This week, we reported on a transit crisis unfolding in the State of Ohio. We end the week asking, what can state and local leaders do to prevent the transit crises brought on by the long-expected end of a medical care organization (MCO) sales taxes which will punch a $20 million hole in the Greater Cleveland Regional Transit Authority (GCRTA) 2018 budget? We spoke to transit advocates, business leaders and RTA officials and asked them to weigh in on solutions.
In an interview, GCRTA CEO and General Manager, Joe Calabrese, said that they haven’t given up pursuing all options with state leaders to preserve its 62 transit systems.
“We have been sounding the alarm for a year now,” said Calabrese, adding that he is speaking to state leaders through the transit association, OPTA, and the local chamber of commerce, Greater Cleveland Partnership. “People on both sides of the aisle say the fight is not over. What else could we do except express what is the immediate impact of losing 7% of our operating budget?”
It’s too soon to discuss specific cuts, Calabrese said, but, when pressed, he offered a glimpse of what losing $20 million support from the state could mean: At least 165 RTA employees would lose their jobs. Also, 1.8 million fewer rides for commuters, 700,000 fewer trips to school and 300,000 fewer trips to the doctor made on a bus or train. Where they would be cut would probably be decided in April-May, 2018 by a committee of staff and trustees after they hear from the public in hearings. Transit riders without the option of driving their own car will receive special consideration, Calabrese said, but, cuts this deep would hurt suburban and urban transit rider alike.
“Those using light rail from suburbs have more options that those who use a bus in the city,” he said. “Some routes may be cut, some may go from 15 to 30 minute (frequency). If we eliminate overnight bus service, we could save $2.5 million. But that wouldn’t impact the budget. That’s just working on the edges.”
Back to the present. Calabrese noted that the Ohio House approved an increase in state transit funding with its 87 to 10 vote to override the governor’s veto for the plan. The Senate has three weeks to act.
Options to preserve the state’s nine large and 52 small transit agencies include.
Option one: The State Senate can approve the amendment proposed by Chagrin Falls Senator (R) Matt Dolan to increase the franchise fee on medical companies from 5 to 7 percent. It would supply $5.1 million back to GCRTA (well shy of $20 million). Other states introducing an MCO fee to replace their sales tax in 2017: Tennessee’s legislature approved an ambulance fee ($20,000 ea./max), and Oregon approved a 1.5% managed care/insurer tax that will generate $205 million for the state. Thirteen states reported increases to one or more provider taxes in FY 2018, compared to only five states reporting provider tax decreases—that follows a six year trend of more states increasing MCO taxes.
Option two: The Ohio General Assembly could create a transit fund in the state’s transportation budget. Currently the budget is 1-2% on transit (meanwhile, 9% of Ohioans use transit. Ohio has the 14th largest transit ridership in the country.)
The state’s Department of Transportation issued “The Statewide Transit Needs Assessment” in 2015 and found 35 million transit trips were being unmet.
Calabrese comments: “It recommended a doubling of the state budget, from seven tenths of one percent to 10 percent, to address operational and capital needs like buses operating years past their lifespan.”
“Ohio’s long neglect of public transit contributes to economic problems,” Policy Matters adds.
The Governor’s Task Force to Reduce Reliance on Public Assistance identified a lack of transportation as a leading barrier to employment and self-sufficiency.
Option three: Ohio received $1.4 billion in federal transportation dollars in 2017, and plowed $1.3 billion of it into highways like the $634 million, 16-mile, four-lane, limited-access highway around the City of Portsmouth in rural and sparsely populated Scioto County.
The state did shift or “flex” $33 million from this bucket to transit-related (capital improvement, not operating) needs last year; it is able to flex up to 50% of surface transportation funds to transit. By comparison, Pennsylvania invests about $840 million a year in public transit.
“Ohio could be in a much stronger position if they invested more in public transit,” Calabrese comments. “The Amazon bid is nothing different than what we’ve been talking about for years. Progressive companies want to attract talent. They want viable transportation options.”
Option four: Ohio voters could take matters into their own hands as they did with the ballot initiative to allow casino gambling. It will take a two-thirds majority to change the Ohio Constitution to peel off a portion of what Ohioans pay for driver’s license and registrations to be used for operating support to transit systems. At least 24 states have raised new funding for transportation at the state level since 2012, according to Transportation for America, including the use of gas tax for transit.
Local options: Once all state-level options have been explored
Cities pursuing the type of social and economic equity that transit-connected neighborhoods promise are introducing local taxes to help support reliable, efficient and, sometimes, new or expanding lines. We asked Calabrese how he speaks about the opportunity of growing the region around transit.
“Every day, I encourage business owners to build and locate where we can serve them. I was at a ribbon cutting in Midtown which is adding development since the HealthLine. Where transit is people will locate and thrive. We don’t do well when they move to exurbs and then ask if we can we have transit service.”
Cuyahoga County would be in good company if it introduced a local tax for transit. In the 2016 elections, $200 billion in local taxes for transit were on the ballot. Atlanta, Charleston, Indianapolis, Los Angeles and Seattle voters agreed to increase their sales tax contributions to help raise billions of dollars for the most ambitious expansions of public transit and sustainable development plans in the country.
The Cuyahoga County Council Regional Transportation Subcommittee next week will make its recommendations to county officials. It calls for state transit fund and a local tax. Possibilities include increasing parking fees.
Speaking to those familiar with the recommendations, they emphasize that the county, city and the private sector need to speak up about RTA’s role as a regional driver of growth.
Sales tax isn’t the only way communities are supporting the growth of transit. Chicago Mayor Rahm Emmanuel recently approved a new fee on ride hailing services like Uber and Lyft that will go to Chicago Transit Authority. Doubtful a ride hailing fee will close Northeast Ohio’s transit funding gap completely, it could contribute a piece.
“We would welcome any opportunity we can to work with the city to help find additional local funding for public transit,” said GCRTA External Affairs Manager, Jose Feliciano.
“We hope there is a fix,” Calabrese concluded. “I’ve not overreacted, but we need to know, is there any assistance coming from the state?”
Calabrese requests calling or emailing your state senator and asking that the Ohio Senate make the state's 62 transit agencies whole through a full funding plan before the end of its session this month.