Why take MARTA private?

Moderated by Tom Sabulis

The MARTA privatization debate continues today. The president of the local union criticizes management and says that going private means sending public dollars overseas and contributing to sweatshop conditions. But a think-tank executive believes that competition will add jobs, fix absenteeism, cut losses and, ultimately, save metro Atlanta’s transit agency.

Commenting is open below Benita Dodd’s column.

By Curtis Howard

Some lucky billionaire is about to get an early Christmas present if the board of directors of MARTA follows through on proposed plans to privatize a public transit system that belongs to the taxpayers.

The billionaire might be from the French-based Veolia Transportation or the Scotland-based First Transit, so we know one thing for sure: The fares we pay will not be returned to help the economy of Atlanta. They will be shipped overseas while transit users get less service — especially night and weekend service — and see corners cut on safety.

Welcome to the mismanaged policies of the MARTA board: When all else fails because of mismanagement of the system, blame it on the workers who have already given $90 million in concessions.

Throw around canards like abuse of overtime and absenteeism (caused by the intransigence of management), then dismantle our system, the jewel of the South, so foreign companies can bleed it for every last dime in the fare box, then walk away.

According to Page 33 of the KPMG audit, MARTA’s labor costs, wages and paid time off as a percentage of total personnel costs are 3.5 percent lower than transit peers around the country.

Also, in 2011, MARTA contributed $18.8 million to its managers’ pensions.

Here are some other reasons to oppose privatization:

Service cuts are always part of the agenda. Need a weekend or a late-night bus? Call a friend or taxi.

Privatization means sweatshops on wheels — lower wages, slashed health benefits, replacing full-timers with part-timers, and erratic service.

Political cronyism. Contracts go to firms that make hefty political contributions. In Phoenix, Veolia hired the mayor’s girlfriend.

The inevitable transit layoffs will hurt the economy and adversely affect you as a user of the system as well as your neighbor. The laid-off MARTA employee is your pastor, the coach of your daughter’s soccer team, the person who reads to the sick and the elderly, and all our members who are an integral part of our vast transit-union volunteer community.

Private companies have no roots; like transit vagabonds, if their profits aren’t high enough, they move to the next city.

Privatization is a misuse of public property.

Privatization already has been tried with MARTA and failed.

Any questions?

The idea that public transit, which is the lifeblood of our economy, should be turned over to a profit-making company is ludicrous.

How much of a “profit” do our schools make? Or our police and fire departments? Our sanitation department?

The only reason a foreign company would be interested in the “well-being” of Atlanta residents is to skim profits.

Reliable mass transit and well-paying jobs are basic civil rights and should not be given away to foreign companies.

Curtis Howard is president of Amalgamated Transit Union Local 732.

Add jobs, cut losses

By Benita Dodd

The failure of MARTA, the backbone of Atlanta’s public transportation, will devastate the region’s workers and mobility. KPMG’s recent audit warns that on its current course, the transit authority is unsustainable: MARTA must cut $25 million a year. Managed competition, including privatization and outsourcing, is critical.

There are two reasons to embrace this approach. First, Harvard professor Stephen Goldsmith, as mayor of Indianapolis, identified government’s role in his “Yellow Pages” test: “If the phone book lists three companies that provide a certain service, the city probably should not be in that business.” The same should apply to MARTA: Examine whether services can be provided more efficiently by private companies.

Second, managed competition allows an agency’s existing department to place its bid for a contract — say, MARTA’s janitorial contract — alongside private vendors’ bids. The department must demonstrate that it could do the job as well as or better than a private company. Clearly, there is a need to incentivize MARTA’s workers and departments to greater efficiency. Consider that much of MARTA’s problem is union-related:

Salaries and benefits for its 4,500 employees comprise 77 percent of MARTA’s operating budget; 64 percent of employees are unionized. Five years into a pay freeze, janitorial workers (unionized) earn 46 percent more than the national private average.

Apparently the higher pay is just sickening: Annually, the high absenteeism rate forces MARTA to devote $11 million to backup staff. Workers’ comp claims are $5.5 million higher than the national public- and private-sector average, and health-care claim costs are $8.9 million higher than the national average.

Pension costs are $22 million higher.

All this in a shop where union workers pay “significantly less for medical coverage and pension costs than the national average including both public and private sectors,” KPMG notes.

KPMG also proposes privatizing payroll and human resources. Surely there’s more. Privatizing new capacity and routes is an easy option. Paratransit service is a great chance to create private-sector jobs and reduce MARTA’s costs.

Why the private sector? Private companies and vendors operate in an environment where prices, profits and losses, and customers matter. They understand success involves more than just a captive audience; they must provide a service that invites repeat business and value for money.

Naysayers will cite failures of Atlanta’s water system privatization and MARTA’s previous attempt to privatize paratransit. Both disasters are a strong reminder that government should ensure that a contract defines the expectations of each party. Agency oversight, not agency micromanagement, is required.

Managed competition will turn MARTA’s focus to providing transportation instead of preserving union jobs. The livelihoods of thousands of low-income commuters — and Atlanta’s transportation future — depend on it.

Benita Dodd is Vice President of the Georgia Public Policy Foundation.

18 comments Add your comment

marko

October 31st, 2012
9:23 am

I drive by one of the MARTA service facilities in the early morning as drivers arrive for work and buses leave the facility. Two immediate issues that should be addressed are:
1) Why are buses sent out with burned out headlights? If even these simple issues aren’t addressed before the buses go out, makes you wonder how well the fleet is checked before going out for service.
2) Standards need to be higher for drivers. I see drivers in their own cars on the way to work that can’t keep their car on their side of the road. And Marta puts people who can’t drive their own car behind the wheel of a bus?

Small issues, but certain indications that the whole organization from top (especially the top) to the bottom needs a fresh look.

Rider Inman

October 30th, 2012
11:25 am

Mangler is dead on, but I doubt the majority living OTP using those roads and highways will see it that way. The current road building that induces nothing but sprawl is an unsustainable ponzi scheme. Unfortunately, the majority of metro Atlanta (and the majority of other big cities) have bought in to it blindly.

MANGLER

October 30th, 2012
10:37 am

When the idea of privatizing roads and highways is mentioned, you all choke vehemently on the idea that something your tax dollars paid for is going to be run for a profit by some company somewhere and you’ll have to pay a toll for the privilege to use that thing you already paid for. Well isn’t this the same thing? A public service created with public dollars and you seem to be OK with just letting some company somewhere come in and run it?(likely because you never actually use it) How about all highways, 75, 85, 285, 400, et al have toll booths pop up and managed for profit. Bet MARTA ridership will suddenly spike.
Infrastructure does not make money, it creates money by allowing people, goods, and services to move about on it and in that way, the freedom of movement, it benefits society.
If highways and mass transit systems MADE PROFIT, then no city or government anywhere would ever have had to build one, because companies would be jumping all over the chance to do it themselves. But they aren’t, are they? But they’ll sure as hell line up to run the system once the public has paid to build it. Ever wonder why that is?
Similar to the charter schools – no company will build one on their own, but will line up when tax dollars are used to build and operate them.

Tancred

October 30th, 2012
10:16 am

Here is a radical thought — look at some successful systems and model MARTA after those . . .

Well, scootdog, that would have MARTA “officials” taking junkets to London and Amsterdam and Lisbon to return with…What? If anything should be privatized, it should be the planning and R&D, and both should take place on a regional level. That seems unlikely considering the entrenched interests involved.

scootdog

October 30th, 2012
10:01 am

Here is a radical thought — look at some successful systems and model MARTA after those . . .

Tancred

October 30th, 2012
10:01 am

One should consider that MARTA was created in a landscape long shaped by the automobile and the road building industries (including GDOT). That’s why so many people say “it doesn’t go anywhere.” One shouldn’t ignore the history of white flight and black governance that has also shaped MARTA, as well as all governance in Atlanta, Dekalb, and Fulton. Let’s face it, MARTA was/is a transportation system AND a make-work project for a lot of people traditionally undeserved in terms of job opportunities. Atlanta, Dekalb, Fulton, all are run by and for (mostly) black people. This makes sense when you consider who “ran” things before the Civil Rights Act had enough time to allow black majorities to control elections. That said, such race-based governance leads to a sense of entitlement, especially among the managers in the upper levels. That’s why Georgia is black-run in the Atlanta MSA and Bubba-run in other parts of the state. It’s the legacy of slavery and white Southern “tradition.”

Joshua Pressley

October 30th, 2012
8:42 am

The issue with MARTA as a transit system is not a issue of use as much as it is a issue of governance. The Board has not done a good job of promoting the use of the system and instead is more inclined to complain about the capital that its not receiving as to touting the reasons why it should be used.

Privatization is not the answer though. The people that will own the system, are not familiar with how this system operates and the environmental factors that work for the region and against the system. However, I do believe that an overhaul of management and a new vision from different directors and upper management would change the way that the system is viewed and the way that MARTA views its future.

Huh?

October 30th, 2012
8:08 am

I still do not understand why buses are included in “rapid transit” system. If we adopted the DC model and charged for distance traveled vs. flat rate, i believe revenues would rise. North springs to the Airport for $2.75 is a bargain.