Sales tax change, cuts threaten SARTA’s plans

June 25--CANTON -- Kirt Conrad, executive director of the Stark Area Regional Transit Authority, has big plans for the transit agency.

SARTA's first three hydrogen-powered fuel cell buses are expected to make their debut on Stark County streets for regular service by Tuesday, with 11 expected to be serving SARTA riders by early next year. Seeking to reduce how much his buses pollute, Conrad wants to double the number of SARTA's compressed natural gas buses to 80 and have 20 fuel cell buses by 2022.

He also wants to establish synchronized service with neighboring transit agencies to make it easier for riders to travel between counties on public transit. That would include the agencies using the same fare boxes, so riders could use one transit pass card on all three systems. And SARTA has applied for a federal grant to develop software to coordinate service with ride hailing companies like Uber and Lyft to transport riders from bus stops to their destinations.

But budget pressures from the state and the federal government could upend those plans.

In Columbus, negotiators from the Ohio House and the Ohio Senate meeting in a Conference Committee are rushing to reconcile differences in the House and Senate versions of the two-year state budget by Thursday that could result in a $1.2 million a year hit to SARTA's sales tax revenue of about $14.75 million a year starting in October. SARTA collects a 0.25 percent sales tax on all taxable purchases in Stark County and vehicle purchases in Ohio by Stark County residents.

The change is related to a federal mandate that the state is not allowed to apply state, county and transit sales taxes to spending by Medicaid Managed Care Organizations, which arrange services for Medicaid recipients, and not apply the tax to private health insurers.

Possible effects

Conrad said if that happens, he would be forced to eliminate Saturday service, eliminate service after 9 p.m., cut some midday service and cut ride-by-appointment service for people with disabilities and seniors by up to 40 percent by fall 2018. That would affect plans to coordinate paratransit service with Akron Metro and the Portage Area Regional Transit Authority so riders could more seamlessly travel from one county to another.

On top of that, Conrad said, the Trump administration has proposed 43-percent funding cut to the Federal Transit Administration, which provides federal grants to SARTA and local transit agencies to buy buses, cover the costs of maintaining buses and maintaining and upgrading transit facilities.

Even if Congress cuts that funding for federal fiscal year 2018, which starts Oct. 1, by a lower amount, any cut could slow SARTA's bus purchases, delay phasing out old, diesel buses and possibly affect purchases of equipment such as fare boxes.

SARTA would have to decide whether to cut services further to fund the purchases of new buses, facility upgrades and equipment. And any program to use Uber or Lyft might have to wait. Conrad said not including grants that funded the fuel-cell bus program, SARTA gets about $4 million to $7 million a year in federal funding.

"If the federal cuts go through as proposed, it would be pretty devastating for transit not only in Ohio but the country," said Conrad. "I don't think SARTA service would cease in Stark County, but it would definitely not look like anything like it looks now."

Lobbying effort

SARTA's chief is also the board president of the Ohio Public Transit Association and has visited Columbus and Washington, D.C., to lobby state and federal lawmakers to preserve transit funding.

His more immediate concern is persuading top Ohio House and Senate leaders to replace the sales tax revenue lost by SARTA and transit systems due to the elimination of applying the sales tax levied since 2009 on spending by Medicaid Managed Care Organizations or MCOs. The state has gotten federal approval of a provision in the budget that would allow Ohio to levy a $26- to $56-a-month charge for each person receiving health services from a Medicaid MCO and $1-or $2-a-month fee per person for all other MCOs. That would offset the state's loss of about $600 million from the Medicaid MCO sales tax change.

But Gov. John Kasich's administration has opposed levying a similar user fee to permanently offset the transit agencies and counties losing $200 million a year in sales tax revenue. The state budget includes its proposal to only temporarily offset much of the loss in revenue for two years.

John Charlton, a spokesman for the Ohio Office of Budget and Management, said the administration felt that adding another user fee for transit agencies and counties "was going to raise health care costs too much" and "it would negatively affect citizens of Ohio." He said 85 percent of the state's general revenue fund already goes to local governments.

He pointed to comments in testimony Thursday before the state budget Conference Committee by the state's budget director, Tim Keen.

"The administration has been quite clear that we do not believe that a permanent replacement is in order given the fact that this sales tax base item has only existed for a five or six year period of time," Keen said. "And it doesn't make sense to us to replace ... revenue permanently, revenue that has only been available for a temporary period of time."

Charlton said he did not have information on how the administration determined that a user fee to offset the state's revenue loss from the sales tax change was not excessive but yet a user fee to offset the transit agencies' and counties' revenue losses would be excessive.

Conrad said that while the MCO sales tax revenue was new revenue after 2009 it has not replaced the sales tax dollars lost due to the 2008 to 2009 recession if rising costs to the agency are taken into account.

Conrad said about 4,000 riders use SARTA buses on Saturdays.

If SARTA has to eliminate Saturday service due to the loss of MCO sales tax revenue, "how are they going to work? It's not going to improve the economic situation in our community," he said.

Eleventh hour

State Rep. Kirk Schuring, R-Jackson Township, said late last week he and others are "feverishly" working on crafting a provision to offset the revenue loss for the counties and transit agencies before the state budget is finalized. He declined to reveal the details of the proposed legislation. It would have to be approved by Ohio House Speaker Clifford Rosenberger, R-Clarksville; Ohio Senate President Larry Obhof, R-Medina and Ohio Gov. John Kasich, who can line-item veto budget provisions.

Schuring said such a fix has not been included in the House and Senate versions of the budget so far because lawmakers had not yet finalized language that would sufficiently address the concerns of House and Senate leadership, the Kasich administration, the transit systems and the counties.

"We've got ideas that we think could win the day. ... We're looking to make something that's going to be sustainable for a long period of time," said Schuring, who as as the Speaker Pro Tempore is the second highest ranking member of the House Republican leadership team. "We're in the 9th inning, and it's not over yet."

Reach Repository writer Robert Wang at (330) 580-8327 or [email protected].

On Twitter: @rwangREP

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