Citizens League Report Getting From Here to There: Funding Transit in the Region Prepared by Citizens League Transit Study Committee, 2016-2017 Approved by Citizens League Board of Directors February 2, 2017 Citizens League 400 N Robert Street #1820 St. Paul, MN 55101 1 The Citizens League dedicates this report to the memory of Verne C. Johnson Executive Director of the Citizens League from 1958-1967. This report was made possible by the generous support from the Verne C. Johnson Family Foundation All Transit Study Committee members contributed to the report, but the Citizens League would like to extend a special thank you to the following members for their additional contributions to this report: Peter Bell James Erkel Peter McLaughlin William Schreiber Patty Thorsen Nancy Tyra-Lukens 2 TABLE OF CONTENTS INTRODUCTION ....................................................................................................................................... 4 EXECUTIVE SUMMARY ........................................................................................................................ 5 WORK OF THE CITIZENS LEAGUE TRANSIT STUDY COMMITTEE ........................................ 9 TRANSIT STUDY COMMITTEE AND PROCEDURES ...................................................................................... 9 MEMBERSHIP OF THE TRANSIT STUDY COMMITTEE .............................................................................. 10 BACKGROUND AND CONTEXT: TRANSIT IN TRANSITION IN MINNESOTA ...................... 11 SIGNIFICANT TRANSIT CHANGES IN THE PAST 25 YEARS ...................................................................... 11 CURRENT GOVERNANCE AND PLANNING STRUCTURE FOR TRANSIT ................................................... 14 DEMOGRAPHICS, ECONOMICS, AND MAXIMIZING MOBILITY ................................................................ 21 ANALYSIS OF TRANSIT FUNDING ISSUES ..................................................................................... 25 SUMMARY OF TRANSIT STUDY COMMITTEE DISCUSSIONS .................................................................... 25 TRANSIT FUNDING PROBLEM STATEMENTS AND RECOMMENDATIONS ........................ 28 APPENDIX ................................................................................................................................................ 31 BACKGROUND: STUDY COMMITTEE MEMBER COMMENTS, STUDY COMMITTEE MEMBER BIOS, CITIZENS LEAGUE BOARD MEMBERS, TRANSPORTATION GLOSSARY OF TERMS AND MEETING MINUTES..................................................................................................................................................... 31 3 INTRODUCTION A conversation about transit and certainly transit financing, is a microcosm of the larger political and policy debates and dilemmas taking place on a wide range of issues. Anyone following this current discussion in Minnesota knows that the issue of financing the future of transportation in general and transit in particular has become so contentious that it has prevented resolution of other important policy topics at the legislature. There is much to be learned and gained from asking tough questions about how the Greater Minneapolis- St. Paul region should fund the future of transit, as this Citizens League study committee has done. The need to define and redefine key concepts. For example, “transit” is not a specific mode of transportation (e.g. trains or buses). As a Citizens League report said in 1973, “‘transit’ is riding” – as simple as being a passenger, and takes many forms. This past definition is critical to understanding the future of transit. That said, “transit” should also consider first- and last-mile connections via biking or walking—the critical links from the initial doorstep to actual riding to the final destination. The impact of demographics on public policy. The aging of the baby boomers, with their departure from the workforce and the loss of driving capacity as people age, live longer and more independently, will impact all aspects of the economy and society. Mobility will become more important for economic and social reasons as our society goes through this unprecedented demographic change. The need to improve the connection between workers and jobs. Declines in workforce growth; increases in concentrations of poverty; and the dispersion of job centers from core ‘downtown’ locations has effects that must be addressed. Improved mobility between workers at all skill levels must occur. Secondly, employment opportunities will increase in coming years. The impact that rapid changes in technology will continue to have on our lives. Technology has already made possible new transit arrangements such as ride-sharing via Uber or Lyft or shared vehicles such Hourcar. With the arrival of autonomous “self-driving” vehicles of all types in the next five to fifteen years, transit as we know it will go through a transformation as dramatic as when the interstate system was developed in the mid-20th Century. This change might be as significant as the transition from horses to automobiles in the first part of the 20th Century. Transit capital and operating cost investments need to be balanced with other public priorities. Public sector investments need to be balanced with the payments made by those who use and benefit from the transit capital and operating cost investments. Perhaps the most important questions relate not to the importance of transit as an issue, or even to the coming demographic and technological changes, but to two key questions that begin with how: How should the next phase of capital and operating expenses be paid for? What range of policy recommendations make progress possible on an issue critical to the future quality of life and economic health of the region, and of Minnesota? How can Minnesota overcome the geographic, ideological, and other differences that have imped policy change and implementation? Is progress possible? If so, how? The Citizens League is pleased to enter this conversation, and excited to move it forward. 4 EXECUTIVE SUMMARY Minnesota and other regions around the country are continuing to prepare for the incredible changes about to take place—including an aging population, a declining workforce, among other factors. These changes will impact our future economic health and quality of life dramatically. Resolving or at the very least moving on from past arguments about transit governance and finance is necessary to begin to meet some of these challenges. We have kicked the transit financing can down the road for far too long. Now is the time to take short-term steps in order to get ready for these long-term changes. The current political and policy environment that must occur for these changes is dominated by five critical questions or issues. These will require decision-makers to make some difficult choices. Avoiding these immediate questions prevents Minnesota from preparing for the future challenges. These issues are: 1) It is likely that the County Transit Improvement Board (CTIB) will dissolve. This would have enormous political and fiscal implication for the role of three levels of government that manage mass transit: the State; counties in the metropolitan area; and the Metropolitan Council; 2) The role of the State of Minnesota: Should it play a greater role, or a lesser one? (This is influenced by, but not the same as, the first question.) 3) The growth and rising costs associated with Metro Mobility; 4) How to better align the costs of major capital infrastructure projects with who pays for these expenses and who stands to benefit. 5) The unknown priorities of the new Administration—priorities regarding support for infrastructure; and transit capital projects. At the heart of these questions and the current disagreements around how to fund transit is the value of transit in the region. It is no wonder the issue of deciding on major capital expenses has become one of the most contentious political issues of our day. On the very first day the committee met, one assumption the group started with was that growing the transit system is important and positive. The question was how? These are not just short-term financial and political questions with long-term consequences. They are also questions about long-term governance and planning capacity. Additionally, these shorter term political and policy questions are complicated by larger, more global cultural and market trends that are taking shape and influencing mobility. The committee identified two larger-scale trends that have deep implications for transportation planning: Demographic: As baby boomers leave the workforce in the next 15 years, and as the number of people over age 85 skyrockets to unprecedented levels, three things will happen: o Workforce mobility and efficient connections between housing and employment will become critical to addressing anticipated workforce shortages; o Issues related to equity and economic opportunity will need to be addressed; and o The number of people needing additional assistance due to a disability will increase dramatically. Technological: Over the next 15 years, rapid advances in technology will make autonomous vehicles or “self-driving cars/trucks” a reality, perhaps on a significant scale. These changes, while unproven, have the potential to impact all aspects of our economy. They will certainly impact what we call “transit” and everything related to mobility. Earlier this year, the Citizens League made recommendations