Ridership on Track So Far, But Taxpayer Subsidies are Staggering

While the Northstar Commuter Rail line is meeting its start-up ridership goals so far, it may be an uphill climb to double monthly ridership by September as projected, even with passengers paying just a fraction of the heavily subsidized train’s true cost, according to a Freedom Foundation of Minnesota (FFM) analysis of the first 100 days of operation.

Passenger tallies obtained by FFM show total ridership of 167,922 from November 16, 2009 through February 25, 2010, closely in line with projections.Ridership counts are based on one-way trips, with round trip passengers being counted twice each day they use Northstar. The average number of one-way trips per day has ranged from 2,207 per day in November to 1,461 per day in January.

Metro Transit has set a goal of 897,000 riders in 2010. Monthly ridership goals begin at 45,000 in January, climbing to 71,600 in June and ramping up to 102,000 in November. In the first three full months of operation, ridership has averaged around 45,000.

Officials estimate passenger fares will only cover an estimated 21% of Northstar’s $16.8 million 2010 operating budget, requiring taxpayers to subsidize the difference. For every $14 round trip ticket purchased between Big Lake and Minneapolis, taxpayers kick in an operating subsidy of $29.66 per ticket to keep the trains running. Total operating cost per round trip: $43.66, based on Metro Transit’s operating $16.8 million operating budget and projection of 897,000 riders.

Yet the taxpayers’ ticket to ride on Northstar is far higher when you take into account the amortized $317 million capital costs - a combination of federal, state, and local funds – that it took to build the line. Using a standard federal government formula, Northstar’s capital costs come to $25.3 million annually.

Thus, the true taxpayer cost of operating Northstar is about $42 million annually: $16.8 million in operating costs and $25.3 million in capital costs.

Taking both capital and operating costs into account, the true cost of a one-way trip on Northstar averages $46.94. Minus the $7 cost of the most expensive one-way fare, taxpayers pay a subsidy of $39.94 per ticket. For commuters, the true total cost per round trip increases to an average of $93.89. Minus the $14 cost of the most expensive round trip fare, taxpayers pay a subsidy of $79.89 per ticket.

The bottom line: Northstar passengers who commute roundtrip five days a week receive an average taxpayer subsidy of nearly $400 per week, or $1,600 per month. At that rate, you could lease each commuter a comfortable car, pay for parking and gas, and still save taxpayers plenty of money, particularly with the government now in the car business.

Tips, questions or concerns? Contact Tom Steward, FFM Investigative Director, at 612-354-2165.



Stay In the Loop

Stay Up To Date

Sign up today for our
e-update to find out what is
going on in your state and
local government.

FFM Tipline

We will do our best to uncover the wasteful spending you report.