokeswoman Sacha Peterson says failure to fix Metro Transits money problems is becoming a familiar pattern for customers.
"They are forced to get back on the highway. That's what we've seen in the last several years. This would be the sixth funding cut in the last five years and that's a significant blow to any transit system," Peterson says.
The Associated Press contributed to this report.