Miami-Dade County

For Miami-Dade transit, a sales tax stretched thin

Metromover offers free rides thanks to a transit sales tax in Miami-Dade County.
Metromover offers free rides thanks to a transit sales tax in Miami-Dade County. MIAMI HERALD STAFF

The good news: Riders of Miami-Dade County’s transit system pay about $1 million in fares every 72 hours. The bad news: Miami-Dade’s transit system costs about $1.5 million a day to operate.

That wide gap between the transit system’s operational costs and the roughly $315,000 that passengers pay in fares on an average day captures some of the challenges facing public transportation in the county.

Nobody really expects transit systems to break even — they’re heavily subsidized throughout Florida and the rest of the country. In Miami-Dade, county, state and federal dollars plug the gap to keep the system solvent. But the daily operational deficit at Miami-Dade complicates an escalating fight over how best to address the county’s gridlocked highways and under-funded transit system.

With traffic getting more political attention, elected leaders are wrestling with how to find money to sustain current operations while also expanding transit services to other areas of the county.

For this Dade Data post, we’re breaking down two bits of budget information for the county’s transit system. The first looks at where Miami-Dade’s transit-tax dollars are slated to go in 2015. The second looks at how Miami-Dade pays for its transit system — using the transit tax, general taxes, fares and government grants.

Miami-Dade’s transit sales tax was approved in a 2002 referendum, and it increased the tax on purchased goods in the county a half-penny per dollar, from 6.5 percent to 7 percent. The extra money was promoted as a way to subsidize free rides for seniors citizens and all Metromover passengers, who previously paid 25 cents to ride on the driverless cars that run through downtown Miami.

The main selling point was an historic expansion of public transit, including a new Metrorail line to the western suburbs and another one running up 27th Avenue. The new tax would pay for the construction as well as the staff needed to manage the new buslines and Metrorail routes. But the original projections tied to the tax plan proved off-base, and after 13 years only one major expansion — a two-and-a-half-mile Metrorail extension to Miami International Airport — has been completed.

This year, about 37 percent of the transit tax is slated for projects — most of it in the form of debt payments for $1.5 billion in bonds sold to build the MIA line, purchase new Metromover cars, improve bus and rail facilities and pay for road projects. Another 38 percent subsidizes daily operations at transit — paying for a portion of the $422 million gap between yearly fare collections ($115 million) and the system’s $537 million operating budget.

Part of the original rules for the transit tax call for a large chunk of the money to get transferred to cities and towns for their own transit needs. This year, municipalities are set to receive just under 20 percent of the money, according to budget projections. That amounts to a $51 million transfer from the county to cities.

(For these calculations, we included the full transit-tax budget, which includes $224 million in projected collections for 2015 as well as about $48 million in reserves and transfers tied to collections from prior years. If just the 2015 revenue were used, municipalities would receive 23 percent of the total, as called for under the county rules governing the tax.)

Reserves to be spent in 2016 and beyond make up about 6 percent of the 2015 budget for the tax.

Transit-tax reserves are now in the middle of a push to expand Tri-Rail into downtown Miami. The publicly funded rail system needs $69 million to create a station in All Aboard Florida’s new for-profit rail depot in Miami, and Miami-Dade Mayor Carlos Gimenez wants to tap transit-tax reserves for a $14 million contribution. Miami would use its own transit-tax reserves, from the municipality distributions, for a $5.5 million contribution under a tentative plan that city commissioners endorsed last week.

Broken promises from the 2002 referendum have made the transit surtax a frequent lightning rod among transit advocates and others, especially with transportation funding under pressure amid a countywide budget squeeze in 2015.

Gimenez held off on a bus-fare increase this year, and also delayed a $6 million planned revenue increase for transit from the county’s general fund. Now the Gimenez administration is pursuing a private operator for Metromover in an effort to reduce costs. County Commissioner Esteban “Steve” Bovo wants to raise hotel taxes to fund transit projects, while fellow commissioners Sally Heyman and Barbara Jordan want voters’ permission to generate new dollars by bringing back Metromover fares.

Much of the financial pressure centers around Miami-Dade’s $618 million transit budget, which combines the operating expenses ($537 million) and the $81 million capital budget for projects, purchases and debt service. Transit’s operating budget is the second largest in county government, behind the police department’s $558 million forecast for 2015.

To fund the total transit budget, Miami-Dade plans to spend about $185 million this year from general taxes. That’s about 30 percent of the transit budget. Most of that $185 million from property taxes in the general fund, with $17 million coming from a county gas tax.

An additional $174 million (28 percent of the transit budget) is slated to come from the transit tax itself, with fares accounting for about $115 million (19 percent). State and federal grants make up most of the rest, a 19 percent share of the $618 million budget.

Dade Data is an online feature of The Miami Herald that explores the numbers behind Miami-Dade County government.