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Prop M, a half-cent sales tax for Metro, failing

This article first appeared in the St. Louis Beacon: October 14, 2008 - Metro, the St. Louis area's public transit system, went to St. Louis County voters and asked for a half-cent sales tax to fund the agency's operations and expand them. With 93 percent of the vote counted, it looked like county voters weren't buying. Prop M was failing: Almost 52 percent of the voters opposed the tax, while 48 percent voted for it. The tax's prospects had widely been considered shaky.

To explain Proposition M, the Beacon asked Robert J. Baer, CEO of Metro, and Darin Cline, manager of the campaign promoting Proposition M, and Tom Sullivan of the opposition Public Transit Accountability Project to discuss the tax increase. A simple majority is needed for its passage.

What is Proposition M?

Proposition M is a half-cent sales tax to increase funding for Metro, the area's transit system that operates MetroBus, MetroLink and Metro Call-A-Ride.

Shoppers would pay the tax on purchases made in St. Louis County. The county's current sales tax is 1.85 cents.

If Prop M is passed, it would also trigger a quarter-cent sales tax increase in the city of St. Louis. Voters there passed an increase a few years ago, Cline said, but it did not go into effect because St. Louis County voters rejected a similar tax increase at that time. The county and the city measures both had to pass for the tax increase to go into effect. The city voted on the quarter-cent tax only to fund Metro operations -- not funding to expand MetroLink. Therefore, if county voters pass Prop M, MetroLink will be expanded in the county only, Cline said.

Why is Proposition M necessary?

Despite the fact that demand for public transit is at a 30-year high -- ridership has grown nearly 10 percent -- funding for Metro is shrinking, Baer said. During fiscal year 2009, which began July 1, Metro expects a $10 million deficit, Baer said. In the fiscal year 2010, the shortfall is expected to be $45 million, he added.

Longtime Metro critic Tom Sullivan, of the Public Transit Accountability Project, questions Metro's ridership figures. He says the agency does not count unique riders but instead counts riders every time they transfer buses or transfer between MetroLink and a bus.

More important, said Sullivan, "Voters should not approve a tax increase for Metro until it is more accountable to the public it's supposed to be serving. They should especially not approve a 100 percent rate hike."

Sullivan said the state audit of Metro said the agency has $131 million in cash and investments.  The audit quotes an analysis Metro prepared on its finances that "indicated $71 million will be available to fund deficits in 2008, 2009 and 2010,"  he said. In addition, the agency holds $28.2 million of MOHELA bonds, and the auditor's office confirmed to Sullivan that $6.6 million of the amount is unrestricted and could be used for operations, he said.

Sullivan is not the only opponent. The Call newspapers, community papers in south St. Louis County, have also opposed Prop M. An editorial said, "The bottom line is that we do not believe the transit agency's credibility has been restored to a point where we can support" Prop M. "South county residents would receive little benefit from the $80 million" from the sales tax.     

Metro's $221.6 operating budget comes from passenger revenue, local sales tax, grants and state and federal assistance. Fares cover only 20 percent of operating costs.

Metro's officials say the long-term erosion of Metro's funding sources is causing the shortfall. Among them:

  • Federal subsidies peaked at $22 million annually but were phased out by 1999.
  • Missouri reduced its subsidies from $3.5 million in 2001 to $1.4 million today.
  • Local support has failed to replace the lost funds.
  • To speed construction, regional leaders decided to build the Shrewsbury-Clayton MetroLink expansion without federal funding. Now Metro must commit $37 million a year to pay back the bonds.
  • St. Louis County cut funding to Metro by nearly $10 million to meet other obligations in 2009. "The county is our biggest supporter but because of other financial pressures, assistance to Metro has dropped from 64 to 50 percent of the (county's) half-cent transportation tax," Baer said.
  • Projects using tax-increment financing in various municipalities have eroded up to $8 million annually from the half-cent transportation fund. "Sales taxes generally kept up with the rate of inflation until tax increment financing came into existence," Cline said. "Under tax increment financing, instead of getting a roughly 3 percent increase (annually) that kept up with the rate of inflation, we were getting a 1 percent increase because money was being taken off the top for developments."
  • $10 million in federal startup funds that help cover operations of the Shrewsbury MetroLink line will expire in fiscal year 2010.

The operating deficit has nothing to do with the lawsuit and cost overruns on the MetroLink's Cross County Extension, Baer said. Those costs are covered by the bonds issued for the project and are not part of the operating budget.
Metro has received "clean, unqualified audits for the past five years," Baer said. "There is no mismanagement, certainly no fraud or lack of financial integrity."

What would Prop M cost St. Louis County residents?

Shoppers would pay an additional half-cent sales tax on every dollar spent in St. Louis County or 50 cents on every $100 spent.

How much would Prop M raise a year?

The increase is expected to bring in about $80 million a year in the county.

"With the city's tax bringing in between $7 million and $9 million a year, we say it will raise roughly $90 million a year, Cline said.

How would the money be used?

One-quarter cent of the tax increase would fund operation of the current system and provide for expansion of service on some bus routes.

"With additional funding, Metro can increase frequency of express routes that are growing in popularity. Ridership on express buses rose 22 percent over the last year," Baer said. "There is also the possibility of adding higher capacity buses onto heavily used corridors."

With half of the increased tax, Metro could:

  • Increase frequency on MetroBus express routes and arterial routes nearing capacity.
  • Add high-speed bus service between major residential and employment centers.
  • Develop express bus corridors into Bus Rapid Transit lines with high-capacity vehicles with dedicated stations and limited stops.

The other quarter-cent would be used to build and pay for additional MetroLink lines. The next line would probably be along what's called the Daniel Boone Corridor from Clayton to Westport Plaza in west St. Louis County, Cline said.  "We have found the highest density of jobs where we really need a MetroLink to is Westport. That area has about 40,000 jobs."
The tax for expansion would expire in 20 years. "We're trying to tell folks we're not looking for a situation where you fund an expansion and it just keeps on expanding. We're trying to say to the voters that there will be some limits on how this money can be used. The ultimate one is that in 20 years if you want to keep expanding the system, you have to vote the tax back in," said Cline. 

Metro would seek federal matching funds for the expansion. That would require the agency to prove it has the money to run the line once it's built, something that didn't happen on the Cross County line.

But by seeking to increase MetroLink's size, Metro is not focusing on the needs of people who use public transportation, Sullivan said. When Metro opened the Shrewsbury MetroLink line, it reconfigured bus routes to funnel riders into the MetroLink station and actually increased commute time for some riders, he said.

"Everywhere across the country where they put in light rail, bus service actually gets worse," he said.

What happens if Prop M fails?

Without new revenue, Metro will be forced to shrink the system to the funds it has available and will provide fewer transit options, Baer said.

Baer listed cuts to the system if Prop M doesn't pass:

  • MetroLink trains would run every 15 minutes during the rush hour instead of every 10 minutes.
  • Non-rush hour service would run every 20 minutes instead of every 15 minutes.
  • Extra service for special events would be eliminated.
  • MetroLink service would cease after 8 p.m.
  • Up to 28 of the 60 existing Metro bus routes may be eliminated, including all service outside I-270. Since Call-A-Ride, a van service for the disabled, mirrors the bus service, Call-A-Ride service beyond I-270 would end, too, he said. One-third of the 60,000 trips a month would be cut, Baer added.
  • If further cuts are required, express bus service and night service would be eliminated, he said.

But Sullivan is skeptical. "For the past five years, Metro officials have continually claimed the agency was running out of money and needed a tax increase," he said. "A $28 million deficit was predicted for fiscal year 2007, ending June 30, 2007, but then the year ended with a $9 million surplus."
Who has endorsed Prop M?

A wide range of organizations and individuals, including Focus St. Louis, St. Louis RCGA, St. Louis Cardinals, Paraquad, BJC Health Care, St. Louis County Municipal League, Missouri Growth Association, Missouri Progressive Vote Coalition, St. Louis County Executive Charlie Dooley, St. Louis Labor Council, St. Louis Realtors Association, SSM Health Care, Trailnet.

Is there opposition to Proposition M?

Yes. Besides the Public Transit Accountability Project, the St. Louis County Central Committee of the Libertarian Party has also passed a resolution urging voters to vote "no" on Proposition M. For more information about the Public Transit Accountability Project, call 314-727-2242.

Ballot Language

PROPOSITION M - Public Transportation

Shall St. Louis County, Missouri impose, in addition to an existing County-wide sales tax of one-quarter of one percent for the same purpose, a county-wide sales tax of one-half of one percent (0.50%) which shall have a sunset date twenty years from the date on which the tax is first imposed, for the purpose of providing a source of funds for public transportation purposes, with the revenues from one-quarter of one percent (0.25%) to be used for expansion of a light rail system and revenues from the remaining one-quarter of one percent (0.25%) to be used for the maintenance and operation of existing public transit facilities?

Kathie Sutin is a freelance writer in St. Louis.