Dave Osmek – who’s a businessman, a city councilman in Mound, and is running for the State Senate, either to replace Gen Olson or to run against Terri Bonoff, depending on how redistricting works out – got curious about some of the Metro Transit’s numbers on how light rail’s been working out financially.

Now, as I noted yesterday, I’m not anti-rail-transit, per se; I’m anti-anything that eats up two taxpayer dollars for every dollar it generates in user fees, with no end in sight, to serve a very dubious purpose.

I thought the current taxpayer subsidy of $4 for every $2 fare – which the Met Council admits as the current operating subsidy – was unconscionable.

As Dave notes, those numbers are too pollyannaish.

Using numbers from the Met Council website, he crunched together the numbers for the Hiawatha Line.

And they’re not pretty:

The “Total Expenses” column is what it costs to run the line for a year.  They’ve jumped 50% since the line’s first full year, by the way – way faster than inflation.

The “Rider $$$” column?  That’s how much they collect via fares.  Note that if you divide it by 2 – the $2 you pay for a fare – you do not get the correct ridership numbers; Dave included a “Ridership” column; you’ll note that the average rider pays something close to 96 cents; between special student and senior fares, promotions (like “Ride home for free on Saint Patrick’s Day”), and the many, many turnstile-jumpers that ride the line, the line gets less than a buck per rider.

And so the “Public $$$” column comes in; that’s the subsidy we pay to make the “Total Revenues” column match the “Total Expenses” column.

And that leads us to the “Subsidy Per Ride” column; that’s how much public money it takes to make the revenues cover the expenses.  For the fares the rider pays – a little over ninety cents a ride, on average – the taxpayer is tacking on an extra $1.60.  Put another way, every $2 fare that is actually paid is covered by another $3.50 or so.

But that’s really just the tip of the iceberg.

The line was paid for with bonds – $715,000,000 in bonds floated at an average of 4%.  They were floated at all levels – state, Met Council, the Feds – and eventually it’s all money that goes to the Chinese.

These bonds, like a huge mortgage, get paid every year over the course of their 30 year life.  And the annual bond payment on $715,000,000 comes to about $41,348,521, give or take.

That’s on top of the line’s operating expenses.

So if you add each rider’s share of the bond payment to the price of the subsidized ticket, it means the actual public subsidy for each ride comes to an average of $6.41 for every $.90 cents they raise in fares; put another way,  each $2 paid by the ripe sucks, the 45% who actually pay for fares, costs the taxpayers a little over $13.50.

That is an awful lot of money.

So – how about the Central Corridor?

It’s worse.  Much worse:

 

 

 

Assuming an average of $.99 a ride (same as Hiawatha using the Met Council’s ridership numbers – and I think both are generous),it adds up to a $17 million annual subsidy – that is, revenues will be $17M short at covering the annual nut.  Every year

Add the $55 million in annual bond payments; divide it by the ridersihp, and you’re talking a public subsidy of $8.77 per ride – or $17.54 per paid $2 fare.

And the Southwest Light Rail?

Again – using the Met’s ridership and bonding numbers, and carrying over the Hiawatha’s actual revenue per rider, it’ll actually get a little closer to covering its operating costs – but the $1.2 billion in bonds have to get paid.  Which means the subsidy per ride is going to be $10.97 – or almost $22 per full $2 fare.

Worse? The Met’s philosophy seems to be “sell at a loss, make up for it in volume”.  None of the three lines will come within 60% of breaking even – so the taxpayer will be on the hook to subsize the lines to the tune of over 60% of the budget:

• Hiawatha: $15 million
• Central Corridor  $17 million
• Southwest: $12 million

Of course, that’s not all.  Not counting the annual bond payments of over $175 million (which is spread over all levels of government, from city through federal, so it’s not all coming out of the state budget) – but tacking  on the annual operating subsidy for the Northstar line ($13 million), and you get a grand total of well over $55 million dollars a year just to cover the four lines’ operating losses.

Every year.

Forever.

Even after the bonds are paid off.  Not counting for inflation or – let’s not forget – the inevitable need to replace rolling stock or stretches of line.

And barring gas jumping to $20 a gallon, it’s just not going to change – not to the tune of blasting rider revenue up by 250%.