DALLAS -- The Greater Cleveland Regional Transit Authority is looking at a sales tax or property tax increase to address a looming $20 million budget gap.
A Dec. 19 report from the Regional Transportation Advisory Committee said boosting the local sales tax by 0.1% to 8.1% could produce about $20 million a year for the RTA. A one-mill property tax to support public transit would also generate enough money to offset the loss of tax revenue from Medicaid managed-care sales, the report says. Voter approval would be needed for either tax. The committee is a volunteer panel formed by Cuyahoga County Council President Dan Brady.
The RTA Board of Trustees can put a sales or property tax measure on the ballot.
The RTA faces the loss of roughly $20 million per year beginning in the fourth quarter of 2017 as a result of changes on how statewide and local sales taxes are collected on managed healthcare expenses. Cuyahoga County will lose $25 million annually under this same change.
The state's temporary sales tax replacement will fill most of this gap for a short time; however, this funding will run out in late 2018 or early 2019.
“While it was hoped that the finalized state budget would provide a permanent offset to this loss, at this time it provides an offset only through the fourth quarter of 2018,” said RTA CEO and General Manager Joe Calabrese.
RTA and seven other transit systems in Ohio will need to look to new revenue sources or plan to reduce needed services in the upcoming months if this situation is not addressed, Calabrese said.
Calbrese said that the RTA aims to put together a plan in the first quarter of 2018 to either find new revenue sources or reduce expenses, in order to have a sustained and balanced budget.