Metro Transit predicts more red ink

Metro Transit is predicting its budget deficit for 2010 and 2011 will be even worse than earlier expected.

The latest revenue projection shows the Twin Cities public bus and rail system projected revenue shortfall for 2010 and 2011 is $62 million, up from $45 million.

Metro Transit relies heavily for money on the sales tax revenue from vehicle sales, which are down sharply. Met Council chairman Peter Bell says the council, which owns and operates the public transit system, will make up part of the deficit with reserves.

Bell says money from the quarter-cent sales tax for transit, which is levied by five Twin Cities counties, is not available for a bailout.

"That raises about $85 million a year, and that is available for new construction of transitways. They are allowed to pay 50 percent of operating costs of only new lines, not for existing lines," said Bell.

Other options include getting permission from the Legislature to use levying power.

"We have some levies that we use at the Met Council for development projects, and given that there's no development we may ask for legislative authority to use those dollars to deal with our operating deficit," said Bell. "Then we'll be getting $67 million in the stimulus package from the federal government, and we can use some -- though not all -- of that money to address our deficit."

As a last option, Bell says the Met Council would propose raising fares and cutting service.

The transit operating deficit comes in spite of record ridership. Revenue from fares pays less than 40 percent of transit operating costs.

Bell says unless vehicle sales rebound, the transit operating deficit will persist.

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