Transit authority wants to double tax levy while sitting on millions in pandemic funds

It’s the same old story, but with a cruel twist for taxpayers. Like other public transit systems, the Duluth Transit Authority continues to run half-empty buses, still lagging far behind pre-pandemic ridership levels. You might expect transit officials to hold the line financially as they attempt to attract more passengers. Instead, DTA has put the pedal to the metal, proposing to more than double the property taxes residents currently provide for the flailing bus service.

The News-Tribune notes the transit agency’s brazen proposal didn’t sit well with one city council member.

While the DTA is part of a special taxing authority whose dedicated tax revenues don’t flow into the city’s general fund, 3rd District City Councilor Roz Randorf noted that when the authority raises its levy, local taxpayers take a hit.

She pointed out that while the DTA levied $1.6 million in 2022, it proposes to collect $3.9 million next year. That’s a $2.2 million jump in property taxes.

Randorf said the levy for the special taxing district currently amounts to $150 in taxes on her residence, and that charge would jump to $343 if the DTA’s current request is fulfilled.

Never mind that Duluth transit officials are still sitting on some $9 million in unspent federal Covid relief funds. Rather than give taxpayers a break, they actually cite fiscal responsibility as a reason for jacking up the agency’s levy by more than 200 percent, while continuing to hoard the federal giveaway.

Even though the pandemic has eased, Fournier said ridership has not yet bounced back, with buses carrying only about 60% of the passenger load they did before the COVID-19 outbreak. He said that reduction in use is comparable to what other peers in the industry have experienced.

Fournier said the DTA is currently using about $230,000 per month in COVID-relief funding just to backfill and cover operating expenses.

While he acknowledged the $9 million in reserves is a large sum, Fournier said, “We’re proud that we were very judicious with these funds. We’re using them as a safety net right now, because we don’t know where the pandemic is going next. Nobody does.”

But Randorf wasn’t impressed. She urged the agency to dig deeper into pandemic funds and cut taxpayers some slack.

“So, the way I see it, this is their cushion for stormy times like this, when ridership is down and gas prices are up, because you’re virtually running half-full buses on very expensive gas,” Randorf said.

She suggested the DTA should draw more heavily on its relief funds and reduce the burden placed on local property taxpayers. Randorf proposed the authority levy just over $2.17 million next year, which is still an increase of more than $500,000 from this year.

In the long run, the federal subsidy and higher property taxes for transit may well only postpone an inevitable conversation. What’s the role of public transit in the post-Covid era?

The stakes are high, according to 1st District Councilor Gary Anderson.

“As everybody knows, I drove bus for the DTA for nine months. I have that butt-in-the-seat experience, and I know the importance of this work, and I also am very cognizant of the fact that we are a community and a culture that’s in transition. Therefore, this discussion is really pertinent,” he said.