Cleveland Public Transit May Need Tax Increase In 2019 To Stay Afloat, According To County Report

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Cuyahoga County's Transportation Advisory Subcommittee is recommending to the county's public transit agency that it consider a sales or property tax increase to overcome its most recent budget setback, indicating that the system needs more dedicated, local funding.

Starting this year, the Greater Cleveland Regional Transportation Authority and Cuyahoga County stopped receiving money from a sales tax on Medicaid-funded managed care organizations (MCOs).

That led to a $20 million hole in the RTA budget.

In a draft copy of the advisory subcommittee's report, the group recommended RTA and the county work together to put a 0.25 percent sales tax increase on the ballot. The proceeds would help both entities make up for revenue lost from the end of the MCO tax.

However, the final copy of the report to be released Thursday calls for either a smaller sales tax hike of 0.1 percent or a 1 mill property tax increase dedicated exclusively to RTA.

County Councilman Dale Miller, chair of the advisory subcomittee, said the report doesn't include the county in its recommendation because a new state law drops the minimum sales tax increase from 0.25 to 0.1 percent.

He also said focusing on the transit agency, and leaving the county out of its tax proposal, was viewed as more likely to lead to action.

"We're already stirring a hornet's nest by openly stating that RTA might ask for a sales tax increase," said Miller.

Miller said RTA should wait until after the next round of state budget negotiations in 2019 to put a sales tax measure on the ballot.

In the meantime, the state has provided temporary replacement funding in response to the MCO sales tax loss. That funding ends next year and, according to Miller, legislators in Columbus have reached a tentative agreement for additional funding through early 2019.

At its final meeting on Thursday, the committee also called on the RTA to cancel its planned 2018 fare increase.

"We're at a juncture where you can't keep increasing or you're not going to have any more riders," said Yvonne Conwell, committee vice-chair and county councilmember.

The transportation report also called for more lobbying in Columbus to increase public transit funding in the next budget.

Sen. Matt Dolan (R-Chagrin Falls), who proposed a longer-term funding fix that was vetoed by Gov. Kasich, says more public transit lobbying will be needed.

"There's finite dollars that we are fighting over," said Dolan. 

"And so, if you represent a district that doesn't have a whole lot of public transportation, it may be hard for you to understand why additional dollars are heading to the RTA up in Cleveland or the Metro here in Columbus or other places so that's an education fight that we have to work on."

The RTA Board of Trustees can put a sales or property tax measure on the ballot. During a recent appearance on ideastream's Sound of Ideas, RTA CEO Joe Calabrese said RTA is looking at that possibility.

"There's a lot of options, we are looking at those options, that really is a board decision, above my pay grade," said Calabrese.

Those other options include a fee on parking and more employers paying for RTA passes, but he added they are waiting to find out if the state will provide more funding before moving ahead with the other options. 

Since its founding in 1975, Cuyahoga County's public transit system has been funded by a 1 percent countywide sales tax. That makes up about 70 percent of its annual budget.

A round of fare increases and service reductions in 2016 was due to other budget constraints.

Fare increases scheduled for 2018 would also proceed whether or not the $20 million is replaced.

In the spring, RTA is planning to announce service reductions and layoffs in response to the MCO sales tax loss. 

Thursday's meeting is the last one scheduled for the transportation subcommittee, after meeting for one year. Transportation advocates, who have a representative on the subcommittee, have called for continued meetings.

According to Councilman Miller, it will continue in some form at county council.

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