Akron METRO Doubles Down

Akron METRO the local transit authority is planning to stem it's fiscal woes by placing a sales tax increase on the ballot. According to the report in Tuesday's ABJ and the METRO rider email I subscribe to, the Board of Trustees agreed to place a .25% (that means ¼ percent) increase on the March ballot. The article in the Beacon spares much of the detail on what METRO will have to cut in the event the tax increase measure fails. The information from METRO's email goes into how cuts in State funding and triple digit increases in fuel mean tough times. It continues:

METRO has been fiscally responsible, raising bus fares by 60 percent, cutting more than 30 percent of service, eliminating 52 employees, and freezing wages for more than three years. METRO is facing a $1.8 million deficit in 2008 and $1 million in 2009. Without additional income, METRO and METRO SCAT will be facing some of the most critical service cuts of its history, including eliminating up to 50 additional positions in 2008...

The old ”METRO has had no new sales tax revenue since 1990” narrative is also thrown in for good measure. Never mind that sales taxes by design are indexed with inflation so while the rate has not increased the revenue collected has.

Times are tough for local governments and authorities like METRO and are probably not going to pick up in the near future. Unfortunately for them they don't have many options other than cutting staff or service. They already raised fares in the last go around so that is off the table (except for the North Coast Express). I had an informal conversation with the finance director this summer and he said that the last fare increases actually reduced ridership enough to cancel out the additional revenue that was generated. So here they are having to mess with the grand-daddy of all local taxes. I know property tax is a big fish but the sales tax is a broader and more pervasive tax, some (actually most) would even say regressive in nature. Let's face it the chances of that passing in March can't be that good. Throw in tougher economic conditions on the horizon for the average person and it seems almost impossible.

Long term all of the transit authorities will have to pool resources and think big picture. I am of course referring to a tapping into a new gasoline tax to fund operations and development of local transit systems. When and how this will happen is beyond the scope of what i can do here. I'll pick up this again in a month or so.