Hennepin County’s light rail tab grows

File photo

Take a look at the pie charts the Metropolitan Council uses to show where the money to build the $1.86-billion Southwest Light Rail Transit Project is coming from and it appears Hennepin County’s share has grown significantly since just last fall.

As it stands now, Hennepin County’s contribution to SWLRT — a 14.5-mile extension of the Metro Green Line into the southwest suburbs — is second only to that of the federal government, which is expected to cover half of construction costs through a $928.8-million Federal Transit Administration grant. The county’s slice of the SWLRT funding pie is worth nearly $656.65 million, a total that includes funds to be paid out by both the county and the Hennepin County Regional Railroad Authority, as well as the value of HCRRA’s in-kind land transfers to the project.

That slice is about two-and-a-half-times larger than it was just last fall, amounting to a 35-percent stake in the project. In large part, that’s due to the impending breakup of the Counties Transit Improvement Board.

As of June, all five CTIB member counties — Anoka, Dakota, Hennepin, Ramsey and Washington — had agreed to end their nine-year collaboration on metro-area transit projects and to divide the board’s assets and obligations among themselves. Hennepin County agreed to take on most of CTIB’s share of SWLRT construction costs, an amount totaling $290.1 million.

CTIB, which previously was supposed to pay for about 28 percent of SWLRT construction costs, will now fund closer to 12 percent of the cost to add tracks and stations between Minneapolis and Eden Prairie.

Another $103.5 million was added to Hennepin County’s tab this spring when it agreed to relieve the Metropolitan Council and CTIB of their obligation to use a type of bonding, called certificates of participation, to cover a shortfall in state funding for the project.

While it appears the funding burden has shifted significantly onto Hennepin County taxpayers, Hennepin County Commissioner Peter McLaughlin (who also chairs CTIB) said the pie charts alone “don’t tell the whole story.”

“It misrepresents, I would argue, the incremental payment that Hennepin County taxpayers will be making, because they were going to be paying most of the CTIB contribution before,” McLaughlin said.

State law allowed CTIB to levy a quarter-cent sales tax and a $20 motor-vehicle sales tax in all five of its member counties. Sales in Hennepin County alone generated more than 55 percent of CTIB’s tax revenue, McLaughlin noted.

In June, the Hennepin County Board voted to replace the CTIB tax with its own half-cent sales tax by this fall, as allowed under state law. It’s expected to raise $125 million annually for transit, road and bridge projects.

Swapping one tax for the other amounts to an additional 5 cents on a $20 purchase within Hennepin County’s borders. The Hennepin County Railroad Authority is funded by a property tax levy, and its contribution to the project is unchanged.

SWLRT is just one part of a growing transit network that CTIB played a key role in planning and building. McLaughlin noted the breakup means none of the county’s tax dollars will be used to pay for two east-metro transitways still in development: the Rush Line and Gateway corridors, both bus rapid transit projects.

But CTIB didn’t just build transitways; it also covered half of ongoing operating costs for its metro-area bus and light-rail projects, with the state generally paying for the rest. Those obligations also pass to the counties when CTIB goes away.

On the existing segment of the METRO Green Line, linking the downtowns of Minneapolis and St. Paul, Hennepin and Ramsey counties agreed to split CTIB’s half of operating costs 60-40, respectively.

The transportation bill passed out of the legislature and signed by Gov. Mark Dayton this spring prohibits the state funds from being used for operating costs on SWLRT. That means Hennepin County will pay 100 percent of operating costs not covered by fares on that segment of the line, estimated at about $30 million per year in the mid-2020s, McLaughlin said, adding that there was still time to negotiate a better deal before then.