RTA News

Sept. 24, 2009

Welcome to transit economics 101

The price of a fare does not cover the cost of a ride

CLEVELAND � When you pay $2.25 to take a bus to work, that fare pays for your ride, right?

Wrong.

Every ride you take, on every public transit system in the nation, is subsidized by taxpayers. The fare you pay only covers a portion of the actual cost of providing the ride.

That means that every transit system in the nation loses money on every customer.

Actually, the average fare collected by RTA is closer to $1.00, because of senior discounts, and multiple uses of the All-Day Pass and Monthly Pass.

Welcome to transit economics 101, which is vastly different than the principles used to operate a retail store.

At the Greater Cleveland Regional Transit Authority (RTA), the farebox covers only about 20 percent of the total cost of providing each trip.

Here are some facts that every rider and taxpayer in Cuyahoga County needs to know and understand.

Where does operating money come from?

65 percent from the local sales tax. In Cuyahoga County, for every dollar you spend, a penny of the sales tax goes to RTA.
20 percent from passenger fares
15 percent from federal and state grants

Where does RTA spend its operating money?

65 percent for operators & support labor
7 percent for fuel and utilities
18 percent for parts and supplies
10 percent for transfers to debt service, capital improvements and insurance

What caused the financial challenges at RTA?

An $18.5 million drop in sales tax revenue, from $173.5 million in 2008 to $155 million in 2009. This was caused by the deepest national recession in the last 70 years, and was completely outside RTA�s control.
State of Ohio funding cuts of 33 percent

Capital funds vs. operating funds

RTA receives federal funding that can only be used on capital projects, such as buying buses and rebuilding rail stations. Federal funds cannot be used to cover operating costs. This year, most of the federal stimulus funds were in this category.

For more information

Go to www.rideRTA.com/budgetchallenges

FOR MEDIA INQUIRIES ONLY:

Jerry Masek, 216-566-5211