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Transit Tax Proposal Creates Uncertainty About Southwest LRT’s Next Steps

Supporters have historically pushed for funding in the state’s bonding bills, but a proposed tax increase raises questions about whether that’s the right path this year.

Southwest Light Rail Transit supporters have largely praised the governor’s proposal for a quarter-cent sales tax increase that would set up a dedicated revenue stream for transit, but the proposal has created uncertainty about what the Legislature’s role is in moving the project forward this session.

In the past, Rep. Steve Simon and Sen. Ron Latz, whose districts includes Hopkins and St. Louis Park, have been the chief authors on bills that would have provided money for the project. But Gov. Mark Dayton’s proposal aims to remove transit funding from the hands of the Legislature—where it’s sparked intense debate and faced repeated setbacks.

With Dayton’s proposal still under discussion, though, there’s some confusion about what the Legislature’s role should be with Southwest LRT, the District 46 legislators told the Hopkins City Council on Tuesday.

“It’s a little unclear to me right now where we stand on Southwest Corridor in the sense of whether there will even be a bonding bill this year,” Simon said. “And if there is and if this quarter-cent sales tax passes, do we sort of slowly shift our attention to that? It’s not clear.”

The situation is further complicated because Southwest LRT would soak up most of the dollars from the new transit tax in the beginning. While $118 million remains of the state contribution toward the project, MinnPost estimates the tax would add $106 million annually to the $101 million already being collected with the existing quarter-cent sales tax.

That could force Southwest to compete with other transit projects even with the new tax. Some east metro legislators are already complaining that they’re not getting their share of rail funding, while others across the metro prefer increased bus service.

In all, a study commissioned by a group of Twin Cities business leaders estimated that it would cost $4.4 billion over the next 18 years to fully fund the Metropolitan Council’s 2030 transportation plan.

That wouldn’t all—or even mostly—be paid for with the new tax. The governor’s budget would set aside $348 million in state money over the next two years to pay for roads and highways, in addition to $20 million for transportation projects that aim to create jobs or increase economic competitiveness. 

Still, the demand for transit money is so great that Latz said he prefers to “bite the bullet” an imposed a half-cent increase that would build out the system faster.

“In my book, a quarter-cent still isn’t quite enough,” he said.

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