Here we go again. MARTA is back to complaining about the state-imposed 50/50 restriction on its sales tax revenues, which holds that half the money can go to subsidize operations but half must be reserved for maintenance and capital projects. From an AJC report:
MARTA General Manager Beverly Scott warned Monday that the transit agency needed to start preparing for deep service cuts in part because the state legislature failed to lift regulations on how much it can spend on operations.
That failure coupled with projections that sales tax revenues — MARTA’s main funding source — will come up $130 million short in the next five years of what had been previously projected means the agency will have to make cuts to ensure it has the $40 million in operating reserves required by law.
“We will have to gut significant parts of the service,” Scott said.
I dealt with this issue a couple of years ago in the special series of columns I wrote about MARTA’s perennial financial woes. In short, while MARTA often laments this restriction, in practice it doesn’t mean a lot. When the three-year waiver of the restriction ends in June 2013, MARTA will have been subject to the 50/50 split just 18 months of the preceding 138 months, or 1.5 years out of 11.5 years.
Waiving the restriction gives the agency some flexibility, but only when revenues are flush anyway. Otherwise, routine maintenance costs prevent MARTA from making much use of that flexibility: In 2010, for instance, amid a gaping revenue shortfall, MARTA had to take $20 million out of its operating reserves to shore up its maintenance and capital spending.
What’s more, the agency has far more requirements for maintenance and capital improvements than it can fund even when it’s bound to spend half its sales-tax revenues on those needs. The T-SPLOST project list includes $540 million in renovations and critical repairs to MARTA’s system and stations — money that apparently wasn’t available otherwise. That covers 10 of the 12 projects on the T-SPLOST list for MARTA.
MARTA’s budgeting problems far exceed the 50/50 restriction. They owe to too little revenue or too much spending, depending on whether you’re a supporter or critic of the agency. Either way, MARTA’s means do not cover its ambitions. The 50/50 restriction is a nice talking point, but it has far more rhetorical than practical value.
– By Kyle Wingfield