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<br />SPECIFIC OPERATING FUNDING ALTERNATIVES FOR NORTHSTAR <br /> <br />. <br /> <br />Based on the experience of the peer group commuter rail systems discussed above, this <br />section describes some federal, state, and local funding sources that may be available for <br />ongoing operation and maintenance of commuter rail service in the Northstar Corridor. <br />This preliminary feasibility study does not explicitly forecast farebox recovery ratios for the <br />Northstar service. Sources of funding to cover operating deficits will be identified in the <br />following sections. <br /> <br />Federal Funding <br /> <br />TEA-21 does not authorize federal operating assistance for commuter rail operations. No <br />federal operating assistance is anticipated for the Northstar service. However, federal grants <br />may be available for certain ongoing capital maintenance and improvements projects after <br />service is initiated. This preliminary feasibility study does not explicitly evaluate capital <br />maintenance schedules for the Northstar service. <br /> <br />State Funding <br /> <br />The recent Twin Cities' Metropolitan Commuter Rail Study suggests that funding for <br />operations would be best placed at the local level because the overwhelming majority of users <br />and direct beneficiaries of the service will be local residents. However, state funding derived . <br />either from general revenues or the state sales tax could be appropriated annually to subsidize <br />commuter rail operating deficits, subject to established budgeting and review processes. <br /> <br />Local Funding <br /> <br />The recent Twin Cities' Metropolitan Commuter Rail Study identified two main sources of <br />local funding as most appropriate for financing commuter rail operating deficits. Each of the <br />seven metropolitan railroad authorities, including the Anoka County Regional Railroad <br />Authority, is statutorily authorized to impose annual property taxes up to a maximum of <br />0.04835 percent of market valuation. In Anoka County, this represents a 1998 potential levy <br />of more than $5 million. The actual levy was approximately. $700,000.17 <br /> <br />The study also suggested that a regional sales tax, if enacted, could provide a very strong base <br />for financing debt service on local bonds, annual commuter rail operating deficits, or both. A <br />1 % tax on retail s.ales in the Twin Cities metropolitan area would have produced <br />approximately $332 million in collections in 1998. This tax would most likely be collected <br />and administered by the Metropolitan Council. <br /> <br />. <br /> <br />Northstar Commuter Rail Feasibility Study <br />March 23, 1999 <br /> <br />9-12 <br />Financial Analysis <br />