January 30, 2013

Metropolitan Council Budget Overview SFY 2014-2015

Committee on Transportation & Public Safety

Transit is part of a thriving metro economy

Connects businesses
to employees and workers to jobs Reduces congestion Provides environmental benefits Expands choices

Metro area is the economic engine of the states economy

Seven-county metro area has a Gross Metro Product of approximately $200 billion, making it the 13th largest metropolitan economy in the nation Represents approximately 2/3rd of the states GDP Metro economy is larger than half the states in this country

SFY 2014-2015 Budget Proposal

Governors Budget Proposal:

increases transit funding
Regional transit capital and operating funds would
increase by:
Increasing regional transit dedicated sales tax by cent for the metro area (assumes all seven metro counties) Increasing receipts to CTIB current cent by expanding the state sales tax base

Governors Budget Proposal:

increases transit funding
Proposal yields additional $348 million for transit in
SFY 2014-2015*
SFY 2014 (partial year)--$100 million

$74 million from cent transit dedicated tax $26 million from expanded CTIB receipts
SFY 2015--$248 million

$183 million from cent transit dedicated tax $65 million from expanded CTIB receipts

* Based on governors sales tax proposal, assuming January 2014 implementation

Governors Budget Proposal:

helps address state budget shortfall
Funds $18M shortfall in states share of light rail operating costs
this biennium

Funds remaining state share of Southwest LRT capital costs of

$118 M

Relieves general fund of operating costs for current and future

transitways

Relieves states GO bonding share for future transitways In SFY 2014-2015, provides one-time $46.8 M reduction to state
general fund from current base of $130 M

Governors Budget Proposal:

ends one-time fixes

Cannot develop a long-term transit system with unpredictable, year-to-year budgeting Nearly $100 million in one-time fixes from 2005-2013 Governors budget would: Create a reliable and sufficient transit funding source Keep the metro area highly competitive with other regions Encourage private economic investment by bringing greater certainty to transit investment Provide easy to administer collection source

Transit operations funding and tax policy goals

Governors budget balances state,
Current
11%

regional, and farebox recovery to operate the transit system

State Fares Regional

28% 61%

Greater reliance on regional sources for regional services Less reliance on state sources

Future

Maintain 28% farebox recovery

35% 37% State Fares Regional

Focus state general funds on Metro

Mobility (federal ADA mandates)

28%

Regional Transit System Comparison

Farebox Recovery Ratio
San Diego Seattle Milwaukee Twin Cities Denver Portland Pittsburgh Peer Average Baltimore Cleveland Phoenix St. Louis Houston Dallas
0% 5% 10% 13.7% 15% 20% 25% 30% 35% 40% 45% 20.9% 20.8% 19.0% 28.8% 28.1% 27.9% 27.9% 26.5% 25.6% 24.8% 24.1% 23.7% 39%

2011 NTD Regional Figures Includes all modes and providers operating in each region

Budget Proposal Outcomes

All transit services & providers benefit

Services include: Bus Local Express Rail Metro Mobility Providers: Suburban Providers Metro Transit MTS

Return on Investment $6-10 Billion

Itasca Group Transitway ROI Study analyzed the 2030 Transportation Policy Plan

Itasca predicts ROI of $6-10 billion to 2030 achieved

through accelerated build out of transit and through savings such as: travel time savings reduced vehicle operating cost saving to shippers reduced emissions

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Transit investments key to strong economy

Transit connects people to jobs and businesses to customers. Currently provide more than 250,000 rides per day and more than 94 million transit rides per year 80% of riders are going to work and school 40% of people who work in downtown Minneapolis use transit

Transit connects people to work, creates jobs

LRT construction creates jobs CCLRT employed over 4,800 construction workers SWLRT is expected to directly support 3,650 construction and engineering jobs CCLRT will connect people to 280,000 jobs, expected to grow to 374,000 jobs SWLRT will connect people to 210,000 jobs, expected to grow to 270,000 jobs

Citizens support expanding transit

Eight out of ten (79%) agreed. Minnesota would
benefit from having an expanded and improved public transit system, such as rail and buses January 2013 Chambers of Commerce survey

Same poll: 65% of respondents statewide support

metro sales tax increase to fund transit

Business support expanding transit

Additional revenue provided by the quarter-cent seven-county sales tax would complete the entire system for the region. Current employers would have the certainty they need to expand. Other companies would be more likely to come here as GreaterMSP reminds us, one of the first items prospects request is the areas transportation plan. And, young workers, those already here and the ones we hope to attract, would be drawn to a community offering the transportation options they demand.
Todd Klingel, President, Minneapolis Chamber of Commerce

The Saint Paul Area Chamber of Commerce is invested in the transit solution for the Twin Cities because without transit, business comes to a halt.
Matt Kramer, President, St. Paul Area Chamber of Commerce

If we want world class businesses and world class community, we really do need to have a world class transportation system, and part of thathas to be a world class transit system. [Our competitors have] very comprehensive systems that encourage growth and development that serve the whole region.
Bruce Nustad, Former President, TwinWest Chamber

Transit relieves congestion for all highway & road users

Transit provides environmental benefits

Transit investment leads to development

Hiawatha LRT Corridor Nearly 10,000 New Housing Units

Transit investment leads to development

Central Corridor $1.2 billion in development

Metro area is growing and changing

Transit helps attract, retain younger workers

Metro area needs to compete with other regions

Without new revenue, metro area transit faces serious challenges

Under the status quo, increasing demands on General
Fund:
$18M SFY 14-15 General Fund increases above the $130M base:
$9.2M Hiawatha LRT $8.8M Central Corridor LRT

SFY 2014-15 Southwest LRT (SWLRT) capital budget

need: $118M

General Fund increases required in subsequent years to

maintain current service levels

No system expansion to meet growth

Status Quo Outcomes

Larger fare increases to cover
increased operations costs

Only current service levels

maintained for SFY 2014-15; no system expansion

Services fail to keep up with

population demands

Increased congestion expected

metro-wide

Southwest LRT reliant on

future state funding