Hamilton County voters make history, raise sales tax to fund transit and road improvements

Issue 7 passed by a 0.7% margin
State contributions to public transit going up, but is it enough?
Posted at 9:19 AM, May 14, 2020
and last updated 2020-05-14 16:24:30-04

HAMILTON COUNTY, Ohio — Local voters made history Thursday when they passed a sales tax increase to boost bus service and road improvements throughout Hamilton County.

The final count, certified by the Hamilton County Board of Elections Thursday morning, was 67,698 "yes" votes to 66,718 "no" votes. Issue 7's passage marks the first time county voters have approved a sales tax hike to support transportation improvements, and the first time a transit-oriented tax of any kind gained local voters' approval in nearly 50 years.

Cam Hardy heads up the Better Bus Coalition, a grassroots transit advocacy organization based in Cincinnati. The organization provided assistance to the political action committee, Move Forward Hamilton County, which pushed for Issue 7.

"This is refreshing," Hardy said. "It shows me that grassroots activism works."

When Pete Metz set out to pass the measure, he knew it would be a long, tough campaign. But he and his team at the Cincinnati USA Regional Chamber didn't anticipate a pandemic and a subsequently unconventional election process that has dragged on for weeks.

BACKGROUND: What voters need to know about Issue 7
RESULTS: Ohio 2020 primary election

"We knew it was going to be a two-step process," he said. "What we couldn't predict was that it would become a two-step process, plus some overtime, plus a bit more waiting.

"(But) if we did nothing, our transit system in Hamilton County would have disappeared effectively," Metz continued.

In the initial count on April 28, Hamilton County voters cast 65,943 "yes" votes and another 65,318 "no" votes for Issue 7 -- a virtual tie less than half a percentage point apart. That margin widened Thursday to 980 votes in favor, a 0.7% difference. In Hamilton County, any election result with a margin of 0.5% or thinner triggers an automatic recount.

The measure will raise the county sales tax by 0.8% -- to 7.8% -- in order to create a new funding source for Cincinnati Metro bus service and transit-adjacent road and bridge improvements. Its passage also implements city of Cincinnati Issue 22, approved last November, and lowers the city's earnings tax by 0.3%. Proponents expect the sales tax hike will generate $135 million annually: 75% will go to Metro, while the other 25% will go toward road and bridge improvements on or adjacent to Metro fixed bus routes.

University of Cincinnati economics professor, Dr. Michael Jones, has reservations about those projections. In February, he released a report that estimated the actual revenues will be about 5% lower than what's projected, due to the impact higher prices at the cash register could have on consumer spending.

"When proponents claim that the 0.8 sales tax will raise $130 million for public transit and infrastructure, the actual collection will be roughly $5 million less," Jones said. He based that prediction on an analysis of a recent 0.25% sales tax levy in Hamilton County, implemented in 2015, which found that levy raised about 96% of the projected funds. Jones said his conservative estimate of how much the 0.8% increase could raise is 95% of projections or higher.

Jones also called a 0.8% increase to the sales tax "unprecedented" in the state of Ohio. "There's a limit to how much Hamilton County can raise its sales tax. So if the county needs to raise more revenue, they've kind of used everything up. They've gone from 7 to 7.8 (percent). They can't go much higher."

Now Jones also worries the COVID-19 pandemic means poor timing for extra investment in public transit. Beyond his general hesitation to raising the sales tax at the start of what could become a lengthy economic recovery from the pandemic, he wonders what bus ridership will look like going forward as social distancing recommendations continue into the summer.

"We're talking about making infrastructure investments in public systems in which a lot of people aren't going to ride it anymore because of the COVID-19," he said. "I feel a little bit like we've hamstrung our government officials."

Metro ridership saw a steep decline in the weeks following Gov. Mike DeWine's stay-at-home order. It remains unclear how ridership will bounce back as more and more industries reopen across the county in the coming weeks.

The sales tax increase will take effect Oct. 1, and the earnings tax rollback will take effect Oct. 2. The Southwest Ohio Regional Transit Authority, which will collect the additional sales tax revenue, will begin seeing the new funding in January 2021.