Moderated by Tom Sabulis
MARTA privatization is the focus of House Bill 264, currently in the General Assembly. State Rep. Mike Jacobs writes about cost savings the private sector could bring to the strapped transit agency. But the transit union argues the bill will mean lost wages and jobs.
Commenting is open below Curtis Howard’s column.
By Mike Jacobs
It’s no secret that MARTA, metro Atlanta’s flagship transit agency, is in dire financial shape. If necessary changes are not made, MARTA will continue to run an annual deficit of about $30 million, and costs are projected to outstrip revenues every year through at least 2021.
MARTA provides some services that are worthy and essential but carry an astronomical price tag. For example, MARTA’s paratransit bus service picks up and delivers the disabled and elderly. But at a cost of $50.43 per trip per rider — compared to the $4 fare actually charged each passenger — the price is unbearable. Estimates say the average new-car payment last year was $452. For frequent users of paratransit, it’s almost cheaper for MARTA to buy a new vehicle for each passenger and have someone drive them than to retain this service.
That is why the General Assembly is moving forward this session with House Bill 264, to require the MARTA board to competitively bid paratransit to the private sector so it can operate at lower cost. When private companies compete for contracts, costs drop for taxpayers, and the service usually is much better. Private companies may also retain current employees if they are doing a good job.
KPMG released an audit last fall that said MARTA could achieve as much as $15 million to $43 million in savings if a private company provided paratransit bus service. Both Cobb and Gwinnett counties utilize private companies to operate their entire bus systems.
HB 264 also follows the lead of the private sector in other ways. According to the KPMG audit, only 41.7 percent of private-sector companies had “defined benefit” or fixed pension plans. MARTA is spending $22 million more than the national average on retirement annually — even above other public-sector pension plans — and it should follow the trend and embrace the 401(k) “defined contribution” model
HB 264 would prohibit all new employees hired after Jan. 1 from joining the pension system. This would require MARTA to embrace a defined contribution system so new employees contributed to their own pension accounts.
The legislation also requires privatization of back-office functions within five years — accounting, human resources, recruiting, data collection, telephone operations, information technology, computer support, workers comp processing, customer care hotlines and bus and train cleaning.
All of these critical financial reforms have prompted MARTA’s employee union to lash out. Nevertheless, it is time to end the sweet deals that in part have caused the transit agency’s red ink and two fare hikes in three years.
What MARTA pays for in bonded debt is likewise startling. Debt repayment equals about 42 to 43 percent of MARTA’s prior-year sales tax collections. MARTA’s debt is anticipated to increase every year for the next 10 years. HB 264 requires MARTA to reduce its debt to 40 percent of sales tax collections within three years and 35 percent within six years.
Metro Atlanta deserves a flagship transit agency that is poised to grow and thrive. This cannot happen if MARTA’s business practices — many of which date to the 1970s — continue to hold the agency hostage to red ink.
Mike Jacobs, R-Brokkhaven, is chairman of the MARTA leigslative oversight committee.
By Curtis Howard
Pundits who say government is sluggish and complain about political gridlock missed a Guinness Book of World Records entry last week at the State House.
In what seemed like record time, a so-called MARTA privatization bill was passed out of the Transportation committee, first by allowing state Rep. Mike Jacobs, who chairs the MARTA legislative oversight committee MARTOC, to filibuster for nearly an hour, after which public comments were shut down.
The next day, citizens were prevented by full committee Chairman Jay Roberts from exercising their right to speak to their elected officials on a bill that could cost the city three-quarters of a billion dollars over 10 years by violating federal laws protecting workers.
Attendees had already listened to a disingenuous defense of his bill by Jacobs, which will turn over nearly a dozen job titles to private companies, one of which is the French company Veolia Transportation.
This bill should be forever known as “The Veolia Gravy Train.”
The business of Jacobs and other politicians across the country is to reduce the wages, benefits and pensions of American workers.
Profits made by outsourcing and service cuts will be taken out of our economy and shipped to France. Seven hundred MARTA workers — whose ancestors helped build Atlanta — may lose their jobs.
Jacobs said his bill will “bring MARTA into the 21st century.” Actually, it could return us to the early 20th century (and the mid-19th century on wages), when private transit companies bribed city officials for franchises. The companies were corrupt and the service so bad that municipalities had to take over the companies.
Recently, the MARTA workers’ union asked for public documents, including the actual detailed numbers from the KPMG report on how MARTA will save money by “outsourcing.” At first, MARTA CEO Keith Parker said we could have them, but later said the numbers will not be released because KPMG considers them “proprietary.” That’s an absurd claim; we all paid for the report.
Parker and Jacobs also made stunning admissions to us last week: They never saw the KPMG numbers, so they don’t really know if the bill will save or lose MARTA money.
Who makes public policy this way?
Before the bill was introduced, Veolia officials were on MARTA property inspecting operations. The company has a history of hiring political insiders to do its bidding. In Georgia, former state Sen. Chuck Clay is the lobbyist for Veolia. In Phoenix, it was a friend of the mayor. In New York, it was former U.S. Sen. Alphonse D’Amato.
Jacobs said outsourcing “works well” in Nassau County, N.Y., where Veolia is making money by slashing service by 60 percent and proposing fare hikes. In West Palm Beach, Fla., paratransit service was outsourced, and it has been such an abysmal failure that some lawmakers are clamoring for the government to take it back.
“Privatization” of MARTA is highway robbery and should be stopped in its tracks.
Curtis Howard is president of the MARTA chapter of the Amalgamated Transit Union.