Transit Fund is Overflowing

Transit Fund is Overflowing

Allegheny County’s Transit Fund–the Fund that holds the revenues generated by taxes on liquor/malt beverages and car rentals–is running a surplus, again.  The most recent Taxpayer Alert from the County Controller’s office shows the Fund’s surplus was $16 million in 2017–almost the same amount from 2015, a year that the Fund was analyzed in a 2016 Policy Brief.

As part of the 2007 transportation legislation (Act 44) the General Assembly permitted counties of the second class to tax liquor and malt beverages and car rentals to “obtain financial support for transit systems”.  County officials argued that they did not want to match state transit money with property taxes; the statute gave the County permission to levy the taxes, and County Council made them effective.  Not long after the taxes were first levied the County tried to use money beyond the local match for roads and bridges.

The surpluses occur after the County makes its operating assistance match, provides for a capital match, and then provides for debt service according to some complicated, interwoven arrangement.  Despite the surplus the Regional Asset District provides $3 million per year as part of local funding.

So what is the plan for the money above and beyond what is required for the match?  Two years ago County budget officials wanted to hold onto money in the event the operating match amount increased while the Controller called for the money to go back to the Port Authority to expand service.  That call was echoed in the latest Alert, however this time around the Controller notes that a project on the drawing board, the BRT in Uptown, “…could consume the Transit Fund surplus and the discretionary funds it collects each year.”  That project is estimated at $195 million with half expected to come from the Federal Small Starts program.  How about a proposal to reduce the levies so that there is a bit of a surplus but not to the level it has been?