State and local governments are facing an historic budget crunch that is affecting all governmental expenditures. This is especially true in the field of public transit. Transit service has been cut nationwide during the current recession.
Metro Transit is the main transit provider for the Twin Cities Metropolitan region. In 2008, Metro Transit spent $229 million on bus operating costs, almost $30 million on light rail, $32 million on Metro Mobility, and $1.3 million for vanpools (2009 Met Council Performance Evaluation). Regionally, $272 million was spent on bus operating costs and $345 million was spent on the entire transit system in 2008. Of the $272 million spent on bus operating costs, 69 percent was spent on urban local buses.
Comparison to other Metros
From 2005-2008, transit costs rose 18 percent in the Twin Cities and 23 percent in the 11 peer regions (2009 Met Council Performance Evaluation). Moreover, the Twin Cities region spends less money on transit per capita than the average for the peer regions. The Twin Cities’ 19.9 miles of transit per capita is slightly below the peer region average of 20.7. For the Midwest region,
Funding for Transit
Metro transit gets a mixture of funds from the states, motor vehicle sales tax, transit fares, and federal grants. Nationwide, 33 percent of transit funding comes from local sources for transit. If one were to include fares and other sources, 67 percent of funding for transit is from local sources (TCRP 129). Also, transit agencies get 33 percent of their revenue from the farebox. The Twin Cities however only gets 29 percent of its funding from the farebox (2009 Met Council Performance Evaluation).
Suggestions for future funding
The region should move away from the perverse incentives of funding transit through motor vehicle sales tax. With this in place, transit funding is subject to the volatility of motor vehicle sales. During the current recession and with the price of gas skyrocketing, car sales dropped drastically leading to less revenue for transit (2030 Transportation Policy Plan).