State contributions to public transit going up, but is it enough?

State contributions to public transit going up, but is it enough?
Posted at 12:20 PM, Mar 13, 2017
and last updated 2017-03-13 13:03:11-04

CINCINNATI -- February brought mixed news for public transit in the Tri-State.

On one hand, the Ohio House Finance Committee last week cleared a bill, HB 26, that, among other financial boosts for transportation projects across the state, would increase annual state funding for transit systems by as much as $10 million, from roughly $20 million to $30 million each year. The bill now faces approval by both houses of the General Assembly.

On the other hand, a recent analysis by nonprofit policy think tank, Policy Matters Ohio predicts that by fiscal year 2018-19, funding for Ohio transit systems could yield an $80 million shortfall between the state budget and recommendations presented in the Ohio Department of Transportation's 2015 Transit Needs Study.

What does that mean for the Southwest Ohio Regional Transit Authority, which operates the Cincinnati Metro bus system and oversees the city's streetcar operations?

It's unclear, according to SORTA spokeswoman Sallie Hilvers.

"We don't know what the impact will be yet for SORTA," she told WCPO.

According to ODOT's study, 2015 saw a $650 million shortfall in public transit funding across the state, a gap the agency predicts will grow as wide as $1 billion by 2025. To address this, ODOT recommended the state provide $120 million in 2015, increasing to $185 million in contributions over the course of the next decade.

Thing is, while state funding for public transit agencies across Ohio will actually increase from this year to next, it will still fall short -- very short -- of ODOT's recommendation, promising only $40 million in state funds.

The funding shortfall is exacerbated by a pending change in state tax procedure, which allowed for transit agencies to benefit from state sales tax on Medicaid managed care organizations. Beginning in 2018, state tax law will remove MCOs from the sales tax structure, which will negatively impact local sales tax revenue, as well. A one-time Band Aid was approved for 2018 to compensate for this lost revenue, but no such fix is in place for 2019.

"Ohio transit systems that depend on sales tax are losing revenue since Medicaid services no longer being taxable beginning this year," Hilvers said.

The change's impact on SORTA, though, remains unclear because, out of the state's major metropolitan regions, Hamilton County is the only one not to rely on a local sales tax to fund transit services. Rather, the majority of Metro's funding comes from the city of Cincinnati's earnings tax: The bus system receives approximately three-tenths of 1 percent of the of the earnings tax paid by people who work or live within city limits.

In 2017, that totals nearly $54 million, or 56 percent of Metro's $96.1 million budget for 2017. Here's a breakdown of this year's funding sources:


Notably the smallest piece of the pie: state funding, coming in at $800,000, or .8 percent of Metro's budget.

SORTA's need for more money is clear: A report released to the transit agency earlier this year shows the agency is staring down the barrel of a more than $300 million shortfall over the next 10 years, and ridership has been decreasing slowly in recent years, meaning a slight drop in fare revenue.

This prompted SORTA's board of trustees to call on transit officials to assemble the Metro Futures Task Force in 2016, which -- among other recommendations -- presented the board with three possible sales tax options that could appear on the 2017 ballot: a half-cent, a three-fourths cent and a 1-cent sales tax increase, countywide. The task force found that only the three-fourths cent and 1-cent options would be sufficient to close the budget gap.

But Hamilton County Commissioner Todd Portune, a Democrat, said he doubts a local sales tax levy could gain support among Hamilton County voters. In a previous interview with WCPO, Portune said, "I don't think it will pass. There's so many reasons why any kind of opposition to this tax will send it down.

"It's the wrong time. It's the wrong year," he said. 

In the meantime, the General Assembly still must approve the measure before any of the state's struggling transit agencies could see any of that additional $10 million, and the bill does not specify which agencies would receive any aid.

Pat LaFleur reports on transportation for WCPO. Connect with him on Twitter (@pat_laFleur).