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Plan to kill regional transit board moves closer to reality

Dissolving the Counties Transportation Improvement Board would allow counties in the Twin Cities to fund transit projects — without any money from the state of Minnesota.

At its regular meeting Wednesday in St. Paul, CTIB officials agreed to meet again March 3, when a resolution to dissolve the agency will be voted on.
MinnPost photo by Bill Kelley

So it turns out that a novel move to save future mass transit lines in the Twin Cities — by dissolving the Counties Transit Improvement Board — might actually happen.

CTIB is the five-county entity (it represents Anoka, Dakota, Hennepin, Ramsey and Washington counties) that collects a quarter-percent sales tax to build new transit lines in the metro. Earlier this year, CTIB officials floated a plan to kill off the entity, which — thanks to a quirk in state law — would actually allow each of the participating counties to double their local transit sales taxes. The extra money collected would be enough over the next decade to cover the entire non-federal share of projects planned for the metro, including Southwest LRT, the Bottineau light rail extension and the Gateway bus rapid transit.

A month after CTIB commissioners disagreed over the particulars of the plan, an agreement appears to have been reached. At its regular meeting Wednesday in St. Paul, CTIB officials agreed to meet again March 3, when a resolution to dissolve the agency will be voted on.

Board Chair Peter McLaughlin, a Hennepin County commissioner, said he had hoped to vote this week on the plan, but that working out the details of how the board meets its current funding obligations with its current revenue has been difficult. “When this first came up, I said it was complicated and I’m sticking with that,” McLaughlin said.

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A significant hurdle was surmounted Wednesday when Anoka County representatives on the CTIB board said they would support dissolution. “If Anoka County couldn’t get what we thought we deserved in a dissolution, we would stay in [CTIB],” said Commissioner Scott Schulte after Wednesday’s meeting. “But as negotiations go on, it appears as though Anoka County will get what we need to exit gracefully.”

Anoka Commissioner Matt Look, who voted against a January resolution to begin the dissolution process, said he was concerned that the list of projects that would be funded with CTIB’s most recent sales tax collections favored Hennepin and Ramsey counties, suggesting that commissioners from those counties knew that dissolution was in the works and their projects were positioned for the final batch of grants last month and this month. He compared that to “insider trading.”

“It’s a negotiation,” Look said. “They presented their first position and it wasn’t acceptable to us.”

But as negotiations continued, he said Anoka’s position improved enough that he can agree to dissolution. “That’s helped to move the ball in terms of where we need to be to come to an agreeable divorce if you will.”

How it would work

County commissioners in each of the five counties will have to approve the dissolution of the joint powers agreement that formed CTIB. Once that happens, CTIB must go through a process of ending the collection of the existing quarter-cent sales tax, pay off financing obligations and close the entity. That could happen by March 31, when CTIB would notify the state to stop collecting the existing sales taxes.

Board Chair Peter McLaughlin
MinnPost file photo by Bill Kelley
Board Chair Peter McLaughlin

Before the individual counties can impose their new sales taxes, they must hold public hearings. Those would be held by the end of March, after which each county would vote on the dissolution and impose their county only taxes. The plan is to start collecting those taxes the day after the current CTIB-related sales taxes are ended, which could be June 30.

And though each of the counties currently in CTIB would be able to collect the extra funds, the most likely result is that only Hennepin and Ramsey counties would collect the full half-cent of sales tax allowed under state law, devoting the increased revenue to future projects. In Hennepin county, the money would go toward the Southwest LRT extension of the Green Line and the Bottineau extension of the Blue Line. In Ramsey, the money would fund the bus rapid transit project known as the Rush Line and the Riverview Corridor, the rail or BRT line from St. Paul to Minneapolis-St. Paul International Airport.

Anoka County’s Schulte said he thinks his fellow commissioners will vote to impose a quarter-cent tax — the same level it now collects for CTIB — because it must continue to cover half of the annual operating costs of the Northstar commuter rail service from Big Lake to Target Center. He said he didn’t expect commissioners would take advantage of the other quarter cent.

Washington County is also expected to replace the current CTIB quarter cent with a like amount, with the revenue used for projects such as the Gateway BRT, which would run in dedicated lanes along I-94 from Woodbury to downtown St. Paul.

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Even before the idea to dissolved CTIB surfaced, Dakota County was moving to get out of CTIB. Commissioners there argued that the county hadn’t gotten a fair share of projects, but the dissolution would shorten the time it would have to continue chipping in for already approved CTIB obligations by 18 months.

GOP opposition

CTIB has been the largest non-federal funder of projects such as the Green Line light rail. After the federal government paid half the construction costs, CTIB covered another 30 percent, while the regional rail authorities of the counties served by new lines paid 10 percent. The state of Minnesota also chipped in 10 percent.

But it has been the reluctance of Republicans in the Legislature to continue that 10 percent distribution for transit projects that led to the kill-CTIB-to-save-transit strategy.

There are still funding issues for regional transit, namely shortfalls in Metro Transit’s operating budget and the growing cost of Metro Mobility, a federally mandate ride service for the disabled. And the additional quarter-cent that would come via CTIB dissolution is less than what the five counties might have had access to had a bill pushed last year by Gov. Mark Dayton passed. Dayton wanted the five counties to have up to three-quarters of a cent in sales tax capacity along with other revenue in return for taking over both the future capital costs of new transit lines as well as all of the operating costs.

Currently, the state pays half of the operating subsidy for the Green and Blue lines with CTIB picking up the other half. Under the dissolution plan, individual counties served by lines would pay half of the operating costs while the state would continue to pay the other half.

It is that expectation of the state continuing to share operating costs — not only for existing lines that the state had agreed to and helped fund but future lines as well — that has riled some Republicans in the Legislature.

Regional transit map
East Metro Strong
Regional transit map

One proposal (HF 800), authored by Rep. Jim Nash, R-Waconia, would renew the state’s commitment to cover half of the operating costs — but only for lines that are up and running when the bill passes. Only if the state pays some of the capital costs of future lines would they be eligible for the operating-cost share. The bill makes clear that extensions of existing lines would be considered as new and separate projects.

Another bill (HF 1160) by Rep. Linda Runbeck, R-Circle Pines, would require a separate audit of the financial activity of the Met Council’s transportation division and CTIB, and includes a provision that the first audit must cover the first quarter of 2017 and that counties within CTIB could not vote to dissolve the group “until at least four weeks after submission” of the audit.

Gov. Mark Dayton would be unlikely to sign such provisions. And if the audit bill was somehow contained in an end-of-session omnibus bill that Dayton decided to sign because of unrelated provisions, CTIB might already be dissolved by then. Met Council Chair Adam Duininck termed the audit bill “moot” because of the timing.

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Still, the bills illustrate how some in the Legislature are looking for ways to slow or halt the dissolution strategy. Nash’s bill, for example, reflects sentiments made clear during a joint meeting of transportation committees at the Legislature last month. If the state isn’t part of the decision-making on new lines, it shouldn’t be required to cover operating costs of those lines.

Duininck said his response to that bill depends on the intentions of sponsors. “If the point of the legislation is just to be a financial hit to our agency, I would ask the governor to veto the bill,” Duininck said. “But if the point is to have a policy discussion about how does CTIB interact with the Legislature and the state, then we just have to have that conversation.”

McLaughlin said the Green and Blue line extensions won’t be accepting passengers until 2021 or 2022 so there is time to work out the future operating costs of those lines and the share among governments. But he said he is confident that Dayton will act to support the CTIB dissolution and the construction of Southwest and Bottineau.