The Southwest Ohio Regional Transit Authority’s Metro bus service has added 70 new buses and is getting 200 more bus benches and a new transit app. But it also faces a big and familiar problem — a $5.8 million budget deficit.
Metro CEO Darryl Haley acknowledged the challenges the bus system faces — which stem from declining ridership, paltry state contributions and a unique local funding formula — as he presented the bus system’s funding request to Cincinnati City Council’s Budget and Finance Committee Monday.
This year, Metro is asking for $53.7 million from the city’s earnings tax, the mechanism that funds about half of Metro’s $102 million budget.
The new stuff Metro is adding isn’t the reason for the deficit. The 27 buses Metro added last year and the 43 it will add this year — including six smaller, more fuel-efficient buses for routes with fewer riders — were purchased with a $26 million federal grant and will save the transit agency $500,000 in fuel and parts for its aging fleet. And Metro saved another $200,000 by buying the smaller buses. Most of the benches the transit agency will add will be funded by advertising revenue, though the agency has spent about $75,000 on 50 benches it is adding right now.
Instead, the system’s budget woes are structural. Most transit agencies get local funding from county-wide levies, which cast a wider net and generally raise more money. Since the 1970s, however, Metro has relied on a portion of the city’s earnings tax — a fairly uncommon arrangement.
Transit activists with the Better Bus Coalition have in the past advocated for SORTA’s board to introduce a Hamilton County sales tax levy as high as 1 percent, which would fund big improvements to the system including bus rapid transit lanes, increased hours and frequency and new routes. SORTA’s board balked at that last year, though pressure from the Cincinnati business community and City Hall could land a levy on the ballot in the future.
In the meantime, Better Bus Coalition is pushing an increase in the city’s earnings tax for Metro to head off service reductions, fare increases or both — moves they argue will contribute to a “death spiral” in which less-reliable, more expensive service cuts further into ridership.
Metro’s precarious financial situation hasn’t been helped by state funding — Ohio’s state funding for public transit per capita is among the lowest in the country. Some help will likely be coming to Metro’s budget via a 10.5 cent increase in the state’s gas tax, however, which will generate roughly $70 million more for public transit every year. That money, however, will need to be divvied up among the state’s 60 transit agencies.
In the past, Metro has drawn from the system’s contingency fund to bridge budget gaps. Last year, SORTA’s board approved using $2.8 million from that fund. This year, however, only $3.8 million remains in the reserve. That money plus $900,000 in surplus funds from last year still leave the transit agency scraping for $1.1 million to make ends meet.
Metro has until October to settle on a balanced budget, which it is required to present per state law.
This article appears in May 8-15, 2019.