GCRTA Anticipating Fare, Tax Revenue Decline In 2021 Budget Proposal
The Greater Cleveland Regional Transit Authority (GCRTA) is anticipating a COVID-19-driven drop in passenger fare and sales tax revenue as it plans its budget for 2021.
A proposed 2021 tax budget went before the agency’s Operational Planning and Infrastructure Committee for a hearing Tuesday.
The agency received roughly $112 million from the federal CARES Act, according to GCRTA Office of Budget and Management Director Kay Sutula, to help offset the revenue losses and increased costs brought on by the pandemic.
But GCRTA will feel the impact of the 2020 pandemic through 2022, she said.
“The authority will be operating at a loss each year,” Sutula said. “The CARES Act funding will help to offset these losses and provide stability during the pandemic recovery.”
Current projections show a decline of nearly 10 percent in sales tax revenue, Sutula said, leaving $192 million in projected revenue for the 2020 fiscal year. Passenger fares are expected to be 45 percent lower this year than in 2019, she said, totaling about $23.5 million.
“As the economy slowly opened and the stay-at-home order was lifted, ridership has slowly increased over the last several months, but still remains near 50 percent below average from pre-COVID levels,” Sutula said.
In 2021, both ridership and tax revenues are expected to see modest growth, Sutula said. Passenger fares are projected to increase by about 29 percent, to $30.5 million. Sales tax is projected to increase by less than 1 percent in 2021 and by about 5 percent in 2022 as the economy rebounds, Sutula said.
“These estimates are conservative due to the uncertainties surrounding the pandemic,” she said.
Sales and use tax account for roughly 83 percent of the proposed GCRTA budget, Sutula said, while passenger fare revenue provides about 13 percent.
About $20 million in funds previously slated for preventative maintenance will be redirected to other capital projects over the next two fiscal years, Sutula said.
The proposed tax budget will go before the full GCRTA board July 28.
The Committee also heard plans for service changes and restoration as the state continues to return to normal. Select routes and services will increase frequency beginning Aug. 9, including restoration of B-Line trolley service, with modifications, said Service Management Director Joel Freilic said, to be ready for fall.
The B-Line Trolley will be back in action in Downtown Cleveland next month. [The Greater Cleveland Regional Transit Authority]
“We want to be ready for all eventualities,” Freilich said. “The last thing we want to do is be in a position where somebody said, ‘Well, we were ready to be open, but RTA wasn’t ready to support us so we didn’t reopen.’”
The agency plans to return its service level to 93 percent of pre-pandemic operations, Freilich said. Blue and Green rail service lines will return to pre-shutdown levels, he said, and each of the Park-N-Ride locations will resume service with 30-minute frequency on weekdays.
“We’re quite well aware that many Downtown workers will continue to still work from home through this period, but some are required to come to work,” he said. “We want to be here for them.”