Gov Dayton Bypasses Legislature on Southwest Light Rail

A week ago, Governor Dayton and legislative Democrats walked away from special session negotiations and agreements on tax relief and bonding over their insistence on a funding mechanism for Southwest Light Rail Transit (SWLRT).

On August 25, Governor Dayton hastily convened a meeting with Metropolitan Council Chair Adam Duininck, local elected officials, legislators and other community representatives.  At the meeting, Governor Dayton unveiled a new proposal to go around the legislature and fund the state's share of the Southwest Light Rail project.

The Governor, Chair Duininck and Counties Transit Improvement Board (CTIB) Chair/Hennepin County Commissioner Peter McLaughlin made clear it is their intention to pursue this funding strategy even though it will commit taxpayers statewide to tens of millions in permanent operating losses, as well as likely property tax increases for Hennepin County.

Republican Plans Would Have Benefitted All of Minnesota

Republican-sponsored bills in the 2016 regular session put Minnesotans first by pushing for tax relief and safer roads with less congestion

Unfortunately, Democrats rejected tax relief and safer roads that benefit many for a controversial SWLRT project that only benefits a few—especially given that they planned on proceeding with the controversial train regardless of the legislative outcome.

What was lost when Dayton rejected the Special Session

  • Tax Relief: Governor Dayton promised he would not hold the tax bill hostage to other special session negotiations and broke his word with a veto earlier this year. By not agreeing to a special session, more than $800 million in tax cuts over the next three years, including over half a billion in ongoing and permanent tax relief, will not become law. This bill passed with strong, bipartisan support from 89 percent of the legislature and included tax relief for farmers, veterans, families, college graduates and small businesses.
  • Bonding and Transportation: More than $700 million in road and bridge funding, including key regional projects like Hwy 14, Hwy 23 and Hwy 12 will not be funded. In addition to roads and bridges, the bonding bill invested in smart-transit options including funding the State’s share for the Orange Line Bus Rapid Transit connecting Minneapolis, Richfield, Bloomington, and Burnsville and needed upgrades to the transit hub at Mall of America. Furthermore, important water quality and infrastructure projects in communities statewide will also go unfunded.

Dayton's Proposal Likely Funds SWLRT from Motor Vehicle Sales Taxes, Bus Rapid Transit, and Hennepin County Property Taxes 

Governor Dayton’s new proposal, unveiled on August 25, goes around the legislature to fund the state's share of the Southwest Light Rail project.  In his plan, taxpayers would be forced to contribute $144.5 million in order to secure the federal match. The breakdown is as follows:

  • $103.5 million Certificates of Participation (COPs). The Met Council and CTIB would issue certificates of participation (bonds) that are backed by constitutionally-dedicated Motor Vehicle Sales Tax revenues. The Governor's plan calls for $91.75 million in Met Council-issued COPs, and $11.75 million in CTIB-issued COPs. The bonds would not have to be issued until July of 2017.
  • $20.5 million cash from CTIB. This may take away funds from other projects like the proposed Orange Line Bus Rapid Transit and others. 
  • $20.5 million cash from Hennepin County Regional Railroad Authority (HCRRA). HCRRA funds come from property taxes. Barring a major cut to other spending, a property tax increase on Hennepin County taxpayers would likely be required in order to pay for the HCRRA portion of the funding. The $20.5 million figure still falls below the state-mandated 10% funding cap.

In the meeting, Chair Duininck refused to give a direct answer whether the federal funding would come before the pending lawsuit (set for a September 2017 jury trial) is settled.  If federal funding may not be released until the pending legal issues are resolved, why are Gov Dayton and the Met Council pushing so hard to bypass the legislature?

For additional background and clarifications, read the well-written opinion piece by GOP Rep. Davids (Taxes Chair) and GOP Rep. Torkelson (Capital Investment Chair) in the August 25, 2016 edition of the Star Tribune [Counterpoint: Dayton chooses light rail over good legislation].

Thanks to Susan Closmore, Director of Public Affairs, House Republican Caucus for much of the detail in this article. 

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