State Should Make Transit Agencies Whole

COLUMBUS, Ohio, April 5 -- Policy Matters Ohio, a 501(c)3 non-profit and nonpartisan state policy research institute, issued the following news release:

Ohio's 61 public transit agencies badly needs a boost from the state. Governor Kasich's 2018-2019 budget increases funding for transit by $10 million. But by 2019, changes to the state sales tax base essentially offset the state's $40 million investment in public transportation.

Due to federal requirements, Ohio removed Medicaid managed care organizations (MCOs) from the state sales tax base. Many local transit agencies and county governments piggyback on the state sales tax base. With the removal of MCOs, transit agencies stand to lose nearly $40 million by 2019.

Today Policy Matters Ohio Consultant Jack Shaner submitted testimony to the House Finance Committee. He pointed out that the state found a way to make itself whole, but left transit agencies and counties out of the fix.

"The new tax has been presented as a done deal because it meets federal approval, but legislators have not been given the opportunity to analyze how it might be configured to replace the old tax more completely," he said. "We call for an open and transparent analysis and a replacement tax that holds public transit and counties harmless."

Policy Matters called for an additional $25 million in General Revenue Fund dollars to be used as matching funds so transit agencies and smaller cities and rural areas can capture federal capital dollars to restore and expand their fleets and services. Shaner said the state could generate revenue by eliminating some of Ohio's $9 billion in tax expenditures. Governor Kasich proposes elimination of several tax breaks in the executive budget for 2018 and 2019, and suggested chopping even more in the budget for 2016 and 2017.

"Ohio needs a 21st century transportation system that includes roads and highways but also includes public transit, passenger and freight rail, and walkable, bikeable streets," Shaner said. "Funding that could make this possible has been eroded over time, and is further reduced by the end of this biennium."