CLEVELAND - The Board of Trustees of the Greater Cleveland Regional Transit Authority (RTA) approved an interim 2018 operating budget at its meeting on Dec. 19, 2017
This budget will be adjusted in the first quarter of 2018 to reflect the final disposition of the sales tax loss from Medicaid managed care organizations (MCO), which is not yet finalized in Columbus.
That loss is due to a change in how Statewide and local sales tax is collected on managed healthcare expenses. As a result, RTA’s collection of sales tax was reduced by $20 million annually beginning in the fourth quarter of 2017. Cuyahoga County will lose $25 million annually under this same change.
An effort last week by State legislators resulted in an additional sum of funds to be allocated to Counties and Transit Authorities in the last quarter of 2018 to partially offset this loss.
“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.
“We want to thank all Northeast Ohio Legislators, both in the House and Senate, and both Republicans and Democrats, for their support and efforts to find a permanent replacement for this loss of revenue,” said Calabrese.
“Actions to date will help mitigate the loss of MCO sales tax revenue in 2018. But it does not, however, affect the ongoing loss of $20 million every year after that,” he said.
Currently, RTA invests approximately $800,000 per day in serving the residents in Northeast Ohio. As a result of this loss, RTA will need to reduce its expenses by approximately $55,000 per day, beginning in 2019.
“We will work diligently through the first quarter of 2018 to put together a plan to either find new revenue sources or reduce expenses – or likely both – in order to have a sustained and balanced budget,” Calabrese said. “During a time when people are asking RTA to do more and to provide better connectivity to jobs, education and health care, we may be forced to provide less."
“A viable public transit system is critical to maintaining and growing our employment base. With convenient public transit, our region can attract new employers, encourage the growth of existing employers, and be more attractive to a workforce that wants to live and work in a place where there are transportation options. But a diminished public transit system could all but destroy our region’s future economic development potential,” Calabrese said.
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