Sales taxes will now cover Hennepin County's Metro Transit subsidies

Hennepin County is no longer on the hook for the roughly $25 million a year it was spending to subsidize several transit lines, thanks to a change in state law that shifts those costs to a newly increased sales tax.

The County Board is expected to sign off Tuesday on changes to contracts with the Metropolitan Council that end operational subsidies for the Green and Blue light-rail lines, the Northstar commuter rail and Orange Line Bus Rapid Transit.

"That's great news and certainly provides some opportunities for us to do some amazing work moving into the future," said Commissioner Kevin Anderson, who chairs the County Board public works committee.

Starting Oct. 1, a 0.75% increase in sales taxes in the Twin Cities metro will cover the cost of operating the transit lines that Hennepin County started subsidizing in 2017. State officials estimate the tax increase will generate more than $500 million a year for transit.

The shift is part of transit funding changes approved this spring by the Democratic-Farmer-Labor Party led state Legislature. Lawmakers approved two metro sales tax hikes — 0.75% for transit and 0.25% for affordable housing.

Hennepin County had committed to paying 50% of the operating costs of the Blue Line, 30% of the Green Line, 43% of the Orange Line and 9.3% of the Northstar rail.

By ending the subsidies Sept. 30 the county expects to recoup about $3 million it had planned to spend on transit operations and maintenance through the end of the year. The savings comes after the county pays about $3 million in previous Orange Line costs, dating to its opening in 2021, which had not previously been paid.

Ramsey County planned to pay $6 million in Green Line subsidies in 2023, county officials said.

Despite the change, Hennepin County is not done paying for transit projects. Last month, the County Board agreed to help cover 55% of the $272 million shortfall in the Southwest light-rail budget. The money will come from existing sales taxes earmarked for transit projects.

So far, Hennepin County has put more than $1 billion into the new light-rail line, which is expected to begin operations in 2027.

The County Board also is exploring other ways to improve transit options outside of projects that are already underway. Commissioners supported an application for a grant from the state Department of Transportation worth nearly $410,000 to find ways to improve transit options for seniors and people with disabilities throughout Hennepin County.

Dan Soler, county director of transit and mobility, said the grant is designed to improve transit options in communities that do not have regular routes. The grant would fund a mobility manager and the county would create a transit accessibility committee to decide which communities need the most help.

"This is a big, big county and there are a lot of places where we need to get mobility services to people," Solar said.

Commissioners were excited about the grant, saying that there were plenty of gaps in transit services that make it hard to get around without an automobile.

Commissioner Angela Conley said improving transit options or "mobility justice" was important to addressing the county's disparities.

"There are transit deserts in certain places in our county," Conley said.