Hennepin, Ramsey counties raise transit tax

Both Hennepin and Ramsey counties voted Tuesday to increase a sales tax to pay for metro-area transit projects, but the outlook for critical federal transportation funding under the Trump administration appears murky at best.

The action was prompted after Republican state lawmakers balked in recent years at funding expensive metro-centric transit projects, particularly the proposed Southwest and Bottineau light-rail lines.

Faced with an impending shortfall in state money, planners decided to retool the way big transit projects are funded locally. That involves the dissolution of the little-known Counties Transit Improvement Board (CTIB), which currently levies a quarter-cent metro sales tax and a $20 fee for new cars to help pay for transit projects such as the Green Line LRT.

With CTIB disbanding, Hennepin and Ramsey counties increased their transportation tax to a half cent, a move permitted under state law.

In doing so, Hennepin will raise an additional $65 million annually, while Ramsey County will collect about $41 million the first year. The new tax goes into effect Oct. 1.

Hennepin County's 5-2 vote was a bit prickly.

Commissioner Jeff Johnson, a Republican candidate for governor, said his negative vote was the "most-emphatic" one he's cast in eight years. "It's very frustrating the ease at which we raise taxes on our constituents," he said. "This is a $65 million tax increase; it is a big deal."

Hennepin County will assume responsibility for building several new transit lines and operating existing ones — a good number of them operate within the state's most-populous county.

The county will pick up $1.2 billion in costs that were previously covered by CTIB and the state to build the Southwest and Bottineau light-rail lines and part of the Orange Line bus-rapid transit along Interstate 35W and the Riverview line, which would connect Union Depot in St. Paul to the Minneapolis-St. Paul International Airport.

If these lines are built, Hennepin County will pay $53 million more in annual operating costs, in addition to $22 million for the existing Blue and Green LRT and Northstar commuter rail.

Hennepin County officials say these numbers are estimates and will depend on actual tax collections. They also note that the sales tax will be collected from anyone who spends money in the county, not just residents. And the beefed-up sales tax revenue can be used on a variety of transportation projects, including roads and bridges.

Board Chair Jan Callison said the new sales tax would result in an extra $23 to $60 a year for a household earning $37,000. "The right thing is to give people [transportation] choices," she said, offering grudging support for the tax hike. "I wish we did not have to make this choice."

Hennepin County's Regional Railroad Authority has already committed $335 million to build Southwest and Bottineau — money that will be backed by the county's property tax. Metro Transit Deputy General Manager Mark Fuhrmann, who served on a press panel Monday, said $250 million in local money has already been spent on the Southwest and Bottineau lines.

These machinations could be for naught if the Federal Transit Administration's budget is cut in Washington, a possibility under President Trump's spending plan.

Typically, the federal government coughs up half the construction costs for new transit projects, but only after local authorities raise the other half. At a news conference Monday, the American Public Transportation Association said the possible cuts threaten 38 transit projects nationwide.

On Tuesday, Anoka County voted to keep its transportation tax at a quarter cent. The remaining CTIB members, Washington and Dakota counties, are expected to vote on a quarter-cent tax next week.

Janet Moore • 612-673-7752