2022 budget reflects Met Council priorities

Date: Wednesday, October 27, 2021

On October 27, the Metropolitan Council approved a 2022 budget for public comment that totals $1.224 billion. The budget includes the cost of operations, pass-through funding programs, and debt service (loan repayments). It reflects our legislative charge, overall mission, goals, and priorities for the current period.

“This budget reflects the vision set forth in our regional plan, Thrive MSP 2040, with the particular stamp of this current Met Council’s values and four key priority areas: transportation, reducing racial disparities, housing, and sustainability,” said Charlie Zelle, Met Council chair.

“Community voices are an essential part of our budget process,” Zelle said. “We encourage the public to comment on our budget.”

The 2022 budget also reflects the continued impact of the COVID-19 pandemic, especially on transit operations.

Funding vital regional services

The Met Council’s planning and services provide a foundation for regional economic vitality. Our primary services include:

  • Metro Transit, which provides bus, light rail, and commuter rail services. We also operate Metro Mobility, for certified riders with disabilities, and contracted transit services. Overall, Met Council provided 94% of total regional transit ridership in 2020.
  • We collect and treat wastewater for 111 communities, representing 90% of the region’s population.
  • We partner with 10 regional park implementing agencies to plan, acquire land, and develop facilities for regional parks and trails.
  • Our Metro HRA provides safe, stable, and affordable housing opportunities for about 7,200 households with low incomes.
  • We support local community vitality through grant programs, local planning assistance, robust regional data collection and analysis, and other tools.

Met Council operating budget, by division, is $668 million, or 54% of total, for transportation planning and services; $301 million, or 25%, for Environmental Services (wastewater treatment, water quality, and water supply planning); $143 million, or 12%, for Community Development activities; $98 million, or 8%, for administration costs, like human resources, information technology, and finance; and 1%, or about $14 million, for other post-employee benefits.

Sustaining our regional resources

The Met Council undertakes initiatives to preserve and upgrade valuable regional infrastructure and ensure that future generations can enjoy a high quality of life.

For example, in 2022, our Environmental Services division will make $227 million in capital investments to preserve existing wastewater treatment and collection facilities, improve efficiency, and provide needed capacity for growth.

In partnership with researchers at Princeton University, the University of Texas, and the University of Minnesota, we will finalize a regional greenhouse gas inventory and release a scenario planning tool. This tool will enable all communities in the region to measure their greenhouse gas emissions across multiple sectors and identify the effects of various mitigation strategies.

Promoting collaboration and Thrive MSP 2040 outcomes

The public comment budget sets aside $3.2 million for additional investments in the Met Council’s focus on Thrive MSP 2040 outcomes: stewardship, prosperity, equity, livability, and sustainability). Past examples include:

  • Grants to park agencies for capital projects that strengthen equitable us of regional parks and trails by all our region’s residents across age, race, ethnicity, income, national origin, and ability.
  • The Metro Transit Police Homeless Action Team, which connects people experiencing homelessness who are sheltering on transit with housing and support services.
  • A partnership between Edina and the Met Council to purchase homes in the city to be leased to eligible families with low incomes.
  • Expanding our Underutilized Business program to create a sheltered-market program, increase the pool of eligible firms, and increase access to business opportunities with the Met Council for firms owned by women, people or color and indigenous people, and people living with disabilities.

Major sources of Met Council revenue: user fees, state and federal funds, and property tax

About one-third of Met Council funding, or $388 million, comes from customer payments for our services. Our primary paying customers are transit riders, and cities and townships served by Met Council wastewater services. Although transit ridership is gradually increasing after a sharp drop during the COVID-19 pandemic, revenues from transit fares are expected to continue to be depressed in 2022 from pre-pandemic levels.

Another 36% of our revenues ($450 million) come from the state, primarily through the motor vehicle sales tax, a portion of which is dedicated to metro area transit. We pass through $40 million to Suburban Transit Providers. The state legislature also makes general fund appropriations to the Met Council.

Federal revenues constitute about 18% of our revenues. A total of $78 million is passed through as rental assistance payments directly to property owners. Transportation receives $33 million to support operations and $102 million in federal pandemic relief funds, and $2.7 million in passthrough for Suburban Transit Providers.

The fourth largest source of Met Council revenue (7%) is a local property tax, proposed at $91 million for 2022 across the seven-county metro area.

Met Council budget revenues come from these sources: Charges for services (wastewater charges 27%, and transit fares 5%); state funds (motor vehicles sales tax 28%, and general appropriations 8%); federal funds, 18%; property tax, 7%; and other revenues, 7%.

Property tax levy supports transit, parks and Livable Communities grants

Property taxes are primarily used to pay debt service on bonds issued to support the transit and regional parks capital programs, and to provide pass-through grants to local communities under the Livable Communities Act.

The payable 2022 Met Council levy represents a 2% increase over the amount payable in 2021. Under the levy, a metro area home with an estimated value of $250,000 may pay a Met Council-related property tax of $47.89 if it is within the transit taxing communities. This includes all the cities in the Transit Taxing District as defined in state law, plus any cities that voluntarily join (Minn. Stat., Sec. 473.446). Outside the district, a comparable home may pay a Met Council-related property tax of $17.12.

The Met Council typically receives about 1.4% of the revenue from property taxes paid by metro area residents.

Revenues from the Met Council property tax levy support the following activities: $52.4 million, transit debt service; $16.6 million, general purposes; $13 million, Livable Communities grants; $5 million, the tax-base revitalization portion of the Livable Communities program; and $3.5 million, community development debt service.

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