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Met Council votes to increase transit fares by 25 cents. Why now?

Here is the headline: Met Council votes to increase transit fares by 25 cents. Why now?

And the story from Janet Moore at the Minneapolis Star Tribune:

Come Oct. 1, passengers using public transit in the Twin Cities will pay a little more. The Metropolitan Council on Wednesday unanimously passed a 25-cent fare increase for local and express buses, light rail and commuter rail, as well as a 50-cent hike for Metro Mobility, a service for disabled people. The council said the fare hike – the first since 2008 – was needed to battle a $110 million budget deficit expected by fiscal 2020-2021.

I have one observation and one question.

First the observation. Everything that the Met Council does these days seems to be in support of getting more light rail lines (and bike paths) rather than improving bus service. The Met Council came hat in hand to the legislature this year, asking for more money because it was running a big transit operating deficit ($80-90 million). The transportation bill gave the Met Council additional funds to cover most of that deficit (I am pretty sure it was one time money) but warned them that the transit operation would be subject to an upcoming audit. The concern is that the Council is cannibalizing bus service (which most riders use) to fund their pet LRT and bike path systems.

This fare hike will not make much of a dent in the operational deficit.

Here is the question: why did the Council step up and make a very reasonable rate increase now? The Council has not raised fares in almost ten years which is frankly irresponsible (most metro area operators raise fares on a regular schedule to keep up with increased costs). Instead, state taxpayers got to pony up the fare money.

Having observed the “conversation” around transit for years, and seeing the kooky out-of-touch culture around it, I feel confident saying that the Met Council would be OK with free transit in the metro. Or at least free for most people. It is easy, for example, to skip paying any fare when riding LRT.

So why did the Council step up and make a reasonable rate increase now? Answer: They are flying out to DC to lobby Congress and the FTA/DOT on a regular basis trying to secure full funding grants for LRT expansion: Southwest LRT and Bottineau.

The FTA has been giving Southwest LRT “medium” to “medium-high” ratings for different aspects of the project. One of the “medium” ratings is for “Reasonableness of Capital and Operating Cost Estimates and Planning Assumptions/Capital Funding Capacity.”

The note from the FTA for Southwest LRT says, “Regarding growth in operating revenue assumptions, farebox collections are optimistic and MVST forecasts are reasonable compared to recent historical experience.” (Emphasis added.)

My reading is that the fares are going up, at least in part, to impress the decision makers at the FTA.

The transportation bill also directed the State to bow out of any further financial commitment to Southwest LRT (capital or operating costs) and shifted the funding capacity and responsibility to the counties. This is why Hennepin and Ramsey just raised taxes. It also means that the Met Council must re-submit its financials for both LRT expansion projects to the FTA.

Just a note: the FTA relies entirely on what the Met Council tells them when assessing the eligibility for federal matching funds.

The counties and Met Council claim that they will have plenty of money and bonding capacity, without state funds, to buildout and operate the LRT expansion in the metro. Remember that when they come back to the state for more money.

But the Met Council, and its friends on the Hennepin and Ramsey County boards (Peter McLaughlin, et. al.) have NOT secured federal funding. They have not cleared the bureaucratic hurdles in the DC, nor have they convinced Congress to appropriate funds in 2018 for projects (like Southwest and Bottineau LRT) that have not already secured full funding grants at the FTA. This is what is known as “Trump’s Skinny Budget.” It shifts transportation spending for things like LRT to the local level.

That may explain why the Met Council announced that it is pushing off construction starts for Southwest LRT into 2018. And said goodbye to Chair Adam Duininck, and hired a veteran of transit and rail with experience in Washington, DC, Alene Tchourumoff, to chair the Met Council as of August 1.

 

 

 

 

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