By a 47-18 margin, the Minnesota State Senate passed a $73 million property tax increase on metro area homeowners to help plug a $75 million dollar hole in Metro Transit’s budget. (Pioneer Press: “Minnesota Senate votes for property tax increase to fund Metro Transit” April 24, 2009)
“This should not be a surprise,” says Minnesota Free Market Institute senior policy fellow Craig Westover. “In March of 2008, Rep. Bernie Lieder, chief architect of the tax-laden transportation bill that passed over the governor’s veto, told the Civic Caucus that if the newly enacted transit sales tax fell short of meeting required subsides for transit, then counties should look to property taxes to make up operating shortfalls and not come to the state – despite the sales pitch that a new sales tax dedicated to transit would provide property tax relief.”
Westover notes that property tax relief was the same pitch made in 2001 when the Legislature dedicated the state motor vehicle sales tax to highways and transit – with a cap on the percentage that can be spent on highways and a minimum percentage that must be spent on transit. When auto sales dipped, and vehicle sales tax wasn’t enough to support transit, the Legislature added the transit sales tax. That’s still not enough to support Metro Transit, and it has yet to incur the projected operational losses of the Central Corridor light rail line.
“So now we find ourselves spending motor vehicle sales tax AND the new transit sales tax on public transit and public transit is still running an operational deficit,” said Westover. “The Legislature is on the verge of adding a property tax increase to cover the transit deficit, and a raft of new public transit projects are on the drawing board – none of which is projected to come close to a breakeven operating cost.
“The simple fact is the Met Council’s transit expansion plans are unsustainable without a massive infusion of new taxes.”