Federal and Local Funding Still in Doubt for Southwest Light Rail

The sigh of relief by Met Council brass over a $10 million New Starts federal grant that keeps the Southwest Light Rail line on life support illustrates just how jittery the regional agency has become over the fate of the controversial $1.9 billion project.

But the troubled line still faces significant obstacles in Washington and St. Paul that threaten to derail funding and approval of the project.Met Council Exterior

The funding announcement became news as part of the federal budget deal reached by Congress over the weekend. Some initial reports gave the impression that Congress had fully funded the project and directed the US Department of Transportation to advance SWLRT.

Yet a closer look at the budget deal reached by Congress over the weekend shows SWLRT barely made the cut for transit dollars. The Minneapolis to Eden Prairie project received the lowest amount of funding by far of the twenty-one transit projects covered by the agreement.

SWLRT also remains on a list of four transit projects that did not meet the Trump Administration’s proposed October 2016 cutoff for federal funding, potentially leaving the line in limbo, or cancelled. In addition, Minnesota House Speaker Kurt Daudt and 83 Republican state legislators have asked U.S. Transportation Secretary Elaine Chao to reject funding for the project, along with Rep. Jason Lewis, R-Minn.

“The reports of full funding for SWLRT are premature: this is not how the New Starts program works,” said Kim Crockett, Center of the American Experiment Vice President. “The budget ‘deal’ only directed the Secretary of Transportation to give SWLRT $10 million—not the full $929 million funding needed. I am not even sure that Congress can direct the funds because Congress cannot “earmark.” I think it was more of a suggestion, given all the lobbying for this project in D.C.”

Met Council officials have hinted that the grant announcement amounts to a green light for a project that’s hit a roadblock due to the Trump administration’s proposed cuts in transit funding.

“This is encouraging news. The inclusion of [SWLRT] in the proposed budget is an indication that the federal delegation understands this project is a key piece of our region’s transportation infrastructure,” Met Council Chairman Adam Duininck said in a statement to the Star Tribune.

Yet SWLRT does not have a signed grant agreement with the federal agency tasked with selecting projects under the New Starts program. Nor has it competed the federal checklist needed for full funding. The federal to-do list includes:

  • Complete the engineering phase of the project
  • Negotiate co-location and other agreements with several freight railroads in Minnesota
  • If unable to reach agreement, file for federal common carrier designation
  • Obtain federal Office of Railroad Safety approval of those agreements

Local funding also remains up in the air. The Met Council continues to scramble to cobble together the fifty percent of local funds required by the FTA.

When the state legislature declined to fund SWLRT last year, Met Council Chair Adam Duininck, broke a promise and threatened to finance the project with “certificates of participation.” This “go-around” is an obscure borrowing technique that does not have the same requirements as bonding, even though it is a form of borrowing.

“As we have warned, the Met Council (all appointed by Dayton) is more powerful than the Legislative majority in Minnesota, not to mention all five suburban counties who have been demanding that its governance structure be reformed,” Crockett said.

Legislators have responded with transportation bills that, among other restraints on LRT expansion, forbid the Met Council from using certificates of participation without their approval. With the transportation bill in conference committee right now, it remains to be seen whether the prohibition against the controversial form of financing makes it into the final bill, or goes to the Governor’s desk.

Center of the American Experiment opposes light rail transit on the grounds it diverts hundreds of millions of transportation dollars that could be spent more effectively to relieve congestion on Twin Cities highways.