Finances
For a decade well before the current severe international economic downturn -- MARTA was steadily depleting reserves to pay for the mounting costs of our aging transit system. Today, our collective failure to increase dedicated transportation/transit funding has finally caught up with us. Just two short years ago, we expected to receive $403 million in sales tax revenue from DeKalb, Fulton Counties and the City of Atlanta. Today, those FY 2011 projections are down to $286 million.
For FY 2010, MARTA balanced its $399 million net operating budget by significantly reducing costs. That included the elimination of annual merit increases, significantly higher employee health care contributions, a 10-day mandated furlough for all non-represented employees, a 15-month deferral of collective bargaining, increased fares and parking fees for the first time since 2001 and cutting some bus and rail service (resulting in a savings of over $27 million). MARTA also used $45 million in one time federal economic stimulus funds and again tapped our reserves (another $37 million). The following chart illustrates these initiatives.
| Original FY10 Deficit Forecast |
in millions |
(109.6) |
| Revenue Enhancement Initiatives |
|
49.8 |
| AARA (Stimulus PM Revenue) |
20.0 |
|
| ARRA-ARC Stimulus Flex |
25.0 |
|
| Fare Increase |
4.8 |
|
| Cost Containment Initiatives |
|
27.7 |
| Core Service Adjustments |
6.4 |
|
| OPEB Adjustment |
2.0 |
|
| Non Rep Merit Elimination |
3.3 |
|
| Non Rep Furlough (10 days) |
2.0 |
|
| Non Rep Healthcare Contributions |
2.0 |
|
| Non Rep Position Reduction (Vacancies) |
3.5 |
|
| Rep Employee Availability Improvement |
1.0 |
|
| Travel Expense Reductions |
0.3 |
|
| Miscellaneous/OTPS Expense Reductions |
7.2 |
|
Adopted FY10 Deficit Forecast
(after initiatives) |
|
(32.1)* |
Due to the continued sharp downturn in local sales tax receipts which has not abated, we were also forced to reduce our annual capital program in FY 2010 from the average $325 million to $254 million, and are projecting a further reduction to $187 million.
Georgia State University's Economic Forecasting Center (GSUEFC), which performs MARTA's sales tax revenue projections, is not predicting an economic uptick until 2013.
In total reserves, we have $39 million that is legally restricted for capital purposes, and $114 million in other remaining reserves which includes the 10% MARTA Act operating reserve requirement in the amount of $33 million. Even if we used all of these remaining reserves in FY 2011-2012, we would not have sufficient funds to maintain current transit service levels and make essential capital investments.
Fully addressing the scale and scope of the State's 20-year legacy of under-investment on a sustainable basis will require a strategic plan (already completed as part of the SB 200 statewide transportation reform), as well as new, flexible revenue sources that can be invested in multi-modal approaches. Solutions should include demand management and other policies that support the investments and project-delivery models that use public-private partnerships to control costs and share risk. Georgia now has the opportunity to put all of those elements in place. Seizing this opportunity is critical to ensuring that Georgia does not cede any more competitive ground to peer states like Texas, North Carolina, Virginia, and Florida.
Which Way Are We Headed?
State and regional decision-makers will have to ask critical questions about how transportation funds should be spent to address Georgia's transportation priorities.
Two clear paths emerge:
- Business As Usual: Continued under-investment in transportation infrastructure, exacerbated by the failure to enact a transportation funding solution for three years running.
- The Smarter Way: By wisely investing in transportation improvements, Georgia has an opportunity to create up to 425,000 jobs over the next 20 years and $480 billion in GDP growth over the next 30 years, focusing on sustainable transportation options by improving our existing roads while investing in transit that provides more affordable commutes, reduces pollution and generates increased economic development.
|