One of the arguments for light rail is that it is supposed to have lower operating costs than buses. But Minneapolis’ Hiawatha light rail is losing so much money that Hennepin County wants a region-wide sales tax to cover the costs of what Minnesota Governor Pawlenty calls “these very expensive transit projects.” The feds were subsidizing it with a $10 million grant, but that ended last year.
This one 11.6-mile light-rail line costs more than $20 million a year to operate. Farebox revenues cover only about a third of that. Half the rest is paid by the state of Minnesota and most of the other half comes from Hennepin County property taxes.
The light-rail line does not go outside of Hennepin County, so clearly most riders are residents of that county. But some commuters from Dakota and other nearby counties drive to park-and-ride stations and use the rail line. “There is no rational basis why the property taxpayers in Hennepin County ought to be paying for people from Dakota County to use the LRT line,” says one official.
But are they? Half the operating costs are paid by state taxpayers, including taxpayers from Dakota County. All of the construction costs were paid by federal and state taxpayers, including taxpayers from Dakota County. Considering the subsidies Hennepin County transit riders have received, they should pay Dakota County riders to take the train.