One Penny

Houston Light Rail by Travis Estell on Flickr

Houston Light Rail by Travis Estell on Flickr

I recently visited Houston.  While on a tour of the Red Line, their first LRT line, I was told the story of its funding. Tom DeLay twice blocked federal funding for the line, meaning the entire initial 7.5 mile was built with local dollars – $324 million of them. Houston seemed to be living the Strong Towns dream (they have since accepted federal money for other rail segments). I was told repeatedly on the tour that they did not build the Red Line to serve park-and-rides (later I learned the line does have at least one, at the southern terminus of the line near the maintenance facility), and that this has contributed to the line’s success (2012 weekday ridership exceeded our 12-mile Blue Line by 14%). The representative of the transit agency told me they were able to build this line on their own because the agency has its own one penny sales tax dedicated to transit.

Planned transitways under current revenue scenario

Planned transitways under current revenue scenario

After I got back, I started reading the Metropolitan Council’s draft 2040 Transportation Policy Plan. Under the “current revenue scenario”, meaning sans MoveMN-type legislation, our urban cores are basically getting a few bus upgrades and the completion of planned commuter rail suburban-serving LRT. Even under the increased revenue scenario, we’re apparently done building LRT projects through 2040.  Over the next 25 years, Minneapolis and Saint Paul alone are expected to add over 130,000 people, and for the most part we’re just planning to upgrade some buses (under the optimistic funding scenario). Don’t get me wrong, I love the bus, but it seems like we could be more visionary.

In a daze induced by Houston heat and possibly mosquito-born illness, I asked myself: could our urban cores strike out on our own, transit-wise? MoveMN has its opponents and proponents, but the road (sorry) to its passage will be long, winding and almost certainly full of political compromise. Writers on this site will not agree whether its benefits will be worth its costs. So what if Minneapolis and Saint Paul just wanted to build transit on our own?  What if we had a one penny sales tax dedication?

According to the Minnesota Department of Revenue, Minneapolis and Saint Paul combined generated over $9.6 billion in taxable sales in 2012, which would equate to $96 million annually from a one-penny sales tax. At that level, we could build an (urban) LRT line every 10 years, a streetcar-type project every two years, the entire 11-line Arterial BRT network in four years, 0r 6,000 heated bus shelters per year.

Is this a thought exercise? Yes. Minneapolis and Saint Paul would have to get legislative approval to levy a local transit sales tax. Many people would have strong opinions about this. And of course there are those pesky operations costs which I neglected to mention in the paragraph above (I assume Metro Transit would give us a good deal on that, right?). But a locally-funded transit system that served transit-supportive areas really well might not be completely out of realm of possibility.

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19 Responses to One Penny

  1. Dave Baur September 17, 2014 at 8:46 am #

    Thanks for writing this, even if it is only a thought exercise at present. I’ve had conversations about this where the reaction to the notion of not relying on federal funding or other top-down mechanisms is a sort of shrug with the assumption we just don’t have that kind of money on our own. As you point out, the core cities generate enormous wealth, so assuming we simply don’t have money is incorrect. Secondly, there’s no reason to assume that if it was done independently that we’d be spending $1.6B to build out flawed lines.

    Should the core cities go it on their own? Should we spend major dollars for these kinds of projects? What projects would we build if we did go that route? Those are great questions. But assuming we simply cannot do it isn’t accurate.

  2. Adam Froehlig
    Adam Froehlig September 17, 2014 at 8:54 am #

    If the fiasco with the Met Council and streetcar planning is any indication, it would be very difficult (if not impossible) for Minneapolis or St. Paul to strike out on their own.

  3. Matt Steele September 17, 2014 at 9:26 am #

    If only we weren’t instead directing revenue from a local option sales tax to a billion dollar TV studio to enrich a man ordered yesterday to pay a $94 million fraud settlement, who hires [alleged] homophobes and child abusers….

    But yes, we definitely need to reintroduce a feedback loop that rewards viable places with demanded mobility. Part of this would look like undoing the “Minnesota Miracle” passed in the early 1970s, which has only been a miracle if you’re a suburban/outstate sprawl practitioner or a developer for national chain establishments.

  4. Matt Steele September 17, 2014 at 9:31 am #

    This is precisely the problem with MoveMN – I’m convinced that even if it mean more dollars flowing to contractors building transit or bike infrastructure, it would still make things worse. And I’m not alone. MoveMN is like the bipartisan Stillwater Bridge – beloved by trade unions and chambers of commerce alike – and the worst of what direction our society could take. It’s neither progressive (it will accelerate construction of environmentally and economically destructive sprawlscape that is a major contributor to our population being unhealthy and impoverished) nor is it fiscally responsible (it’s a massive slush fund for more of the same, rather than questioning why our mobility approach of the last 60 years has failed so miserably).

    You should have heard Seattle mayor Mike McGinn talking about how he helped defeat a MoveMN-style project out in Washington, when he spoke at the StrongTowns National Gathering this past weekend. It was inspiring to hear a progressive elected who gets it!

    Urban populism!

    • John Bailey September 18, 2014 at 12:59 pm #

      Matt — I don’t want to make this a wonky ‘splitting the hairs’ difference but comparing Seattle transit funding to here is tricky because of the difference between referendum funding and legislative. I assume that McGinn would admit that any transit only funding scheme would make it out of committee in Olympia. If I remember correctly, the hope had been that they could succeed at the ballot box with a metro-wide funding source solely for transit, which I believe failed while he was in office. That’s not meant to be critical of that approach, if fact, transit only funding packages have generally only succeeded at the ballot…in many places such as Houston.

      Even if I thought that there were the votes for a 7 county transit ballot initiative, or even a Mpls/StP one, I don’t believe the Leg would allow it. (For the record, I don’t think the votes would be there for a ballot but that’s just my opinion based on nothing.)

      To me, this is The Mother of All Pickles. I know there are people within the Move MN coalition who would agree with many of the critiques that you and others have. The issue is the Legislature. Just about all the transit expansions around the country are being funded by ballot campaigns for transit. We gotta deal with the Legislature and no amount of urban populism will change that.

      • John Bailey September 18, 2014 at 1:10 pm #

        In that second sentence I meant to say that McGinn would admit that a transit only funding piece would NOT make it out of committee.

      • Faith September 19, 2014 at 11:17 am #

        For the record: the Seattle transit only ballot measure passed by wide margins: http://en.wikipedia.org/wiki/Sound_Transit

        • John Bailey September 19, 2014 at 11:32 am #

          That’s embarrassing! I totally thought they’d had a big win but when I double-checked I only came across the 2011 failed vehicle tab vote on CFTE’s site: http://www.cfte.org/elections/388/seattle. I should have gone with my gut. Apologies for the bad info and thank you for the correction, Faith.

  5. James Warden
    James Warden September 17, 2014 at 10:36 am #

    I had a good chat with Jim Kumon from Strong Towns about this for an article we ran a month ago. (Sorry, Matt, it has a pay wall. Gotta pay the bills.) He raised some of the same points Matt raised. “We haven’t been having an honest conversation with ourselves about what are our options,” he said.

    Joshua Schank, president and CEO of the Eno Center for Transportation, a nonpartisan transportation think tank in Washington, D.C., added: “When it comes to federal money, the transit guys and the highway guys have been in bed together for years and have a tacit agreement not to fight.”

    For their part, MoveMN advocates said they’re not aiming for an overhaul. The effort is focused “largely on the same revenue sources that transportation has relied on but they haven’t been adjusted.” Margaret Donahoe, executive director of the Minnesota Transportation Alliance, said, “We have agencies and we have experts whose job it is to manage the system. We’re not responsible for managing the system.”

    Anyway, here’s the story:

    Big wheels line up in transportation push
    Are broad coalitions the cooperative politics we need, or a play for spoils?
    http://finance-commerce.com/2014/08/big-wheels-line-up-in-transportation-push/

  6. Alex September 17, 2014 at 11:03 am #

    Thank you for posting this, Brendon. I haven’t had time to run the numbers myself, but I think your analysis shows that the “increased revenue scenario” included in the 2040 TPP is in fact extremely fiscally conservative, much more so than required by law. Why is it unrealistic to expect a penny sales tax for transit across the Metro area? Is there really an argument that the USA doesn’t have the resources to raise funding for necessary infrastructure projects? The Met Council has a responsibility to plan for need, not for a tea party victory, and the fact that they’ve failed to do so is extremely disheartening for the future of the Twin Cities.

    • Adam Froehlig
      Adam Froehlig September 17, 2014 at 2:33 pm #

      “Why is it unrealistic to expect a penny sales tax for transit across the Metro area?”

      Because Legislature. Can’t bank on something that’s been proposed but hasn’t happened yet. Taking it to an even more extreme, did you know that, at one point in the early 1980s, the Legislature had actually passed a plan to shift the MVST to transportation? It partially worked for a few years until they moved it back to the General Fund. It took until the Constitutional Amendment in 2006, and the 5-year phase-in afterwards, before the MVST was fully dedicated to transportation.

      Which leads me to my next point:

      “Is there really an argument that the USA doesn’t have the resources to raise funding for necessary infrastructure projects?”

      The US certainly has the resources. What it lacks is the political will and public pressure to do so.

      • Matt Steele September 17, 2014 at 3:37 pm #

        What’s the point of planning if the plans must conform to a narrow status quo that is likely not to be the reality in the future whether next year or in a decade?

      • Alex September 17, 2014 at 7:21 pm #

        Maybe it’s optimistic, but I think it’s a mistake to project post-Green Line transportation politics in MN based on pre-Green Line transportation politics. Just from what I’ve heard from suburban friends and family, they like what they see and want more.

        But I admit that we don’t know if there will be a trigger that causes awareness in the general population of the need for a more rounded transportation system, I just know that if there is one, a one penny sales tax is entirely within the realm of possibility.

        More concrete, there has been mostly consistently increasing support for transit at the MN Legislature and I haven’t seen any political analysis suggesting it will reverse.

        • Nathanael September 21, 2014 at 11:01 pm #

          Remember, the Green Line is already beating the ridership projectionf which were supposed to be for the year *2030*.

          You should get a very substantial pro-rail-transit shift in voting in the next few years, just as you got a shift when the Blue Line first opened.

          The only way you wouldn’t is if, for some reason, the legislature is dominated by people who rarely or never visit Minneapolis or St. Paul. I don’t think that’s going to happen; the demographics of Minnesota mean that the Twin Cities metro area completely dominates the state, more so than NY city dominates NY state. Once the suburbanites are voting for rail transit, the rural voters aren’t going to outweigh the urban/suburban coalition. Of course, at that point, why go with local taxes? State government spends money on roads in the Twin Cities. If you get an actual working majority there, you can spend money on rails in the Twin Cities too…

  7. JBL September 17, 2014 at 4:56 pm #

    Are you sure that “one penny tax” and “one percent tax” are synonyms? I would have guessed not, and your $96 million number comes from the latter.

  8. Joseph Totten
    Joseph Totten September 17, 2014 at 7:54 pm #

    1% tax should only be for capital, economic downturns should not lead to a reduction in transit service.

    But all seriousness aside, can we note how the train has no idea where it’s going, or is really snarky? “Uh – Downtown”

  9. James September 18, 2014 at 7:54 am #

    From Houston: you should see what we could do with a whole 1 cent! As it happens, only 3/4 of a cent is available to METRO because the other 1/4 was given away to the member jurisdictions for road projects in a political deal years ago. Dallas is an example of what can be done with a whole cent, but unfortunately they chose to spend it on a bunch of low ridership, park & ride rail lines. Look for Houston’s 25 mile rail system to surpass their 100 mile rail system in ridership within the next two years. Meanwhile, our bus system will likely hit double the ridership of theirs in that timeframe.

    • Ron September 19, 2014 at 11:22 am #

      People would have to see the growth in inner loop density in Houston to believe it. It’s truly becoming a great American city (diversity and opportunity) and it does it in a lot of ways that are the opposite of many cites. People could learn a lot from Houston. (like how to have an openly gay mayor in a major city w/o it being a big deal. top that someday minneapolis)

      • Joey Senkyr
        Joey Senkyr September 19, 2014 at 2:21 pm #

        Minneapolis has three openly gay state reps, an openly gay police chief, and has had an openly gay city council member. I have no reason to believe it would be a big deal to have an openly gay mayor.

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