Dayton seeks a plan B to pay for Southwest light rail

Gov. Mark Dayton is looking for fresh options to get the Southwest Corridor light rail project built.

The final piece of funding for the $1.8 billion project is in limbo after special session talks broke down last week. The governor has invited legislators, local government officials and business leaders to a public meeting Thursday to discuss what's next for the proposed line between Minneapolis and Eden Prairie.

The project still needs $135 million in local money to leverage $895 million in federal funds.

But lawmakers failed to provide the state share during the 2016 session, and a last-ditch plan to allow Hennepin County to cover the remaining cost crashed on the final night. They also failed to reach a deal for a summer special session to address the transit issue and other unresolved matters.

The entire project is now in jeopardy, said Sen. Scott Dibble, DFL-Minneapolis.

"This isn't good," said Dibble. "This is not a good development for Southwest light rail transit and, by extension, it's not a good development for building out a robust transit system in the metropolitan area that puts us on the same footing with other metropolitan areas. So, we're in pretty bad shape."

Dibble, the chair of the Senate Transportation Committee, said he plans to attend the governor's meeting. But he's not sure there are any viable funding options to consider. He thinks the impasse can only be resolved in November with the election of more transit-friendly legislators.

Other Southwest light rail supporters believe there are still options.

One potential funding source is the state's fiscal disparities program, said Pat MulQueeny, president of the Eden Prairie Chamber of Commerce. It was created 45 years ago to even out the property tax burden in the metro area. MulQueeny said Eden Prairie is a net loser under the program.

"Times have changed since 1972, let's put it that way," he said. "Metro transportation is a much stronger need for the region, and the fiscal disparities dollars could be utilized metro-wide on transportation projects. And in this case, dollars could be put toward Southwest LRT."

House Republicans firmly oppose the light rail funding. They've also recently began arguing that there's no urgency to take action.

As evidence, Minnesota House Speaker Kurt Daudt, R-Zimmerman, points to an email that the Metropolitan Council Chair Adam Duininck sent Dayton in January in which he said federal officials were holding off on a funding agreement until 2017, due to pending legal challenges.

"He's hid that from the public and from the Legislature and from the press since January of this year," Daudt said. "We know the federal government is not going to fund it for a year and a half. There is no deadline. There is no reason that we have to take action now on Southwest light rail."

Despite that email, a Met Council spokesperson on Wednesday insisted that the federal money is not being held up by the pending litigation.

And Duininck issued a statement this week countering Daudt's "no deadline" claim. Duininck said that a major engineering contractor has already moved some staff off the project until the funding issue is resolved.

He said the delay is adding an estimated $1 million each week to the project cost, and that a decision is needed as a "practical matter" by Aug. 31.

"Without local funding commitments by then, we will be forced to begin shutting down the office and project permanently," Duininck wrote.