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Atlanta Forward

Private operations for MARTA?

4:55 pm September 24, 2012, by tsabulis

Moderated by Tom Sabulis

Following the failed transportation tax referendum — and with a major audit of MARTA about to become public — one local leader says the transit system requires a transformation through funding and governance. Privatization is not a panacea, but should be carefully explored. Another expert writes flatly that MARTA went wrong favoring rail over buses, and privatization would save $400 million.

Commenting is open below following Randal O’Toole’s column.

By Doug Stoner

There is little doubt in the minds of most that an efficient and cost-effective public transit system is necessary in a region the size of metro Atlanta. Most Atlantans are also familiar with the history of our transit system — transportation, after all, is what put our great city on the map for business and residential growth.

For too long, MARTA has remained underfunded and underused. Only two of our region’s counties pay into the system. The state does not directly contribute to MARTA.

MARTA certainly needs a transformation to become the transit system we want and need. MARTA’s board and staff know this and independently engaged KPMG, one of the largest accounting and advisement companies in the world, to conduct an extensive study to make recommendations on what changes are necessary to deliver the system our community needs. That study is nearly complete.

How we get to transit transformation remains the question. Some say privatization is the answer. But vague talk of privatization isn’t enough. There are many ways to involve private enterprise in providing transit services. Finding the mix that is right for Atlanta should be our goal. We must look to the programs nationally and internationally that work best — and understand why they work.

In creating the best transit system, we must all agree, first, on the value of public transit. Ridership is increasing due to factors such as an aging population, rising fuel prices, increasing urbanization, changing consumer preferences, service improvements, and more transit-oriented residential and commercial development.

Next, we should agree on an effective governance model. We must stop bickering about who controls MARTA and focus on efficient delivery of services with an understanding that taxpayers provide the funding, just as they do for roads. Ideas that wind up costing more money than they save should be avoided.

Whether or not we privatize operations, planning, fleet, information, branding, or subsidize services — or nearly everything else — are the questions we should explore. The first bite at that apple will come when the KPMG report is complete. Anything else is premature.

The governance model we select should be a public agency answerable to voters who pay for and use the system.

Ultimately, the transit model we select should consider:

• An appropriate role for private enterprise in transit service provision — a collaborative approach to public-private transit.

• Regular and transparent competitive bids for work.

• Customer satisfaction (quality and affordability).

• An efficient, affordable and reliable metro-wide transit system that attracts not only nondrivers, but also large numbers of travelers who might otherwise drive.

Doing what is right for transit in Atlanta must trump politics.

State Senator Doug Stoner, D-Smyrna/Atlanta, is a member of the Metropolitan Atlanta Rapid Transit Oversight Committee (MARTOC).

MARTA hardly indispensable

By Randal O’Toole

When MARTA took over the Atlanta Transit Co. from its private owners in 1972, transit provided economical bus service to customers who mainly had low incomes, and people who otherwise couldn’t, or preferred not to, drive. But MARTA, which was run by middle-class planners and managers, focused on building an expensive rail system that middle-class professionals like themselves would want to ride.

Four decades later, MARTA has spent more than $4 billion (in today’s dollars) building about 52 miles of rail lines that serve only a small fraction of the Atlanta metropolitan area. Far from increasing transit ridership, MARTA’s ridership is about the same today as it was 30 years ago (and was actually lower in 2010 than it was in 1985).

Given Atlanta’s 150 percent population growth since 1980, that means per capita transit ridership is way down. One reason ridership is so poor is that MARTA hasn’t grown the bus system to keep up with the population: The number of miles of bus service in 2010 was about the same as it was in 1982, the earliest year for which data is easily available.

Before MARTA took over the transit system, nearly 11 percent of Atlanta-area commuters took transit to work. Now, thanks to MARTA’s investment in high-cost rail at the expense of low-cost bus improvements, transit’s share of commuting has fallen to slightly more than 4 percent. That hardly helps to reduce congestion, air pollution, and all the other things transit is claimed to do.

MARTA’s strategy of favoring middle-income train riders over low-income bus riders can legitimately be called “transit apartheid.” While the private company that offered bus service before MARTA was far from perfect, it at least had the virtue of sending buses into the neighborhoods of people who wanted to ride them rather than building expensive rail lines into neighborhoods of people who have three cars in every garage.

The real problem is that MARTA gets little more than a fifth of its funds from fares, so it focuses more on chasing tax dollars than on serving transit users. That means pleasing middle-class elected officials, who have little understanding of the needs of working-class transit users who make up most of MARTA’s customers.

MARTA and its subsidies are hardly indispensable. The private jitney buses that serve parts of Atlanta show private operators can offer a reasonably high-quality service at affordable fares without subsidies. Take away MARTA’s subsidized competition and unneeded government rules, and such private jitneys could actually offer better service to more people than MARTA does.

Privatizing MARTA would save taxpayers $400 million a year, most of it coming from local sources. Some of that money could be used to do things that truly reduce traffic congestion, such as coordinating traffic signals and fixing bottlenecks. The rest should be left in the taxpayers’ pockets.

Randal O’Toole is a senior fellow at the Cato Institute, an independent think tank.

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33 comments Add your comment

Adalyn Watts

September 24th, 2012
5:32 pm

I ride Marta and have heard from people over and over again how much better Marta is than they expected. I have a hunch that one thing that has changed ridership is that there are fewer jobs available for those who would ride Marta. Since starting to ride Marta from Hapeville to the Central Library downtown, I have branched out to ride it to the Fulton County Government Center in Sandy Springs and Trader Joe’s in Virginia-Highland. Why are the non-riders always the ones complaining about MARTA?

KID

September 24th, 2012
5:55 pm

Adalyn:

Folks like Randall O’Toole are simply trying to help the non-paying region make a case for taking over MARTA after the failed referendum on July 31. Good comments!

Arthur Korb

September 24th, 2012
6:08 pm

The Cato Institute Fellow thinks we should privatize MARTA?

Of course he does. And in his argument he mentions nothing about the fact that barriers to entry are precisely what prevent private enterprise from building rail lines for human transportation in the first place. MARTA is vastly different from bussing; busses are cheap. They’re cheap to operate, cheap to maintain, and they drive along on public infrastructure… which is afforded to private enterprise at the expense of the taxpaying public at a discounted rate.

Private enterprise doesn’t build rail because they lack vision. Rail is permanent. Rail requires significant investment in the community, which is why the community publicly funds its development. You’re suggesting we hand over capital we’ve built to be operated by private enterprise?

Every single natural monopoly that is privatized sees price increases. Price increases that are not justified through better service, but through the frictional costs of competition. Advertising, profit margins, externalization of costs on to the community to name a few. Sometimes communities decide to cooperate and build something better for their future.

Cooperation, contrary to your poor argument above, is always cheaper than competing.

Logical Dude

September 24th, 2012
6:41 pm

Randall says: The real problem is that MARTA gets little more than a fifth of its funds from fares, so it focuses more on chasing tax dollars than on serving transit users.

Well, you see. The STATE puts all these limitations on how MARTA can actually use its funding, but doesn’t provide MARTA any funding.
Why wouldn’t MARTA try to at least get a share of the STATE’s transit funds if the STATE is telling MARTA how it can spend?

Matt in Midtown

September 24th, 2012
6:48 pm

Here’s the thing. Conservatives won’t take a bus (other than the Braves shuttle) to get anywhere. Several articles from the AJC’s own Kyle Wingfield have been written about it. They love rail – and I believe MARTA built out the rail system to please people who otherwise wouldn’t have ridden mass transit.

Personally, I don’t care – but then again, I’m a liberal and I’ll ride a donkey if it gets me there. I live in midtown across from Arts Center Station, and I use both rail and bus to get me where I needed to go. My last job was in Norcross – and I often took the Gold Line to Doraville, transferred to Gwinnett County Transit’s 10 bus, and then to their 30 bus to get to work.

nansei

September 24th, 2012
7:02 pm

I am planning to go to China soon, and get them to come over here and bid on a complete transit system, including the financing of same.. There must be a hundred cities major cities in the world with public rail, but we still cluck like hens over our future. I never called in a company like KPMG unless I need political coverage. And we know that any one who listens to the CATO institute is on Oxycodone.

Let’s wake up and get cracking.

Kashad

September 24th, 2012
7:30 pm

“…independently engaged KPMG, one of the largest accounting and advisement companies in the world, to conduct an extensive study…”

Ah yes, another study. And how much will this one cost? Don’t need no stinkin study, we already know what the problems are. MARTA is a dysfunctional transit system that delivers extremely poor customer service and doesn’t go where most commuters want to go. Just shut it down and turn the stations and rail cars into vagrant shelters.

SAWB

September 24th, 2012
7:37 pm

Well, It would seem waiting for the KPMG report before commenting would be the logical thing, but what the hay when has logic ever been a prerequisite for this blog.

We have got to determine once and for all if MARTA is a regional or just a citywide resource. Then we have to implement an appropriate governance and funding mechanism to allow it to achieve that goal. While privatization may make some sense we cannot make that decision until we reach a consensus on the mission of and who controls MARTA.

ByteMe

September 24th, 2012
7:59 pm

Sounds like O’Toole doesn’t live here or understand how Atlanta “region” has grown while MARTA’s “region” was required to stay stagnant. So he proposes the only outcome he knows (check his bio, people!), which is “privatization”, but that would only work if the replacement could expand to fill a larger region… but that’s the same right answer MARTA needs as well, so what’s the point of giving away an asset we’ve already paid for? Fix the problem, don’t throw out the assets that can be part of the solution.

Atlanta Taxpayer

September 24th, 2012
8:03 pm

Of course, we have a guy from Cobb County and a nut from the Cato trying to tell us what we should do with Marta. How about we get the State of GA out of the mix. Instead of Marta having to answer to the State for it’s performance, how about it being held accountable to the taxpayers that fund it. Set up a Citizen Review Board. The state couldn’t miss up an opportunity to meddle in Atlanta’s affairs and has no interest in seeing Marta be successful, but Dekalb and Fulton have a vested interest in it’s success. We do need more busses – and we could afford them – if the State quit telling us how to spend our money.

Charles Douglas Edwards

September 24th, 2012
8:12 pm

The Metropolitan Atlanta Rapid Transit System Authority (MARTA) is in general a well run public transit system and should not be privatized.

MARTA is the United States of America ninth (9th) LARGEST transit system by passenger numbers. The system serves hundreds of thousand of people per day with over 40% stating they would be unable to travel without it.

MARTA is the largest public transportation system in America that does not receive state funding.

Most of their revenue comes from passenger fares and a 1% sales tax from Fulton and DeKalb counties.

MARTA is a very, very valuable asset to

The State of Georgia dictates how MARTA must spend its money.

An Observer

September 24th, 2012
9:59 pm

MARTA definitely needs to be privatized.

Meli

September 24th, 2012
10:07 pm

Unfortunately the City of Atlanta has seen the dark side of privatization with both its water contract and Park Atlanta, the belief being that a private company could come in and run things better than the incompetent directors on the City payroll could. Both times the City actually found private companies who made the City’s directors look like a group of Rhodes Scholars, and it cost the City of Atlanta more money to buy out the water company’s contract than they were projected to save. So any talk of privatizing MARTA should make everyone very nervous. On the other hand, we have to do SOMETHING, and short of the State of Georgia actually taking over MARTA, giving it 100% state funding, and throwing out all the crooks whose hands are in the cookie jar so deep I’m predicing that audit is going to find outright thievery and not just financial mismangement are behind MARTA’s financial problems, a private entity may be the only option we have short of shutting down the entire system.

On the Fulton/Forsyth line

September 24th, 2012
10:27 pm

Trains and buses are quite different. There really isn’t any reason to charge exactly the same and then complain trains cost more. Trains cost more, charge more. N. Fulton service gets cut because it costs more per ride than rides close to the fuel stations. Charge per mile. The grocery store runs should be cheaper than commuting to the ‘burbs. Trains to where people live are expensive, but perhaps the only permanent fix for congestion because you can always add more trains once you have the tracks.

On the Fulton/Forsyth line

September 25th, 2012
2:16 am

Traffic apartheid? Really. How much money and time is wasted on this imagery conflict. A successful metro area needs both high volume, high speed commuter transit and wide spread, but slower access. If we can’t fund both with the current system, we need to consider changing how its funded. But if MARTA loses as much money as it claims, why would any company want it?

wh17y

September 25th, 2012
3:25 am

I don’t care what y’all do with Marta, just don’t ask me to pay for it. Just because I live in the “Metro Atlanta” area, doesn’t mean Marta will EVER benefit me. I live in the very rural south eastern corner of Coweta County. I commute to LaGrange, leaving my house around 11pm and leaving LaGrange when my shift plus any overtime is done, usually 8am-10am. I already have to pay the emissions testing fee (tax) on my cars every year, I don’t want to be paying another 1% (or 0.0000001% for that matter) more in taxes to pay for a system I don’t ever use. Why can’t Marta find the magic number to charge their riders to cover their expenses? Is the state in the way, or are we afraid to charge fair prices to the always vocal “underprivileged”?

ByteMe

September 25th, 2012
7:51 am

The audit is out… and privatizing certain anciliary functions — like cleaning — is the primary money-saver. Basically, they can find some savings to balance the budgets based on current ridership.

But this still delays solving the main problem: is MARTA a regional transit backbone or just a Fulton/Dekalb system that isn’t part of any long-term regional plan? The state legislature wants their hands over it all, but don’t want to fund it or turn it loose to be a regional asset, and then they want to complain that it’s not meeting the region’s needs. The problem isn’t MARTA, it’s the state legislature that created this mess and refuses to fix it.

Dana Blankenhorn

September 25th, 2012
8:01 am

Privatization does not save money. All it does is give you another excuse to cut salaries and eliminate benefits form more people. It’s a race to the bottom.

Also, anyone reading this should know that the Cato Institute is funded by the Koch Brothers. Why a paper like the AJC eliminates that little detail is beyond me, but it is an important one. The Koch Brothers are oil people who like selling more oil, and have no use for anyone’s interest but their own. And that’s about the nicest thing that can be said about them on a family web site.

Today’s Headlines | Streetsblog Capitol Hill

September 25th, 2012
8:45 am

[...] Somebody Reasonable Debates Randal O’Toole on the Future of MARTA in Atlanta (AJC) [...]

I HATE MARTA

September 25th, 2012
9:35 am

MARTA stinks. Get rid of it. It’s useless, worthless, wasteful and administered by a corrupt, nepotic administration that only hires black people. Ever see a white MARTA employee? Ever see a white person working in the Atlanta airport?

yuzeyurbrane

September 25th, 2012
9:46 am

I remember Atlanta Transit. What a joke. O’Toole must either be too young to really have experienced it or has moved here since its demise.

JR

September 25th, 2012
9:50 am

Marta was a good thing for Atlanta when it was built. The problem was that only 2 counties supported it, Fulton and DeKalb. The State would not have anything to do with it due to jealousy and prejudice against Atlanta from all over the state.

Cobb and Gwinnett voted against it because of Racism. They didn’t want blacks coming to the suburbs and bringing crime to them.

Did you know that Cobb County was known as the Redneck Capital because of all the UNION folks that lived there. Likewise, Gwinnett County was the Stolen Car Capital. Cars were stolen in Atlanta and dumped in Gwinnett. There were Deputies tied to trees and killed by car thieves.

Atlanta is in a mess! Infrastructure is collapsing! New roads through Atlanta are virtually impossible due to the cost and damage that it would do. In my opinion it is too late for Atlanta, it is going to dry up on the vine. There was no foresight to the future when Marta was developed. It should have stretched out 50-75 miles in 6-8 different directions. If the State had gotten behind it that is what we would have.
Atlanta is stuck, it will never have the rail systems that other major cities have, it will remain the Black City that it is now known as, however, it will become known Bottle Neck of the South.

Europe is so far ahead of the US with its transit systems its unbelievable! I think we should have $6 a gallon gas. Use the taxes to develop transit systems across the US and DRIVE people to them by making it too expensive to drive. This would also cure the air pollution and environment issues.

Don

September 25th, 2012
11:11 am

Pretty standard Randal O’toole stuff. Cherry picks facts. Compares apples and oranges. Draws conclusions. You have to have to have your “critical reader” glasses on to see his hop, skips and jumps in logic.

Cherry picking: MARTA rail designed and build for middle class? This is bad? Uh, okay. Any ridership demographic stats, Randall? No. Of course not. Who were all suburban highway projects built for? The urban poor? How have those highways been performing? You could cherry pick some facts and show that as the number of suburban lane-miles has increased, so has the avg commute time in Atlanta.

Apples and oranges: Comparing transit in Atlanta then with now trying to show that the investment has achieved nothing. That’s an illogical comparison because “then” isn’t “now”. The logical comparison is “what would Atlanta look like today with and without MARTA”.

Without MARTA, Atlanta would be the Detroit of the South.

It’s stupid to revisit whether or not MARTA should have been built. We have it. That’s a fact. The question is how do we make perform the best it possibly can.

zeke

September 25th, 2012
11:17 am

A better solution is to sell marta to a private company or close it down! Either way it saves taxpayers more than $200 million per year!

Do not remember the year, sometime in the 90’s that an article was posted stating that marta had a $12 million surplus! But, then went on to say that taxpayers had funded more than $166 million to marta! Guess what? THAT MEANS MARTA HAD A $144 MILLION LOSS FOR THE YEAR!

Rider Inman

September 25th, 2012
11:21 am

Well said, Dana. Nobody should ever take Randal O’Toole serious when he writes about transit. Pro road, pro oil…definite conflict of interest. Every article of his is the same. Now, I agree that MARTA needs to improve in some areas. However, people suggesting to just “get rid of it” are completely lost. How would dumping transit riders onto already heavily congested roads help the transportation problem here in Metro Atlanta? All the people complaining about the inefficiencies of transit definitely don’t understand the true cost of building and maintaining roadways. The current transportation system in Metro Atlanta and the induced sprawl that it has helped create is not sustainable. Over the next ten years more people will start understanding this, but we’ll be in an even bigger hole than we are now. Transportation funding will continue to dwindle as costs continue to rise. Gas prices will never be what they once were when this transportation model was lovingly forced upon American cities, and they too will continue to rise. Remember when $3 gas made people go nuts…now it’s near $4 and it’s hardly news. The slow creep has made people numb to it, as long as it’s not an instant spike in price it pretty much goes unnoticed by the majority. The true financial/economic killer for the majority of US families is the personal automobile and for many that is the ONLY option. Talk about painting yourself into a corner…

Dumb and Dumber

September 25th, 2012
12:53 pm

Well, privatization worked great on City of Atlanta parking enforcement and KPMG is completely unbiased and untrustworthy, except for when they get caught lying and are forced to pay a small fine (just $80 million a couple of years ago); but what I like best about this debate is that the CATO folks and our GOP-run GRTA see no problem with GRTA running bus lines that directly compete with bus routes by Cobb, Gwinnett and MARTA.

Its interesting that no conservatives or libertarians seem to have a problem with taxpayer-funded transit agencies competing on the same routes for the same riders.

xxx

September 25th, 2012
1:02 pm

Why do all marta train stations look like homeless shelters? Any solution that has me riding a bus is automatically unacceptabe.

SAWB

September 25th, 2012
1:14 pm

I lot of folks keep using the example of Park Atlanta as a failure of outsourcing Government operations. Actually I think Park Atlanta is just the opposite an example of successful outsourcing. The City of Atlanta wanted to increase the revenue from the enforcement of parking laws, but City employees could not do the job. So, Park Atlanta is now doing the job and apparently doing it very well. If people don’t like the parking laws take that up with the City Council, but don’t blame the people enforcing the laws for actually doing their job.

tsabulis

September 25th, 2012
3:39 pm

Peachtree Center? Lindbergh? Decatur? They don’t look like homeless shelters to me.

Rob

September 25th, 2012
3:44 pm

“The real problem is that MARTA gets little more than a fifth of its funds from fares, so it focuses more on chasing tax dollars than on serving transit users.”

And how much do fares pay for our roads? Zilch except on the small percentage of highways with tolls. And those tolls don’t nearly cover the cost of the roads. So the overwhelming majority of roads are paid for with tax dollars.

Let’s get the bs out of the way, so we can have a real conversation about transportation.

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[...] I suggest a more aggressive agenda: complete privatization. Atlanta is one of the few cities that doesn’t outlaw private transit [...]

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