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A bus gap: Are fancy suburban bus lines taking taxpayers for a ride?

Income disparity between rich and poor has been growing in this country for nearly four decades, so it comes as no shock that a two-class system has taken hold in Twin Cities bus service.

The Minnesota Valley Transit Authority offers a transit experience to match the incomes and expectations of their higher-end customers.
MinnPost photo by Steve Berg
The Minnesota Valley Transit Authority offers a transit experience to match the incomes and expectations of their higher-end customers.

Income disparity between rich and poor has been growing in this country for nearly four decades, so it comes as no shock that a two-class system has taken hold in Twin Cities bus service.

Metro Transit provides dependable, no-frills trips throughout region, concentrating most intensely on high-volume inner-city routes that rattle along bumpy urban streets. In that sense, Metro Transit is the workhorse.

But there’s a show horse, too. Several of the half-dozen suburban “opt-outs” have evolved into premium bus lines. Two agencies in particular — SouthWest Transit and Minnesota Valley Transit Authority (MVTA) — offer a transit experience to match the incomes and expectations of their higher-end customers. Coach-style buses are tidy and comfortable, with cupholders and reclining seats. Stations are clean and well-lighted, some of them with gourmet coffee and impressive landscaping. For a city rider to experience a trip on a sleek SouthWest coach from the agency’s nicely appointed station on Technology Drive in Eden Prairie is a bit like trading a White Castle slider for a steak at Kincaid’s.

The disparity wouldn’t raise eyebrows if the suburban opt-outs were paying their own way, but apparently they’re not. In this case it’s pretty clear that the haves are riding on the backs of the have-nots, that taxpayers are serving up a higher level of subsidy to the show horses than to the workhorses.

Suburban opt-outs
Consider the numbers. According to the Metropolitan Council, the opt-outs get about 15 percent of the region’s transit dollars but provide only 6 percent of the service. Even when the service is of a similar type — say, long-distance express routes — the suburban opt-outs’ subsidy is higher per passenger. In the case of SouthWest, it’s nearly twice as high — $4.02 compared to $2.38 for Metro Transit express routes.

Including all types of service, taxpayers are subsidizing the opt-outs at $4.02 per passenger compared to $2.26 for Metro Transit. And SouthWest is costing more, coming in at $5.17.

The question is, why? The Legislative Auditor is looking for an answer and expects to issue a report by the end of the year.

It’s not that the metro area has a terribly wasteful bus system. On the contrary, many regions would envy its ability to draw one-third of operating revenues from fares. Still, the Twin Cities is not immune from the critical operating shortfalls that beset transit operators nationwide, due mainly to falling tax revenues. And it’s the source of those revenues that begin to explain this region’s disparity problem.

Major service cuts in the late 1970s drove a number of suburban communities to break away from the metro transit compact and start separate bus lines. These “opt-outs” relied on property tax levies for bus operations, as did Metro Transit’s predecessor agency.

But that changed in 2001 when the Legislature shifted funding to the Motor Vehicle Sales Tax (MVST). That was a bad idea. First came the irony: transit revenue growth would depend on the increased sales of competing vehicles — cars. Then came declining car sales and slumping MVST revenues, which have failed every year since 2004 to meet projections.

State Rep. Alice Hausman
State Rep. Alice Hausman

State Rep. Alice Hausman, DFL-St. Paul, said another mistake was the Legislature’s failure to dissolve the opt-outs when the funding source changed. Not only did the suburban lines survive, they used their political clout to aggressively negotiate an advantageous slice of the new metro-wide revenue pie. Hausman accuses SouthWest and MVTA, especially, of “empire building” — adding staff, facilities and equipment that duplicated Metro Transit’s efforts. The result, she said, has been a lack of efficiency and equity as well as a mishmash of transit governance that she hopes the Legislative Auditor can help untangle.

Politics also played a part. Conservative forces normally hostile to government subsidies have been strangely silent as Republican areas in the southern and western suburbs benefit disproportionally.

SouthWest Transit’s CEO, Len Simich, responded to the criticism recently in a lengthy piece published in some of the Star Tribune’s zoned editions.

While not disputing the subsidy-per-passenger statistics, Simich said the numbers fail to account for some very long commuter routes that push up SouthWest’s costs. He said also that the amenities his agency offers have attracted riders, and that that’s a good investment for the region.

Hausman insists her motives are not to harm the suburban lines but to “lift all boats” — or, perhaps, all buses. The issue of racial inequity has not arisen, she said, responding to a question. And she will not raise it, she added. But one Metro Transit official called the situation “a civil rights lawsuit waiting to happen.”

Transit provider

Type of service

Passengers

Subsidy per passenger

Cost per revenue hour

Fare recovery

Metro Transit

Express

8,304,000

$2.38

$152.88

46.1%

Metro Transit

Total

73,392,000

$2.26

$110.85

30.4%

Suburban

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opt-outs

Express

4,184,000

$2.71

$173.56

46.2%

Suburban

Opt-outs

Total

5,169,700

$402

$156.19

34.1%

     SouthWest

Express

   992,000

$4.02

$186.39

36.7%

     SouthWest

Total

1,147,000

$5.17

$178.03

30.3%

     MVTA 

Express

1,865,000

$2.16

$167.74

51.7%

     MVTA

Total

2,596,000

$3.96

$146.73

32.7%

Source: Metropolitan Council, 2008 figures