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Transit Subsidy?


In December of 2010, Council Members were asked in a public forum why the City was proposing to increase spending on Transit for 2011, while ridership was declining.  Councilmember Erickson responded (apparently for the Council Majority that subsequently approved the 2011 budget) by saying that “we have to spend it (the Transit surplus) or lose it”.
The same issue was raised at the Truth-in-Taxation Hearing in December of 2011, when it was learned that City Hall planned to increase spending again for 2012. Once more it was Erickson who defended City Hall’s management of its Transit activity.
For those interested in fundamental facts and not political hyperbole, we would refer you to a 2011 report from the Office of the Legislative Auditor, State of Minnesota titled GOVERNANCE OF TRANSIT IN THE TWIN CITIES REGION.  The report provides data not made available by City Hall.

This report compares the amount of tax subsidy required for each passenger ride, for the various systems in the Twin Cities area.  It is broken down by local service and express service.  For simplicity we will present the data in tabular form.

Tax subsidy required/Passenger
                                            Prior Lake           Next highest           Lowest           Average
Local:                                   $20.22                    $14.92                  $3.81               $4.95
Express:                                  7.77                         5.04                     1.41                 2.89

Simply stated,each time a local rider boards the City’s bus system, tax payers have to kick in another $20.22.  For each rider on the express bus, tax payers add another $7.77.  It’s clear from the data that Prior Lake’s system not only requires an exorbitant amount of subsidy, but higher than any other system by a wide margin.
Whether most, or the entire subsidy (depending upon how City Hall reports its financials) comes from gas tax as opposed to real estate tax, it’s still tax payer dollars that are subsidizing an inefficient system.  The fact that City management refuses to acknowledge  the obvious inefficiency is reflective of other problems at City Hall.