Transit is a basic public service, getting people to and from work and school, and reducing congestion and pollution. Public transit helps the downtown office commuter avoid rush-hour headaches and high parking fees, but it is particularly important for those who either can’t afford a car or who can’t drive.
The House (House File 1140) and Senate (Senate File 898) propose significant cuts to transportation. The Senate cuts general fund spending by $41 million from base funding for FY 2012-13, a 23 percent reduction. The House goes much further, cutting transportation spending by $138 million in FY 2012-13, or 77 percent of general fund spending. And all of these cuts fall on mass transit. The general fund accounts for just three percent of all transportation spending – and nearly 90 percent of that general fund money goes to transit. Most funding for transportation comes from other funding sources, such as the gas tax or federal highway funding.
The Senate proposal cuts general fund spending for Metro Transit by $32 million in FY 2012-13, a 25 percent reduction. The Senate also cuts $8 million from transit in Greater Minnesota, but fills in that cut with an $8 million transfer from a fund that supports suburban area transit providers. The end result is a $40 million cut to transit in the metro area.
The House cuts are even more dramatic, eliminating all general fund support for Metro Transit in FY 2012-13, a $130 million reduction. The House also cuts nearly $8 million from Greater Minnesota transit (a 23 percent cut) and eliminates all of the Department of Transportation’s general fund money for commuter and passenger rail.
The Governor’s supplemental budget proposes no transit cuts.
The challenge for transit is that these cuts come on top of other budget pressures.
- Public transit also depends on funding from the motor vehicle sales tax (MVST). MVST revenues have fairly consistently come in below projected levels in recent years. This leaves transit officials concerned that future revenues will also come up short.
- Public transit is facing the same challenges every car owner is facing – rising fuel prices. The Met Council, which operates metro area transit services, says an increase of 10 cents a gallon increases their fuel costs by $760,000 a year.
- Further, metro area transit ridership is increasing and new projects, such as the I-35W Bus Rapid Transit, will lead to increases in operating costs.
To minimize service cuts and fare increases, the House and Senate allows the Met Council, which operates Metro Transit, to use money from other sources. However, those actions will take funding from other needs.
- Both the House and Senate allow the Met Council to transfer money from the Metropolitan Livable Communities Fund, which provides grants to help communities redevelop polluted lands, create jobs and develop affordable housing.
- Both allow the Met Council to use Right-of-way Acquisition Loan Fund (RALF) money for transit, which means there would be fewer resources available to purchase future road right-of-way lands that otherwise could be lost to development.
- The Senate directs the Met Council to use “the maximum feasible amount” of its reserves to pay for bus operations.
- The House would allow the Met Council to accept a transfer from the Counties Transportation Improvement Board (CTIB), a group of metro counties that joined together to support rail and bus rapid transit with a 0.25 percent sales tax. But that is not an easy path. CTIB would have to initiate the transfer, and county voters would have to approve it. Transit for Livable Communities has pointed out that such a CTIB transfer would indefinitely delay several transit projects and could jeopardize the Central Corridor rail project.
The Met Council responded to the House bill by describing possible scenarios for dealing with the proposed $130 million in cuts. One option is for Metro Transit to increase fares by $4, bringing the cost to between $5.75 and $7.00 per ride. The fare increase would trigger a 50 to 60 percent loss in ridership. Another alternative is a service cut approach, where Metro Transit would raise fares by $0.25 cents, but cut nearly 45 percent of the regular routes, including 240 rush-hour bus trips. The Senate directs Metro Transit to use reserves and make transfers from other accounts (as mentioned above) before it can cut services or increase fares.
Deep cuts to public transit will have an impact on many Minnesotans. Proposed transit cuts will disproportionately hurt those of lesser means, who will struggle most with higher fares and reductions in services. Although the House prohibits service cuts to Metro Mobility, which serves individuals with disabilities, this vulnerable community would still be impacted by the budget cuts to mainstream transit services.
Not only will struggling families feel the impact, but so will the state’s economy. Eighty percent of metro area transit riders use the bus or rail to get to work or school. Increases in fares and reductions in service will also create more pressure for people to drive, making an already congested road system worse.