By David Pendered
A new report commissioned by a national transit union cites what it contends are deep flaws in MARTA’s own management study, which is fueling the General Assembly’s effort to reorganize MARTA and promote the privatization of some jobs.
The new report is part of the groundswell of opposition the national union and its advocates are attempting to mount against looming changes in the management and oversight of metro Atlanta’s largest transit system.
In the past, the presence of the national union appeared to be barely evident in MARTA’s affairs. This moment is different, as evidenced by strong language in the report by a professor at Columbia University who specializes in privatization:
“The report’s omissions are glaring [and] it would be highly irresponsible for any public policy to be crafted based on this slanted, incomplete and predetermined report,” concludes the executive summary of the report written by Elliott Sclar.
Sclar directs the Center for Sustainable Urban Development at Columbia’s Earth Institute. Sclar has written extensively on privatization, including an award-winning book: “You Don’t Always Get What You Pay For: The Economics of Privatization,” (Cornell 2000.)
Sclar’s opinion of MARTA’s management study is clear in the title of his 10-page treatise: “KPMG’s Report on MARTA: Faulty Data, Wrong Conclusions.” His previous works have focused on privatization of Amtrak, air traffic control, and an array of transit topics.
Sclar’s report contends that the KPMG audit reaches a predetermined conclusion.
“By presenting comparisons from the private and public sector instead of other transit agencies, KPMG was able to unfairly manufacture numbers that are not only unfavorable to MARTA, but would also be unflattering to the overwhelming number of transit systems nationwide.”
Sclar writes of the KPMG study: “The analysis provided by the authors does not allow us to draw any substantial conclusions because it compares apples and oranges.”
Elsewhere Sclar writes: “The report fails to specify the scope and details of market data or captive data used as the basis for analysis, preventing the reader from assessing the quality of the work or the validity of the conclusions drawn.”
The management study that draws such strong rebuttal was conducted by KPMG. MARTA hired the consulting company and in October released results of KPMG’s overarching review of the transit system’s operations.
The KPMG report stated at its beginning that its intention was to recommend transformative change:
“MARTA engaged KPMG to provide a combination of operational audits and strategic advisory services to assess and improve MARTA’s overall operational and financial effectiveness. This report focuses on strategic transformation. Key project objectives include: Analyzing current business processes and identifying specific near-term opportunities, identifying longer-term opportunities to improve overall effectiveness and efficiency, identifying new and enhanced methods of revenue generation, and driving sustainable, continuous improvement within MARTA.”
The KMPG report is a factor in the legislation to remake MARTA. House Bill 264 has been approved by the House and now is pending in the Senate.
Tension over the proposal flared Wednesday at the Capitol, during a meeting of the MARTA Oversight Committee, between Rep. Mike Jacobs (R-Brookhaven), who chairs MARTOC, and Curtis Howard, president of Amalgamated Transit Union No. 732.
KPMG focused on labor costs, saying they represent about 77 percent of MARTA’s operating budget. KPMG determined a program of privatization and benefits reduction could provide significant annual savings:
- Up to $50 million a year in legacy pension plans, healthcare, retirement, absentee and workers compensation;
- From $60 million to $142 million over five years by outsourcing jobs that are deemed non-core to MARTA’s mission.
Privatizing MARTA will end up costing the citizens of Atlanta dearly. Let’s see this plan for what it is: a racist, classist ploy to deepen the pockets of private contractors at the expense of working-class Atlantans. Privatization of transit systems leads to reduced fares and service cuts. We need to tell our legislators that we won’t stand for this!
Concerned MARTA Rider,
It is the repeated and frequent deep cuts to service within the past decade that is being used as justification to privatize MARTA’s operations.
And you can (and should) tell your legislators that you want stand for MARTA being privatized as communicating with your representatives in government is very important and beneficial to the well-being of a representative democracy.
But with continued population and political shifts within Fulton County making conservative-leaning North Fulton legislators some of the most-powerful legislators in a state legislature completely dominated by smaller government-minded conservatives and with those affluent conservative areas of North Fulton wanting more control of Fulton County governance, including MARTA, expect privatization of MARTA and mass transit in general to be an increasing priority in the future in the legislature.
This play for privatizing MARTA at the state level is much more of a play for congestion-weary and transit-starved suburbanites to gain control of the agency’s operations and get more transit service in North Fulton County than it is “a racist, classist ploy to deepen the pockets of private contractors at the expense of working-class Atlantans”.
As roads like Georgia Highways 400 and 141 have continued to fill up with more traffic through and from the fast-growing suburban areas of North Fulton (with no increase to the capacity of those roads), many more questions have been asked of state legislators as to why isn’t there more transit (bus and rail) service to such a fast-growing area, even amongst the boisteriously loud (but relatively few) objections from the hardcore OTP suburban anti-transit crowd.
Concerned MARTA Rider,
It is the repeated and frequent deep cuts to service within the past decade that is being used as justification to privatize MARTA’s operations.
And you can (and should) tell your legislators that you will not stand for MARTA being privatized as communicating with your representatives in government is very important and beneficial to the well-being of a representative democracy.
But with continued population and political shifts within Fulton County making conservative-leaning North Fulton legislators some of the most-powerful legislators in a state legislature completely dominated by smaller government-minded conservatives and with those affluent conservative areas of North Fulton wanting more control of Fulton County governance, including MARTA, expect privatization of MARTA and mass transit in general to be an increasing priority in the future in the legislature.
This play for privatizing MARTA at the state level is much more of a play for congestion-weary and transit-starved suburbanites to gain control of the agency’s operations and get more transit service in North Fulton County than it is “a racist, classist ploy to deepen the pockets of private contractors at the expense of working-class Atlantans”.
As roads like Georgia Highways 400 and 141 have continued to fill up with more traffic through and from the fast-growing suburban areas of North Fulton (with relatively little increase to the capacity of those roads), many more questions have been asked of state legislators as to why isn’t there more transit (bus and rail) service to such a fast-growing area, even amongst the boisteriously loud (but relatively few) objections from the hardcore OTP suburban anti-transit crowd.
I’ve said it before…let MARTA shut down for a couple of days. Then people will realize whats at stake. Rep Jacobs would be whistling a different tune if that happened
@ScottNAtlanta
{{“I’ve said it before…let MARTA shut down for a couple of days.”}}
As they say “Be careful what you wish for…”, especially with MARTA in its current financial death spiral.
Don’t be so sure that Rep. Jacobs would be whistling a different tune if MARTA shut down for a couple of days or so.
A MARTA shutdown would very-much likely play right into the hands of the conservatives in the State Legislature and in North Fulton and North DeKalb counties that want to privatize MARTA because a MARTA shutdown (most likely, unfortunately due to a severe lack-of-funds) would provide the state with the political impetus and political justification to takeover the agency and privatize even more of the agency’s operations than is currently proposed.
A MARTA shutdown would also provide a heckuva lot of rhetorical fuel to the hardcore fervently anti-transit factions around the metro area and at the state level of government.
Those hardcore anti-transit factions in the outer-suburbs OTP could then point to MARTA’s financial failure and say “See, we told you that transit is not financially viable” and use the shutdown as justification for the state to spend even LESS money on transit than it currently spends.
A MARTA shutdown would provide the enemies of the agency and of transit in general with the political ammunition to push the state towards a transportation strategy of investing solely in roadbuilding with NO investment in transit as they would be able to point to the shutdown and say that not enough people want to ride transit therefore it is not even worth the consideration of further investment by the state.
Hindsight is 20-20, but if MARTA did not want to be in this current situation of having privatization forced upon it by external factions at the Statehouse (or of having to make the internal decision to consider substantial privatization of its operations) then the agency should have been making a concerted effort to take in enough revenues at the farebox (and through real estate transactions around its stations) to support itself over the long-term.
Instead, MARTA has basically intentionally starved itself of revenues while demanding that the state (a state government that can’t even competently manage or properly fund the ROAD department) pay for everything.
If the state has to pay for everything (or even ANYTHING regarding MARTA), then the state is going to want to call a lot more of the shots when it comes to the agency’s operations.
Heck, the state is likely going to want to call a lot more of the shots even if it does not have to fund everything because of the desire by political factions in North Fulton and North DeKalb counties to have more political control over the operations of those counties’ troubled government agencies.
Privatization is going to be a priority if a state government dominated by union-averse conservatives calls more of the shots.
By depressing its fare revenues (or starving itself of fare revenue) from its inception, MARTA has unintentionally given the state more political power and control over its destiny.
This article that appeared in Atlanta Magazine before the ill-fated T-SPLOST vote gives a good description of how MARTA’s well-intentioned practice of collecting too little in revenues from fares helped it to start out on the path that has virtually led the transit agency to its current state of financial ruin.
Some key passages from the Atlanta Magazine article:
{{“After getting the legislative approval for the sales-tax option, Massell had to persuade voters to pass the sales tax. “We were going to buy the existing bus company, which was then charging sixty cents and a nickel transfer each way—$1.30 a day—and they were about to go out of business. I promised the community we would drop that fare to fifteen cents each way immediately,” Massell says. The daily fare would plunge from $1.30 to thirty cents. Not everyone believed him. City Councilman Henry Dodson cruised the city in a Volkswagen with a PA system that blared, “It’s a trick! If they can’t do it for sixty cents, how are they going to do it for fifteen?””…}}
http://www.atlantamagazine.com/features/2012/08/01/marta-tsplost-transportation
{{“…Another of the blunders that crippled MARTA at the outset—and haunts it to this day—was engineered behind closed doors by the segregationist Lester Maddox, according to Massell, who believes Maddox’s intervention was even more devastating than the vote not to extend MARTA into the suburbs.
After the Georgia House of Representatives approved funding MARTA through the sales tax, Massell had to approach the Georgia State Senate, where Maddox held sway. Maddox told the mayor he would block the vote in the senate unless MARTA agreed that no more than 50 percent of the sales tax revenue would go to operating costs, Massell recalls. “He called me into his office and told me that was it. Either I swallowed that or he was going to kill it and it would not pass.”
That has meant that whenever MARTA needed more money for operating expenses, it had to cut elsewhere or raise fares. As a result, MARTA has raised the fare over the years to today’s $2.50, making it one of the priciest transit systems in the country.
Although the 50 percent limit has resulted in higher fares, few people realized the ramifications of the so-called “Maddox amendment” at the time, Massell says. In fact, it actually was viewed favorably by DeKalb legislators because they were afraid MARTA would spend all its money in Atlanta before extending rail service to DeKalb, according to a thirty-six-page history of MARTA written by former State Treasurer Thomas D. Hills….”}}
{{“….Hills’s MARTA history also illuminates why the state never contributed funds for MARTA, despite that 1966 vote that would have allowed it to. One early plan was for the MARTA sales tax to be three-quarters of a penny, with the state chipping in up to 10 percent of the cost of the system as approved by Georgia voters. But early in his administration, according to Hills’s history, then Governor Carter called MARTA attorney Stell Huie—who was on a quail-hunting trip—and said the state couldn’t afford its $25 million share for MARTA. Carter offered to raise the sales tax to a full penny if the state didn’t have to pay, and Huie agreed. The lawyer said the 1 percent sales tax plan came out of the House Committee on Ways and Means and “there was a tag end, not even part of the act, that just said the state won’t put any money in.”
Hills wrote that the events help to “explain why some representatives of state government and others in the community understand that the state’s support in allowing the local option sales tax for MARTA was a bargain in exchange for a reprieve for the state from future funding for MARTA.””}}
http://www.atlantamagazine.com/features/2012/08/01/marta-tsplost-transportation/page/2
From the Atlanta Magazine article:
{{“Although the 50 percent limit has resulted in higher fares, few people realized the ramifications of the so-called “Maddox amendment” at the time, Massell says. In fact, it actually was viewed favorably by DeKalb legislators because they were afraid MARTA would spend all its money in Atlanta before extending rail service to DeKalb, according to a thirty-six-page history of MARTA written by former State Treasurer Thomas D. Hills.”}}
According to the article in Atlanta Magazine, the state requirement that MARTA put aside 50% of its sales tax revenue for capital improvements originated with an intense and pressing fear by DeKalb officials that MARTA would focus all of its resources and spend all of its money in the City of Atlanta before extending rail service to what was then a much-more suburban DeKalb County.
In other words, DeKalb County officials thought that they might would get rail transit service into the county much-sooner then they might would otherwise with the 50-50 sales tax revenue split forcing MARTA to put aside money to expand its rail lines out of the City of Atlanta and into DeKalb.
At the time, DeKalb County was the hottest suburb in a much-smaller Metro Atlanta as, at the time (circa-1971), DeKalb County was about the equivalent to what Gwinnett County was to Metro Atlanta in the early 1990’s as far as being the fastest-growing and most-popular suburb that was the hottest relocation destination for middle-class families moving out from the City of Atlanta.
From the Atlanta Magazine article:
{{“Hills wrote that the events help to “explain why some representatives of state government and others in the community understand that the state’s support in allowing the local option sales tax for MARTA was a bargain in exchange for a reprieve for the state from future funding for MARTA.””}}
The article also explains that the 1% sales tax was allowed to be levied on retail purchases in Fulton and DeKalb counties in exchange for the state not funding MARTA.
The original deal was for an 0.75% sales tax to be levied and collected in Fulton and DeKalb counties and for the state to provide 10% of MARTA’s funding.
But then-Governor Jimmy Carter said that the state could not afford to provide MARTA with 10% of its funding, so in exchange for not providing 10% of MARTA’s funding the state instead allowed MARTA to collect an entire percentage point of sales tax revenue in Fulton and DeKalb counties.
“A new report commissioned by a national transit union… ”
Enough said.
Oh, the race baiters are out in full force already. The only thing we shouldn’t be standing for is public sector unions. MARTA is deemed with providing an effective service to the public, whom it is supposed to serve, at a reasonable cost. If there are inefficiencies, and there are as with almost every public sector entity, then they should be corrected regardless of the fact that some unnecessary jobs will be eliminated or some wages and benefits will be right-sized. MARTA exists to provide the public a service, not to provide as many people with jobs as possible. It is not a jobs program, it is a public utility.
The real issue that people like ‘Concerned MARTA Rider’ are pissed about is the fact that the taxpayers who contribute the lion’s share of revenues to Fulton County are no longer willing to stand for the bloated public sector that is effectively used as a jobs program for black Atlantans by seeking to employ as many unnecessary staffers as possible and entrenching them in the payrolls through the use of public sector unions. It’s the Democrat way – the only way they know how to create jobs. And anyone who questions that strategy is deemed a racist.
The public sector is not a jobs program. The public sector should only exist to the extent it is actually needed to effectively provide the utility it is deemed with providing. Anything beyond that is pure Democrat cronyism and leads to unnecessarily higher, jobs-and-growth-killing taxes.
The only thing that causes reduced fares and service cuts is MARTA’s gross mismanagement and bloated staff and pay levels, as well as MARTOC’s draconian law mandating how MARTA must spend its revenues, which should be replaced with a 5-year capital plan and budget that is approved and renewed annually.