Crazy Train

October 1, 2012 at 6:37 am Leave a comment

Why is TwinWest obsessed with the Southwest Light Rail project? How can business owners get behind the idea of selling their product for 30 cents when it costs $1 to make?

The Metropolitan Council is proud that they rely on lower subsidies than other metropolitan areas – from Regional Transit Facts:

The Twin Cities region relies less on government subsidies to operate transit than most peer U.S. metro areas. The percent of operating costs covered by fares in this region is 28.6%; the peer average is 23.1%.

In other words, transit is going to cost us lots and lots of money.

Maybe it’s worth it. Maybe there’s a return for all those operating costs.

Nope. Thanks to research by State Senate candidate David Osmekthis MNDOT study shows an expansion project with a cost/benefit ratio greater than one. A related interchange project had a cost/benefit ratio over 4, meaning $4 of calculated value is returned for $1 in costs. On the other hand, the ratio for the Hiawatha Line,published in a November 1999 study, was .42. They knew it wasn’t worth it BEFORE it was built.

We’re in the same situation with the Southwest Line: it will cost taxpayers a ton of money without benefit to them.

And it gets worse. TwinWest parrots the MetCouncil’s claim that the state can leverage $1 into $9 of additional funding. However, half of the $1.25 billion estimated cost comes from Minnesota: 10% from the state (there’s your “$1″); 10% from the Hennepin County Rail Authority; 30% from the Counties Transit Improvement Board. The CTIB is funded by the quarter-cent tax on everything subject to the state’s sales tax. The HCRA is mostly funded by … property taxes. In 2009, 85% of HCRA’s revenue was from property taxes. I doubt many of those 64% who said they favored funding the Southwest Line knew their property taxes will also be paying for it.

From small-town ice arenas to major-league Ballporks, legislators approve these projects to claim they “got something done.” They are afraid to say ‘no’ and jeopardize their re-election. But these projects concentrate benefits into the hands of a few, and pass along the costs to everyone in the state. We need elected officials who have the courage to prioritize state spending. And that means being able to say no to projects that do not yield benefits for their costs.


Entry filed under: Transportation. Tags: , , , , , , , .

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