Repeat after me: The 50/50 split is not MARTA’s real problem

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

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155 comments Add your comment

Finn McCool (Class Warfare = Stopping Rich People from TAKING MORE of OUR MONEY)

April 3rd, 2012
11:16 am

“Repeat after me” ??

Are you interviewing with Fox News, Kyle?

jewcowboy

April 3rd, 2012
11:20 am

“MARTA’s budgeting problems far exceed the 50/50 restriction. ” ~ So your answer is, if you can’t tackle every MARTA budgeting issue you shouldn’t address any?

ByteMe

April 3rd, 2012
11:25 am

They owe to too little revenue or too much spending, depending on whether you’re a supporter or critic of the agency.

Not the best of sentences… but it’s an even-handed conclusion, which is nice to see.

ragnar danneskjold

April 3rd, 2012
11:26 am

I assume the 50/50 split reflects distrust of the budget skills of MARTA management. The history of other similarly-situate public transportation systems is that the management spends without meaningful control on current operations, then when the bills come due for the necessary maintenance, the management goes to the political authorities for “unanticipated emergency” maintenance needs.

There is surely nothing sacrosanct about a 50/50 split. Before making any change to the current allocations, an independent audit of the maintenance/condition of equipment would seem appropriate. If it proves that condition is A-1, management will have earned liberalization.

Aquagirl

April 3rd, 2012
11:27 am

The State Legislature doesn’t appropriate any funds for MARTA. But Kyle thinks they should tell them how to spend their money.

This is what passes for conservatism in Georgia, folks.

Kyle Wingfield

April 3rd, 2012
11:27 am

jewcowboy: No, my point is that the 50/50 restriction means hardly anything in practice. You could give them that, and they’d still have an annual shortfall of roughly $50 million. Talking about 50/50 is a nice club to swing at the Legislature, but practically speaking it’s a distraction from that larger problem. So, to the degree it takes away attention from addressing that larger problem, it’s not really worthwhile.

@@

April 3rd, 2012
11:30 am

It’s always somebody else’s fault that MARTA’s dream hasn’t come true. Their past incompetence or malfeasance couldn’t possibly have anything to do with it.

Typical.

carlosgvv

April 3rd, 2012
11:32 am

MARTA has been having serious financial problems for many years. Are a large number of transit systems in other American cities having the same problems? If so, then MARTA’s problems are part of a larger national problem. If not, then something is fundamentally wrong with MARTA’S management system.

Cutty

April 3rd, 2012
11:33 am

If the state has no skin in the game in providing any fiscal support to MARTA, why should they tell them how to spend their money? Let them sink or swim on their own merits. Free enterprise at its finest. This just perceives that the state wants MARTA to fail, so they can say I told you so. Conservatives: For limited government for them, not for you.

Cutty

April 3rd, 2012
11:37 am

‘ 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.’

This just adds to the argument why the split should be eliminated. That and the fact that no other agency in the state gas such a restriction. Does GRTA have the same restriction?

The Hammer

April 3rd, 2012
11:37 am

MARTA’s real problems are labour costs and lack of ridership.

The labour costs is something no transit agency has been able to solve; they outpace inflation across all systems in all cities. Something must be done, and it will take more than MARTA to do it; it will take New York’s MTA to break the back of the union.

Lack of ridership can only be solved by better use of the land surrounding MARTA’s stations. This is going to have to wait, because there is a lack of commercial construction in the area. People don’t drive to subway stations to ride it to other subway stations surrounded by parking garages. People drive from parking garages to parking garages, that’s why they were built: to store automobiles.

jewcowboy

April 3rd, 2012
11:40 am

“So, to the degree it takes away attention from addressing that larger problem, it’s not really worthwhile.”

So if it is not worthwhile, why not remove the restriction?

And if one is going to swing a club at the legislature, a better one would be the fact while they continue to castigate MARTA finances, they refuse to let the agency serve as a contractor for rail outside of Atlanta. Nice work, criticize their funding sources, but don’t allow them to garner new ones.

But, of course, this should come as no surprise. After all, what was it that the one representative said a while back? Something on the order of, “I live closer to Disney World than Atlanta.”

Jefferson

April 3rd, 2012
11:41 am

At the end of the day, Atlantans should pay for and use MARTA. If the state won’t help, they should move the capital to Cleto.

jewcowboy

April 3rd, 2012
11:43 am

Cutty: “That and the fact that no other agency in the state gas such a restriction. Does GRTA have the same restriction?”

No other transit system on the scale of MARTA in the entire US has this restriction.

ND

April 3rd, 2012
11:44 am

If the 50/50 split is so irrelevant, then let’s impose it on every other government agency. After all, if that’s not the problem for MARTA, it shouldn’t be the problem for GRTA, Gwinnett County Transit, the DOT or anything else either.

Aquagirl

April 3rd, 2012
11:48 am

Are a large number of transit systems in other American cities having the same problems?

MARTA is the largest public transit agency that doesn’t get funding from the state. It’s not a management system problem, it’s a big fat leech problem. Only two of the five core Metro Counties pay, and none of the exurbs.

Kyle will dazzle you with BS and various weighty opinions while ignoring that big GOP Elephant in the room. That fat pachyderm loves representation without taxation.

Kyle Wingfield

April 3rd, 2012
11:56 am

Aquagirl @ 11:48: False.

Per the National Transit Database, in 2009 (the most recent year for which complete data are available), MARTA was the 17th-largest transit operator by budget.

Dallas, which was No. 9, got no state funding. Denver, which was No. 14, also got zero. Both are cited as aspirational examples for Atlanta when it comes to transit.

Also, Los Angeles, which was No. 6, got just 1.8 percent of its budget from state funds. And San Francisco’s BART, which was No. 12, got 0.2 percent.

Just smaller than MARTA are Miami (No. 18, got 3.8 percent of its funding from the state) and Seattle (No. 20, got 0.4 percent).

Now, I’ll wait for you to tell me how these numbers are just “BS.”

Tim

April 3rd, 2012
11:57 am

The State of GA sure managed to come up with alot of funding for that area of gross suburban sprawl feeding 75 and 575 but when it comes to funding transport infrastructure, not a dime. Those 75 and 575 projects are sure going to be interesting when gas eventually goes above 5 bucks a gallon. The burbs are going to continue looking less and less appealing. I’ve realized that the state govt can continue its backward ways, but educated populace and affulence that continues to move into the core of the city will eventually cause a shift in priorities no matter how much the old cronies fight it.

Patrick

April 3rd, 2012
11:58 am

100% Correct, Aquagirl!

Thank you for summing up the problem so well.

Kyle Wingfield

April 3rd, 2012
12:02 pm

By vehicle revenue miles traveled, Houston’s system was bigger than MARTA and also got $0 from the state.

Logical Dude

April 3rd, 2012
12:02 pm

“The 50/50 split is not MARTA’s real problem”

Yes, lack of State funding is MARTA’s real problem.

Who is imposing the 50/50 split? The STATE? Why impose a restriction if they aren’t even funding MARTA??

That is what I don’t get. If there are restrictions coming from an entity that exerts control, why should it have any control if there is no funding from the entity?

Carole

April 3rd, 2012
12:04 pm

Kyle,

Whether this is a major problem for MARTA or not, the reality, as others have pointed out is the State gives nothing to MARTA, but has control over how it spends it’s money. Why?

clyde

April 3rd, 2012
12:07 pm

It appears to this uninformed one that the users are not paying enough for the service.

Kyle Wingfield

April 3rd, 2012
12:08 pm

The other thing that people miss on this issue is that, for better or worse, a local sales tax such as the one for MARTA first requires approval from the Legislature. So, the Legislature allowed for MARTA’s sales tax and in doing so placed a restriction on its use. That’s why it’s a state issue.

jewcowboy

April 3rd, 2012
12:09 pm

I seem to remember an article in the AJC a while back about legislators using GA Highway Patrols as their personal taxi service to the Gold Dome while in session.

If this is still happening, perhaps we should issue each legislator a monthly unlimited MARTA pass ($95 value) and rescind any HP taxi privileges. Even if it is no longer happening, perhaps rescinding any parking privileges and giving them a MARTA pass would still be in order. I know of at least one bus line that would have sterling service every 5 minutes.

Cutty

April 3rd, 2012
12:10 pm

Kyle- The transit agencies you listed that receive no state funding, do those states impose restrictions on how the agencies spend their money?

Logical Dude

April 3rd, 2012
12:11 pm

Kyle says: the Legislature allowed for MARTA’s sales tax and in doing so placed a restriction on its use

Huh, why would they place restrictions? The 50/50 split is just one of many control issues the state places on MARTA.

Do you feel it’s fair for the State to dictate so many terms on an entity it doesn’t fund?

jewcowboy

April 3rd, 2012
12:14 pm

“MARTA was the 17th-largest transit operator by budget.”

How about by daily boardings?

Kyle Wingfield

April 3rd, 2012
12:15 pm

Cutty @ 12:10: I’m not aware of any.

Rafe Hollister

April 3rd, 2012
12:19 pm

I say put a 7% tax on solar panels and windmills and designate all that revenue to Marta. That could be the state’s contribution to the system.

I thought we needed Marta, because gas prices would eventually force people out of their cars and into mass transit. Well, we have the rising gas prices………guess those pump prices are not as awful as we are led to believe.

DannyX

April 3rd, 2012
12:32 pm

The state wants to spend hundreds of millions of tax dollar money for a new football stadium that is not needed but won’t help MARTA. We sure have our priorities straight.

When the state gets serious about transportation we should consider another 1% sales tax, until then vote NO.

Aquagirl

April 3rd, 2012
12:39 pm

Now, I’ll wait for you to tell me how these numbers are just “BS.”

They’re BS, Kyle.

I love how you choose rankings based on BUDGET, not how many people they move. That’s a wonderful basis for arguing MARTA should get less funding. Nice try, that might distract screaming cons or unfortunate souls subjected to NCLB.

Dallas is an inspirational transit system? They move less than half the people using more money than the 17th ranked system, MARTA. They’ve recently cut plans for rail extension to the Dallas/Ft. Worth airport. Matter of fact, they’re suffering the exact problems as MARTA—shrinking sales tax revenue plus leeches who want to use the system without paying those taxes. TAX THE DAMN FREELOADERS.

http://www.wfaa.com/news/local/DART-considers-charging-suburban-commuters-for-parking-96943464.html

If you’d like me to shred those other systems you cited, let me know. Do you really want your readers to know you’re pimping BART when it taxes people who don’t have service in their city? They’ll lynch you on the spot. You’d be wise to cut your losses and move on.

So yes, Kyle, your numbers are BS. I am not ZOMG impressed by numbers thrown out randomly with no (or worse misleading) intent.

Now, I’d LOVE to hear why you think State Representative Cowtipper from Backwash, GA should have any say on MARTA funding when the legislature contributes 0.0% of the funding.

DannyX

April 3rd, 2012
1:00 pm

Georgia businesses have been getting huge tax breaks, how do they expect people to get to work?

Metro-Atlanta gas taxes subsidizes the rest of the state, a big chunk of our tax revenue gets siphoned off. How about we cut off the “closer to Disney World” Georgians from their entitlement so metro-Atlanta can fix its transportation problems?

We are creating new cities in Fulton and DeKalb because tax dollars are being diverted. Why is that same system just fine when it comes to metro-Atlanta tax dollars being diverted to other parts of the state? Probably much more money than the local diversions.

Is Dallas losing a huge chunk of their gas tax too?

Kyle Wingfield

April 3rd, 2012
1:05 pm

Aquagirl:

1. I never said “MARTA should get less funding.” (Speaking of “BS” and efforts to “distract”…)

2. You’re ignoring my 12:02 about Houston and vehicle revenue miles. Also, the Chicago commuter rail (NE Illinois Regional Commuter Railroad) is larger by passenger miles traveled and got just 0.5 percent of its budget from the state in 2009. That’s the equivalent of $3.1 million of MARTA’s budget. I’m guessing you wouldn’t deem that enough state funding for MARTA.

3. In any case, since we are talking about *funding* it seems to me that looking at agencies based on their budgets is appropriate. It’s not as if you were specific in your “largest” claim. (If we took “largest” to mean physically the largest, i.e. the systems with the most route miles, MARTA fares no better than in my initial example.)

4. Yes, Dallas gets mentioned by transit advocates here as an aspiration because they’re building light rail there.

5. I didn’t think I was “pimping” BART because I mentioned it as a counter-example to your claim.

DRKVC

April 3rd, 2012
1:06 pm

MARTA can be extremely profitable, but it will take a huge influx of money, and a fast-track on land acquisition to create a comprehensive rail plan to reach a critical mass of riders. Once that is achieved, MARTA profits would soar. Problem is we have neanderthals like Wingfield and others who cannot see past the end of their noses. It requires visionary leadership, a substantial short-term investment and an intelligent populace that would bring about the necessary changes that would lead to incredible economic success for the region. I’m not holding my breath.

jms

April 3rd, 2012
1:07 pm

“MARTA is the largest public transit agency that doesn’t get funding from the state. It’s not a management system problem, it’s a big fat leech problem. Only two of the five core Metro Counties pay, and none of the exurbs.”

So your solution is for those horrible exurban hicks to pay for your precious MARTA? Most in the exurbs don’t ride MARTA. How about if MARTA is important and you use it, then you pay for it and stop trying to shift the burden to those who don’t use it.

The Hammer

April 3rd, 2012
1:10 pm

To try and be a voice of reason:

Every person who uses MARTA pays their “fair share” via the $2.50 fare. That is all anyone is ever expected to pay for MARTA, as per MARTA itself.

However, people *do* freeload by having less automobiles on the roads, thus making their travel times shorter. These shorter travel times then increase the value of land, benefiting everyone. The most equitable way of funding MARTA would be to determine how much value it added to the price of land and then tax that amount of the land price.

For example, if your land value increased by $2,000 because of MARTA service, then you would be taxed $2,000 over, say, a 40 year period. This tax would be applied statewide, with, of course, land value increases approaching $0 as you reach Valdosta, Albany, etc. and increasing the largest amounts around Five Points Station. This money would then be administered by the MARTA Board, which, of course, is also determined by the State Legislature.

DannyX

April 3rd, 2012
1:12 pm

“So your solution is for those horrible exurban hicks to pay for your precious MARTA?”

You want to fund your exurban area with your own tax dollars too? What if every single tax dollar generated from the gas tax stays in Fulton and DeKalb?

Kyle Wingfield

April 3rd, 2012
1:12 pm

Btw, Aquagirl: The representatives from “Backwash, GA” know that you and many other Atlantans think they’re a bunch of “Cowtippers,” and that doesn’t help your cause when you argue that the state should help pick up the tab for MARTA.

JohnnyReb

April 3rd, 2012
1:18 pm

You guys are dancing around the real reason the State mandates to MARTA – the state does not trust MARTA to use the funds properly.

This goes hand in hand with Fulton being a county a lot of people can’t wait to get severed from. And, Dekalb, what a jewel, they are letting county employees purchase home appliances by payroll deduct.

The only way MARTA will ever be successful is that the State take complete control and bust the union. The union has posted on ther website the state is racist. That pretty much sums up the relationship. That won’t be solved by letting go of the purse strings.

Vote NO on T-SPLOST

Cowtipper

April 3rd, 2012
1:20 pm

Ya’ll run the MARTA down to Sonny’s fish pond and we’ll talk about some funds.

The Hammer

April 3rd, 2012
1:23 pm

<>

The State already controls the MARTA Board, but they definitely would have to bust up the union.

Good luck.

As a matter of fact, one of the main reasons MARTA exists today is because, after a failing referendum the first time (’68), the State allowed for collective bargaining, and the union(s) put their money and influence behind the second referendum. The second one (’71) passed due to this extra money, as well as agreeing to build the East-West heavy rail line (initially it was designed to be Bus Rapid Transit, which would have made Atlanta one of the first cities in the world to build such a system).

jms

April 3rd, 2012
1:24 pm

“You want to fund your exurban area with your own tax dollars too? What if every single tax dollar generated from the gas tax stays in Fulton and DeKalb?”

I don’t live in the exurbs but if what you’re asking is do I think that the people who benefit should pay the cost, then yes, that is correct.

DannyX

April 3rd, 2012
1:25 pm

“The only way MARTA will ever be successful is that the State take complete control and bust the union.”

Yes, because we all know how well run the state of Georgia DOT is. NOT!

JohnnyReb

April 3rd, 2012
1:27 pm

The State DOT may be lacking, but compared to Fulton County they are a diamond of excellence!

BW

April 3rd, 2012
1:30 pm

Since this is a conservative blog, I’m guessing the issue is more spending than too little revenue. I guess the basic question here is how deep they should cut. Do you agree that the spending reductions laid out by Dr Scott are actually long overdue? Do you think MARTA is being grossly mismanaged? If so, will allow the state to appoint the board actually do anything to remedy that given the hostility to MARTA from non-Atlantans?

DannyX

April 3rd, 2012
1:32 pm

“The State DOT may be lacking, but compared to Fulton County they are a diamond of excellence!”

Dream on. MARTA is ranked as one of the best run systems in the nation in terms of efficiency. The Georgia DOT is a disaster.

JohnnyReb

April 3rd, 2012
1:39 pm

Here’s the silver bullet for MARTA, the City of Atlanta, Fulton, Dekalb, and now Clayton counties.

Vote Republican.

Or, you can stay with the Democrats, enjoy more misery, and continue to have two Georgia’s where everyone else in the state basically wants you to go away. You are more trouble than worth.

Samantha

April 3rd, 2012
1:43 pm

So if I follow the “argument” clearly… the progressives don’t really care about whether the 50/50 split has any practical effect on Marta they are just mad and think that attacking legislators who live somewhere else is a good way to shore up the politics of victimhood in Atlanta. They are especially angry that their cherished talking point of MARTA being the “only” transit agency that does not get state funds is a crock.
As usual the progressives are not short of emotion but more than a little fact challenged.
The real goal of transit is occaisionally revealed: reengineer the way that people in Metro Atlanta live to forcd more and more people into high density, city center living whether they want to or not.

independent thinker

April 3rd, 2012
1:46 pm

Kyle- does some real investigation and reporting- one of the major costs MARTA has is ADA mandated limousine buses for anyone who has an ADA card. This cost is astronomical and these shiny little buses pick up people anywhere in the city for minimal cost. Most ride around empty and you see them all over. The reason is some president passed an unfunded mandate as a benevolent conservative requiring local governments to comply with every ADA participants needs whatever they are and wherever they are. MARTA got sued for not providing enough service to ADA participants. Kneeling buses were not enough.
Do some research – find out how much is spent. I cannot find it in their online budget. I know this might expose the cost of unfunded mandates by Republican presidents. So i guess you would not dare go there.