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Greater Cleveland RTA finances: A look inside the numbers

Marc Lefkowitz  |  02/26/16 @ 4:00pm  |  Posted in Transit

As the Greater Cleveland Regional Transit Authority Board prepares to take up its deliberations on a fare increase of 25 cents per ride and $1.25 for its Paratransit customers on Tuesday, March 1 (9 a.m. at its offices on West 6th Street) we take a look at the agency’s financial audit over the past decade.

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In 2015, RTA’s operating budget was $300 million, General Manager Joe Calabrese explained this week at the Old Stone Church. According to its financial audit, in 2014 RTA collected $201 million in operating revenues from a 1 cent sales tax in Cuyahoga County. The sales tax collection for RTA has seen a rebound—it is stronger today than in pre-Recession years to the tune of $33 million to the good.

Sales tax revenue had dipped to a low of $154 million in 2009 when RTA last raised fares. That fare increase did little to immediately stem the red ink on RTA’s balance sheet— operating revenues dipped by $30 million from 2009 to 2010, the year RTA made deep cuts to its bus service.

The biggest cause of RTA’s budget crisis in 2010, though, was an unprecedented cut from the State of Ohio of $9,297,000. Why the state was suddenly so stingy in its contribution might be explained by its own fiscal crisis as gas taxes of $0.28 / gallon on every fill up were slipping due to a combination of the Recession, a trend of people driving fewer miles and buying more fuel efficient cars.

The financial situation at RTA would have been considerably worse if not for an uptick in 2010 in federal operating grants—Washington kicked in $11,000,000 more that year through reimbursements to its Congestion Mitigation Air Quality (CMAQ) program which the regional MPO, NOACA, agreed to provide an emergency sum (often other regions leave the state portion of CMAQ funds unspent and can agree to release them for other regions to use) for RTA. The Recession also wiped out RTA’s small investment portfolio.

Calabrese noted this week that 20% of RTA revenues come from the fare box. With sales tax revenue, then, fully recovered from the Recession, Calabrese’s comment that Ohio is “asleep at the wheel” is more than empty talk. The turn around of state contributions from its high in 2010 of $15,875,000 to its second lowest figure in ten years in 2014 of $2,265,000 represents a much higher percentage change in revenues than the sales tax revenue change in the last decade. And while it could be said that the historic trend of Ohio not providing a fair and equitable contribution has come to be expected, in 2010 when the state slashed its support by more than 50% it laid bare how unsustainable the current system is—with its premise of continual growth. At the same time, the data shows it may not be such a clear connection between population decrease in Cuyahoga County and sales tax revenues, as Calabrese said. RTA’s sales tax revenues have been on the upswing. In addition, RTA's operating budget has been on a steady upswing—the agency added $44 million in expenses from 2010 to 2014.

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