Representatives from the Minnesota House and Senate have ironed out an agreement on the details of the state's transportation financing for the next two years. The bill, which has since received bi-partisan support in the full House and Senate and is now awaiting the signature of the governor, offers several good compromise positions that will help buffer cuts to transit, support new rail planning, and begin to rethink land-use planning.

Transit
Transit in the Twin Cities is facing a projected $63 million deficit over the coming two years--largely due to declining revenues from the tax on motor vehicle sales. Given booming ridership (up 17 percent since 2005) and the basic need to get people to work, it was important that a solution was found that would not result in significant service cuts or fare increases.

With the constraints of a nearly $5 billion State budget deficit also looming, the legislators involved should be commended for thinking creatively about ways to address the immediate transit shortfall. While there is still a need for a durable, long-term solution, the solution offered by this bill ensures that transit helps to contribute to overall budget solution while mostly solving the transit budget deficit with a combination of one-time transfers, shifts, and efficiency measures. These shifts will unfortunately take away from other transit-supportive programs, but in the end they were deemed a necessary compromise when substantial new revenue was off the table. One smart shift was to move some Motor Vehicle Sales Tax revenue from road construction to transit--a change that will help ensure that we don't devastate transit at a time when highways have received a $500 million boost from the Federal stimulus package.

A key point of this solution is that it means that there will likely not need to be a fare increase in the Twin Cities over the next two years. The bill does leave the Metropolitan Council with the flexibility to raise fares if they need to because of unforeseen conditions (like a continued drop in revenues or fuel price increases), but Council Chair Peter Bell confirmed yesterday that his assumption is that the budget would not necessitate a fare increase.

Metro Area transit--current Legislative solution in the omnibus transportation finance bill

Transit in Greater Minnesota also faces a deficit of about $8 million over the next two years. The bill offers a shift of $6 million from the Motor Vehicle Sales Tax revenue for highways to lessen the cut, but the $2 million projected deficit for Greater Minnesota will still likely mean a nearly 6 percent reduction in transit service or additional fare increases. The bill does take an important step to increase payment flexibility to Greater Minnesota transit providers to alleviate cash flow problems that have plagued the process recently.

The bill also includes three provisions to make transit more accessible.

1. funding for the work of a council examining ways to improve transit access for people who rely on transit as their primary means of transportation
2. a pilot program to offer discount transit passes to social service providers
3. free transit service for disabled veterans

Rail
The bill provides $1 million for commuter and passenger rail planning. Additionally, it clarifies that the Minnesota Department of Transportation (Mn/DOT) is responsible for planning and developing passenger rail and gives Mn/DOT similar authority for rail route planning and site acquisition that it has for highways.

Land-use planning
The bill requires the Metropolitan Council to report on land-use and transportation planning strategies that can help reduce air pollution, mitigate congestion, and reduce the cost of infrastructure. This report will help communities better understand the implications that land-use planning has on other public interests. It stems from the discussions surrounding the  Building Sensible Communities bill, which was a key component of Fresh Energy's legislative agenda this year.