Citizens League Study Recommends Transit Funding Options

From September to December 2016, the Citizens League convened a study committee to review the current transit funding system and work to identify new funding scenario options. The diverse 21-member study committee was chaired by Peter Bell, former Met Council Chair (2008-11). Ann Lenczewski, former Minnesota House of Representative and Chair of the Tax Committee, served as the committee’s vice-chair.
Last year, the Citizens League made recommendations about governance improvements for the Metropolitan Council. This past work also identified transit financing and governance as the next step in this larger issue. The study was precipitated by lawmakers’ inability to pass a comprehensive transportation package during the 2016 legislative session.“Anyone following this current discussion knows that the issue of financing transportation in general and transit in particular has become so contentious that it has prevented resolution of other important policy topics at the Legislature,” said Sean Kershaw, Executive Director of the Citizens League. “Instead of arguing, the study committee leveraged the different perspectives of each committee member to come up with sound recommendations that we believe are implementable.”

Some of the Citizens League transit funding recommendations include:

  • Create two tiers of taxation in the metro area where the taxing lines could follow density of service. This proposal would tax more where the majority of the use is and less from those areas where there is not as much transit. It may have the potential to garner bipartisan support.
  • State dedicates transportation-related General Fund revenue (e.g., motor vehicles lease sales tax, rental tax) to transit, with no reduction in General Fund base appropriation for transit.
  • State funds Metro Mobility through a line item in the base General Fund appropriation for Metropolitan Council.
  • State dedicates a portion of General Fund surplus to transit for operations.

“Transit is a key component to our region’s growth and development,” said Peter Bell, chair of the study committee. “There is a need for a stable and reliable funding source and formula for transit capital and operations. Only the Legislature can set up that framework.”

In addition to the funding recommendations, the committee identified two larger-scale trends that have deep implications for transit:

  • Changing Demographics: The aging of the baby boomers—with their departure from the workforce and the loss of driving capacity as people age, live longer, and more independently—will impact all aspects of the economy and society. Mobility will become more important for economic and social reasons as our society goes through this unprecedented demographic change.
  • Technology: Over the next 15 years, rapid advances in technology will make autonomous vehicles a reality, perhaps on a significant scale. These changes, while unproven, have the potential to impact all aspects of our economy. They will certainly impact what we call “transit” and everything related to mobility.

Minnesota and other regions around the country are continuing to prepare for these and other incredible changes about to take place. These changes will impact our future economic health and quality of life dramatically. Resolving or at the very least moving on from past arguments about transit governance and finance is necessary to begin to meet some of these challenges.

Read the full report here.