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RTA continues to debate how much and when to ask for tax hike

July 31, 2018

RTA continues to debate how much and when to ask for tax hike

CLEVELAND, Ohio—For trustees of the Regional Transit Authority, the question doesn’t seem to be whether to seek the authority’s first tax hike since its founding but what kind, how much and when.

Trustees weighed the pros and cons of different taxes and times at a special meeting Tuesday morning. Trevor Elkins urged a measure in November. Sonny Nardi and Valarie McCall warned about the dangers of haste.

Among absent members, President Dennis Clough and trustee Leo Serrano have already said they thought it was too late for November.

Members tended to support a sales tax over property tax as more likely to pass. The board would have to approve a measure by Aug. 8 to put it on the November 6 ballot.

There was no debate today about RTA’s needs. State aid for transit has plummeted, sales tax receipts have slumped, and a deal last year between the state and federal governments denied counties and transit agencies sales taxes on Medicaid payments for managed care. Those taxes gave RTA $20.2 million per year on average, or about seven percent of its operating budget.

Leaders said RTA is crucial for residents’ needs and the region’s growth. The authority takes people on 40 million trips per year, 60 percent of them for work, 23 percent for school and 9 percent for health care.

Brian Wright, a leading local campaign professional invited to the meeting by the board, presented pros and cons of a tax bid this November, next May and November 2019. He said this November’s election would have the biggest turnout and the most sympathetic one to taxes.

But he warned that it would be hard to wage an effective campaign that soon. He thinks the board would have to raise roughly $750,000, enlist support from many local leaders, get broad community input and fine-tune a campaign message accordingly.

Joe Calabrese, RTA’s chief executive officer and general manager until September, said it would be helpful to wait for the results of two studies not due until after November’s election: a Greater Cleveland Partnership study of RTA’s operations and a Cleveland State University study of RTA’s economic impact.

Calabrese reviewed the authority’s needs, including a backlog of about $500,000 in capital improvements, mostly to replace obsolete trains.

“We can maintain our current operations through the rest of ’18 and ‘19, but in ’20 the board would have a choice to either find new revenues at the calamity of our customers and the region,” he said.

After the meeting, Calabrese said flatly that he thought it was already too late to pass a tax in November.

RTA began in the 1970s with a 1 percent sales tax. It could ask voters for up to 1.5 percent total. Each 0.1 percent would raise about $20 million.

RTA could also seek a property tax. Each mill – $1 per $1,000 of assessed property value – would raise about $26 million per year.

Calabrese said 90 percent of the nation’s transit tax measures passed last year. But opposition is spreading from Americans for Prosperity, an anti-tax group founded by industrialists Charles and David Koch. Local and state leaders have said they’re ready to fight any RTA tax.

Trustee Elkins said the sooner RTA tries the voters, the more chances it will have to try again. “If we fail, we sharpen our message.”

But Trustee McCall said, “We need a lot of things to move forward. We have got to take the temperature of the residents of Cuyahoga County. I just don’t know how we’re going to do that by August .” She said the board could always pay for a special election if necessary.

Several audience members urged haste. “We can’t ask people to continue to suffer because you guys were slow,” said Marvin Ranaldson of the advocacy group Clevelanders for Public Transit.

But George Zeller, an economist and an emeritus member of RTA’s Community Advisory Committee, said a hasty measure would probably fail, making it harder to pass one next year.

The board plans to call another special meeting about taxes before the Aug. 8 deadline.

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