RTA's Long History Of Reliance On Sales Tax May Be Reaching Breaking Point

[Mary Fecteau / ideastream]
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The Greater Cleveland Regional Transit Authority faces some tough choices. Over the course of the year, the RTA board will consider options to make up for an estimated $20 million hole in the agency’s budget.

These struggles with unstable funding are nothing new.

Back in 1975, Cuyahoga County voters passed a one percent sales tax. It created the funding for the county’s new, unified transit system.

About 70 percent of voters were in favor of the new tax. And for a while, the system was strong.

But now many RTA riders seem to be voicing their displeasure as well.

There’s been a steady decline in riders since the mid-2000s, when there were more than 60 million tickets sold in a year. From November of 2016 to last November, ridership dropped below 40 million.

“The core of the issue is that we don't have a balanced funding approach to public transportation in Northeast Ohio," said Ken Prendergast, a transit advocate with All Aboard Ohio.

In 2016, total sales tax revenue was 89 percent of the RTA’s operating budget. So when sales tax revenue takes a hit, it has a huge impact on the overall budget.

According to Prendergast, relying on a sales tax was the plan from RTA’s birth.

“Because Cuyahoga County was at its peak of population, we thought growth would continue. It did not. It went in the other direction," said Prendergast.

So while sales tax revenue has grown over the years, it hasn’t grown as fast as expected.

RTA also gets funding from Columbus, but not much compared to other states. Ohio spent about $0.63 per capita statewide in 2012 - 37th in the nation.

And so a recent loss of about $20 million in sales tax revenue from a lapsed tax on Medicaid-funded health plans puts RTA in its current bind.

State Sen. Matt Dolan (R - Chagrin Falls) worked to come up with about a year’s worth of replacement money.

Dolan said it’ll take some work to get more from Columbus, especially convincing lawmakers from rural areas.

“Not because they are against it, they just don't appreciate the importance of public transportation because it's not a central focus of where they live," said Dolan.

During a recent appearance on WCPN’s Sound of Ideas, RTA General Manager Joe Calabrese said they still hold out hope.

“The typical state provides 20 percent for the transit systems in their state. Our state is at 7/10ths of one-percent," said Calabrese.

Among some officials in Cuyahoga County, the conclusion that Columbus may never change its position on transit funding is starting to settle in.

So the question has come up, 40 years after the Cleveland Transit System was transformed into the RTA – how else can we fund the system?

The obvious choice: an increase in the sales tax.

Newburgh Heights Mayor Trevor Elkins describes the agency as stuck in a death spiral. Elkins, who joined RTA’s board two years ago, says there may not be another chance to stabilize public transit for another 40 years.

“So it can't be something that trims around the edges and that's why I think the real solution, until there's a better overall formula coming from the state of Ohio, the real solution is a quarter or a half-percent sales tax increase," said Elkins.

According to Elkins, the board, which hasn’t ever placed a sales tax increase on the ballot, should have started the process a year ago.

Cuyahoga County’s sales tax rate is already at 8 percent, the highest in the state.

Advocates are pressing for new sources of revenue – things like a commuter tax or a fee on rideshare trips. But right now the only measures on the table are service reductions, a fare increase, and potentially more cuts to come.

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