Top county Dem: Bus tax 'wrong solution' to $1 billion need

Greater Cincinnati's bus system needs more than $1 billion - that's with a 'b' - and would need a larger-than-expected sales tax to raise the money.

That was the recommendation from a consulting firm hired to look at whether the region needs a county-wide sales tax to subsidize the bus system. The firm told the public Tuesday a half-cent sales tax isn't enough to make the region's bus system genuinely useful for people looking to get to jobs or school.

The Southwest Ohio Regional Transit Board says it needs anywhere from $1.1 billion to $1.5 billion over ten years to make the improvements the system requires. To get that much money, the system would need a sales tax of at least three-fourths of a cent, the consulting firm AECOM told SORTA's board Tuesday.

Hamilton County's total sales tax is now 7 percent, which is less than most Ohio counties. But a three-quarter cent increase would give the county the state's second-highest sales tax rate, behind only Cuyahoga County's 8-percent tax.

No decisions were made at the SORTA board meeting. A decision to put a levy on the November ballot is due Aug. 9. AECOM, a worldwide consulting firm, was paid $249,315.

“SORTA is at a crossroads, and we're nearing the time when we need to decide which path to take,” said Jason Dunn, SORTA Board Chair.

“Either way, we are reinventing Metro – for the better with more service and amenities, or for worse with decreased access to jobs, school and healthcare. But the most important step right now is to get feedback from the community and our leaders about these potential improvements and the direction they want SORTA to take.”

Hamilton County's current 7-cent per dollar sales tax breaks down this way: 5.75 cents for the state, a half-cent sales tax for county operations, a half-cent sales tax to fund the professional sports stadiums and a quarter-cent sales tax to pay for renovations at Union Terminal. SORTA has the ability to put up to a 1 cent sales tax on the ballot. Eight Ohio counties have dedicated transit taxes, along with portions of four other counties.

A sales tax is a county-wide tax, but county commissioners have no say in whether SORTA puts a tax on the ballot because state law allows them to do so without the commissioners' approval.

That may be a good thing, from SORTA's perspective, since support from a majority of commissioners seems unlikely.

Democrat Todd Portune, president of the three-member board of commissioners, said he has repeatedly told SORTA's leaders the time is not right to seek a tax increase. Portune is a strong advocate of public transportation, but he said SORTA needs a better plan and a truly regional approach to transportation before it asks voters for more money.

He said he also fears a failed tax initiative would sour voters on future proposals, hindering efforts to improve regional transportation for years.

"It's the wrong solution at the wrong time," Portune said of the proposed sales tax. "It's not going to help SORTA and it will set back regional transportation for a decade."

Another concern among commissioners is the county's overall sales tax rate. Portune and Republican Chris Monzel both said an increase from the current 7-cent tax could make the county less attractive to businesses and hurt economic development.

"My initial reaction is not to look at a tax increase," Monzel said. "There's a lot of questions I have about it."

Monzel said voters also may not like the idea of supporting SORTA because it's the agency in charge of Cincinnati's streetcar.

SORTA is overseeing the streetcar, which has been the source of political debate for years, and its contract forbids using money for buses to support streetcar operations. But Monzel said county voters may share his concern that their tax dollars could indirectly bankroll the streetcar, which has seen ridership decline in recent months.

SORTA doesn't need the commissioners to move forward, however, and is considering three options for a possible sales tax: a half-cent increase, a three quarters-cent increase and a one-cent increase.

All options assume funding from the City of Cincinnati's earnings tax, which provides roughly $50.6 million a year to pay for the system, would be eliminated, essentially shifting the source of SORTA's funding from the earnings tax to the county-wide sales tax.

The Southwest Ohio Regional Transit Authority projects a budget deficit every year after 2017, totaling $170.4 million by 2027. The biggest problem is decreased ridership as jobs move to areas of the county not adequately served – if at all – by public transit. Metro service is mostly limited to the city, as its primary public funding comes from a portion of the City of Cincinnati earnings tax. SORTA has said without a change to its funding structure, it would raise fares and reduce services -- or both, even further limiting access to jobs, school and services.

Board member Brendon Cull, senior vice president of the Cincinnati USA Regional Chamber, called for the agency to have a back-up plan, should the board decide not to go forward or if voters reject the idea.

The half cent option

A half cent per dollar would bring in $72.9 million a year. But the consultants said that would not be enough to address the budget deficit and would not improve service to the community. Service reductions or fare increases would still be necessary.

The three-fourths cent option:

This option would bring in $110.7 million a year. With this tax, SORTA could make limited improvements, including a 22 percent increase in service hours. Thirty-two of 45 routes would have service every 20 minutes or sooner and three new limited-stop, high-frequency Metro*Plus routes would be added. But no new crosstown routes or circulators would be added.

The one-cent option:

This would bring in $149.5 million a year. It would address the budget deficit and fund the full Reinventing Metro plan in Hamilton County, including a 55 percent increase in service hours. Forty-eight of 55 routes would have service every 20 minutes or sooner, 30 routes would have earlier and later service for better job access. Three new limited-stop, high-frequency Metro*Plus routes and three new circular routes would be added, along with a new park and ride.

In 2016, the Metro Futures Task Force, comprised of business and community leaders, found that SORTA’s current business model is unsustainable and recommended that SORTA’s local funding should be a permanent sales tax, not the City earnings tax.  It was the only way to provide enough money to cover the budget deficit, provide more service and better connections and improved access to jobs, school, shopping and medical appointments, the task force found.

Metro provides about 16 million rides per year, half related to employment.

To request a presentation, email ReinventingMetro@go-metro.com.