In early 2008, after years of failed attempts, the Minnesota Legislature passed a significant transportation funding bill aimed at reversing the decline in state road and bridge conditions, metro area mobility, and transit corridor funding.  The bill had enough support to survive a veto by the Governor.

A major transit revenue generator will be a 1/4 cent metro area sales tax, subject to approval by the core 7 metro area counties, that will be distributed by a joint powers board to build and operate regional transit corridors.  5 of the 7 metro area counties have voted to implement the tax and join the board (Scott and Carver Counties being the hold-outs).

Below is an idea of mine on what could be done with the 1/4 cent sales tax through 2030.  This is a very rough idea, and some of my numbers below could be off.  There are several assumptions I've made:

• My figures do not take inflation into account.  As the sales tax is responsive to inflation (as opposed to a fixed tax like the gas tax), it is hoped that as inflation increases, sales tax revenue will increase, making up for any potential shortfall.
• My figures do not take bonding into account.  It is likely that with most projects, the joint powers board would issue bonds, to be repaid by the sales tax revenue.  While this may provide financial benefits (since the bond interest rate is likely to be less than current construction-industry inflation), I do not attempt to calculate such benefits here for the interest of simplicity.  Plus, I would rather overestimate the cost of a project than underestimate.
• Some suggest that the tax could bring in $100 million or more per year.  Given that the language of the funding bill includes transit corridor operations as a use for the tax revenue, and also mandates the first $31 million of tax revenue to be directed to Metro Transit for operating expenses (thus already setting a precedent), I think $75 million per year is a good figure for transit corridor construction.
• Based in part on current reports and projections, I am assuming that the sales tax revenue would be used for one-third (33%) of the cost of a given project.  This also assumes that Federal transit funding is available to pay for half of a given project (based on the current New Starts program), and that a combination of state funding and local funding covers the remainder.
• Except where specified below, I am assuming an overall cost of $100 million per mile for LRT, $25 million per mile for streetcars, $10 million per mile for commuter rail, and $200 million per corridor for BRT.
• I have excluded 2008 from my funding assumptions, given that the tax will not be in effect for the full year, plus the above-mentioned $31 million redirection to Metro Transit.  This leaves 22 years between 2009 and 2030.

This results in $75 million per year * 22 years * 3 (for other revenue sources) = $4,950 million.  For simplicity, we can assume around $5 billion will be available for corridor construction through 2030.

Here's my thoughts on what should be constructed with that $5 billion, arranged by mode:

I will come up with maps as part of a future update.

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Page last modified 31 October, 2009