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How paying higher taxes to fund transit could save you money

Improved transit services might make it possible to downsize from two cars to one, or even from one car to none if we live in an area well served by efficient transit.

The legislature is buzzing with transportation funding proposals. The Republican plan proposes no new revenue streams while the DFL plan contains a variety of tax and fee increases to pay for system fixes and expansion. logo

One point of contention is the DFL’s proposed one percent metro area sales tax to raise money for transit. Republicans and allies like the Minnesota Jobs Coalition balk at the idea, claiming it will put undue pressure on the middle class.

But a one percent sales tax could actually save many middle class metro residents hundreds or thousands of dollars a year and improve everyone’s quality of life.

I think about paying taxes to fund transit (or anything, really) like paying for any other good or service – we should consider what we get for our investment. What does a one percent sales tax cost the average metro citizen and what does that citizen receive in return?

A possible map of our future transit system, only possible in an “Increased Revenue Scenario” according to the Met Council’s 2040 Transportation Policy Plan.

The DFL plan will cost each metro-area resident an average $90 per year, not a totally insignificant amount of money. So what do we get for it? We get improved transit services that might make it possible to downsize from two cars to one, or even from one car to none if we live in an area well served by efficient transit.

Getting rid of a car can save people a lot of money. According to AAA, the average annual cost of owning a car in 2014 was $8876. The most expensive unlimited transit pass you can purchase from Metro Transit comes to $1362 annually. This means if you can swap a car for an all-access unlimited transit pass you can save more than $7000 per year. For just $90.

Even metro taxpayers who cannot make the switch to transit save money if transit improves because other people switching to transit lowers overall congestion. Congestion costs each individual Twin Cities driver $695 per year in fuel costs according to the Texas A&M Transportation Institute (this is a 2011 number, their most recent data). Slightly reducing congestion can dramatically increase speeds and save fuel – we have all seen this happen when highway speeds leap after passing one small exit.

Additionally, any increase in transit use reduces pollution in the air we breathe and lowers our greenhouse gas output. This lowers non-transportation costs, like healthcare spending, and helps make people’s everyday lives better.

Paying $90 per year to increase transportation choices and ease congestion in our region is worth it. I would argue it is worth paying even more in the short term. The faster we can build a quality transit system, the faster we can make people’s lives better by saving them money to spend on local goods and services instead of foreign oil and cars.

Transit funding cannot be spent willy-nilly, however. Drivers will only be willing to switch to transit if it is fast and goes places people want to go. This means investing in a network that serves dense areas of housing and employment where maximum numbers of people can get out of their cars and onto transit. It means investing in transit where people can walk or bike to the line instead of driving to a park-and-ride.

Governor Dayton just appointed Adam Duininck as chair of the Met Council board, the institution that governs Metro Transit. Duininck is a transit user and understands smart transit investments. Here’s hoping he has money to make those investments.

This post was written by Sam Rockwell and originally published on Follow on Twitter: @streetsmn.

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Comments (7)

  1. Submitted by Richard Callahan on 01/20/2015 - 11:43 am.

    It depends

    on how the transit money is spent. The billion dollar Green Line for example does nothing to reduce the only real congestion in the area – rush hour I94. One could argue that it makes it worse by eliminating the express bus that used to go down I94. It will spur development of apartments and restaurants along University Avenue, but at the cost of displacing all the businesses that are there now. With all the parking on University gone, it would be hard to develop any kind of retail business.

    Another way to look at it is that for the cost of the Green Line, 1,000 businesses along University could have each been given $1,000,000 to grow.

  2. Submitted by Todd Hintz on 01/20/2015 - 12:10 pm.

    Green Line

    Why do you get the impression the eliminating parking on University would also eliminate businesses? Sure, there will be some customers who don’t bother to stop because there isn’t a parking space right out front, but most will simply park around the corner and hoof it half a block in.

    Not to mention all the new customers who are brought in via…train.

    What’s more likely to happen is you’ll see long established businesses leave as their rent goes up because the property is now more valuable due to the train. That’s a bummer, but that’s market reality. I already miss some of my old haunts on University, like Capital City Hats. Others though like Midway Bookstore may see a big jump in business as people at nearby stations pop in to take a look around.

    • Submitted by Richard Callahan on 01/20/2015 - 03:24 pm.

      The train only stops every quarter or half mile so I don’t see too many riders frequenting the businesses in between. I expect more high end apartment buildings with some restaurants and coffee shops at these major intersections. In between I see more big box stores, health clinics, financial institutions, and subsidized non-profits, all with their vaguely historical brick facades and huge asphalt parking lots. It will look like Eden Prairie.

      As for Midway Book, that corner is far too valuable for any small business. It will be an apartment complex with an anchor store below it some day, much like the apartment/Whole Foods complex going up on Selby and Snelling.

      But back to the main point. Transit is necessary and it’s good, but it has to be done smartly. Instead of a high speed train down the middle of I94 where it would have done some good, we have a horrible compromise down the middle of University where it eliminated parking and bicycling and will transform the neighborhoods into something not neighborhoods.

  3. Submitted by Ron Gotzman on 01/20/2015 - 12:21 pm.


    The amount of effort that is put forth to spin “tax and spend” policies is truly amazing.

  4. Submitted by David Markle on 01/20/2015 - 12:45 pm.

    Look at the details

    I agree with Mr. Callahan; the merits of the proposed taxation must be judged by the results. We spent a billion dollars of tax money and should have gotten LRT along the freeway, tunneled in downtowns and at the U of MN. Then the train could have run as a train, fast enough to serve the region. A relatively inexpensive streetcar line on University Avenue would have remained an additional worthwhile possibility.

    As the Governor makes new appointments to the Met Council, we should remember how the Council shirked its duty to the region regarding the Green Line, not to mention the bad way they’ve handled the SW Corridor project. We need an ELECTED Met Council for greater transparency, better accountability, and appropriate authority.

    By the way, the owner of the Midway Bookstore was a dedicated opponent of the University Avenue LRT plan.

    • Submitted by Todd Hintz on 01/21/2015 - 12:07 pm.


      Having an elected Met Council is a non-starter. All that would do is turn the Met into a mini legislature, divided along political lines and accomplishing nothing. The whole reason the Met was created in the first place was to circumvent all the silly politics of the hundreds of entities it encompasses.

      If you don’t like the people on the council the solution is easy: vote your guy in for governor.

  5. Submitted by Dennis Tester on 01/20/2015 - 09:17 pm.

    Here’s what you do:

    Calculate how much money it takes to run a line, divide that number by the number of projected passengers, then charge a fare equal to that number.

    People using the service have skin in the game and feel good about themselves about pulling their own weight, and people who aren’t interested in that service are left alone.

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