Hennepin County takes next steps toward increased funding for transit

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Media contact: Carolyn Marinan, Communications, 612-348-5969

Hennepin County takes next steps toward increased funding for transit

Following last week’s public hearing, the Hennepin County Board of Commissioners will vote tomorrow on a proposed sales tax increase supporting county transit and transportation projects.

“Transit is an essential piece of our transportation network,” said Hennepin County Commissioner and Hennepin County Regional Railroad Authority Chair Peter McLaughlin. “We made it past potential legislative road blocks, and we are moving forward to secure more local funding for key transit projects.

“We have long wanted more reliable, flexible local funding to achieve a successful regional transit system that benefits our residents and businesses. That is what this new sales tax would deliver.”

Proposed sales tax increase

A proposed new half-cent sales tax imposed by Hennepin County would replace the current quarter-cent sales tax by the county for the Counties Transit Improvement Board (CTIB) — for a net quarter-cent increase on taxable goods and services in Hennepin County. A $20 excise tax on new car sales would replace a current CTIB tax, supporting county transit projects.

On May 31, CTIB voted to dissolve its five-county joint powers board and end its quarter-cent sales tax, making way for each individual county to vote in support of the dissolution and impose a replacement sales tax, up to a half-cent under state statute.

Should tomorrow’s vote pass in Hennepin County and the other four CTIB counties, the current quarter-cent sales tax will end on September 30, 2017, and Hennepin County’s half-cent replacement sales tax will begin on October 1, 2017.

Projects eligible to be funded

With the dissolution of CTIB, Hennepin County would be taking on responsibility for funding a larger portion of transit projects located within the county, including CTIB’s 30 percent share of capital costs and 50 percent of net operating costs, plus the state’s 10 percent share of capital costs.

“We are working to step into the shoes of CTIB and the state, and to do this seamlessly, to fund transit lines that come into our county and benefit our entire region,” McLaughlin said.

If the half-cent replacement sales tax takes effect in Hennepin County, the estimated annual county revenue could be as high as $125 million initially. This is projected to be enough to cover the local share of capital and operating costs for the county’s current and future transit lines through 2036.

These transit lines include the current Blue Line, Green Line and Northstar Commuter Rail, and the future Southwest LRT (Green Line Extension), Bottineau LRT (Blue Line Extension), I-35W South BRT (Orange Line) and Riverview Corridor.

Revenues from the sales tax also have the potential to cover county transportation projects and improvements, for example road and bridge work planned in the county’s Capital Improvement Program.

Read the full sales and use transportation tax implementation plan.

Advancing our regional vision

Future transit lines in Hennepin County will require matching funds from the Federal Transit Administration’s New Starts program — up to approximately 50 percent of capital costs on Southwest and Bottineau.

Should those funds be available in 2018 and beyond, Southwest and Bottineau will be well-positioned to receive them. Both projects received medium-high ratings from the FTA in May and have been approved by the FTA to enter the engineering phase of development.

“We are faced with raising our sales tax to shoulder what was to have been a state responsibility when CTIB began. These are tough decisions, but necessary for the promise of projects like Bottineau LRT to become reality,” said Hennepin County Commissioner and Public Works Committee Chair Mike Opat. 

“If we don’t build transit options, our economy and mobility will suffer,” said Hennepin County Board Chair Jan Callison. “Valuable community and economic development opportunities will be lost, our ability to attract and retain workers will be reduced, and our roads will be more congested.” 

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