By Baruch Feigenbaum
The Georgia General Assembly deserves praise for working to improve transit in Georgia. Two bills, one in the House and one in the Senate, focus on the funding and structure of Georgia’s transit systems.
Both bills would create a regional board to oversee transit in 13 metro Atlanta counties, allowing the counties to impose sales taxes for transit projects if approved by voters. The regional board would approve the project lists for any county transit referendum but the taxes could only be spent in the county in which they are raised.
Metro Atlanta commuters often live and work in different communities, making an oversight board critical. Many regions, including Denver and Washington D.C., have boards that help coordinate a seamless payment system, avoid route duplication and ease transfers.
The users-pay/users-benefit principle – that the people who use the transportation resource should pay for it – does not work for transit, which is subsidized. A sales tax is regressive and not the ideal funding mechanism, but it is the most practical funding source since it raises a lot of revenue and is easy to collect.
But area transit agencies should also do more to improve their farebox recovery rates, the percentage of funding from tickets in relation to total spending. They should implement time of day and distance-based fares. The Metropolitan Atlanta Rapid Transit Authority (MARTA) is the only major post-World War II heavy-rail system that uses neither time-of-day nor distance-based fares.
Further, they should use value capture for new capital investments. When a new transit line is built, the values of the surrounding property increases. These increases are tied to transit, so the additional tax revenue should fund the transit systems.
HB 930’s other taxes are problematic. A 1 percent sales tax on consumer goods at the Atlanta (and, questionably, Savannah’s) airport could be replaced with a fee on transit services that serve the airports. The San Francisco Bay Area uses this approach, creating a stronger link between those who use transit services and those who pay for it. The 50-cent sales tax on ridesharing services is problematic. Both Uber and Lyft offer carpool services, a form of transit. Implementing a tax on all ridesharing forces non-subsidized transit services to fund subsidized transit services, a poor policy.
Requiring the regional board to approve a sales tax seems a little heavy-handed. A joint decision by the county and regional board would lead to more consensus while protecting local control.
The biggest difference between the bills is the governing authority. The legislation in the House would make the Georgia Regional Transportation Authority (GRTA) the governing agency for transit planning, capital project approval and funding. While it would make changes to the board, it would leave GRTA in charge of transit governance.
The Senate legislation, in contrast, would keep the existing board at GRTA, create a new board at GRTA, and force every county in metro Atlanta to join MARTA, creating at least four problems:
As the legislative session draws to a close, it would not be the worst thing to finalize a transit bill in 2019. The predictions of doom did not materialize after the region failed to pass the Transportation Investment Act in 2012. Instead, the subsequent 2015 Transportation Funding Act became a model for many states.
If the General Assembly can finetune its current legislation this year that would be great. Even better would be to get transit reform right rather than to cobble together change because of an arbitrary timeline.
Baruch Feigenbaum is a Senior Fellow with the Georgia Public Policy Foundation and Transportation Analyst for Reason Foundation. The Georgia Public Policy Foundation is an independent, nonprofit think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the view of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.
© Georgia Public Policy Foundation (March 9, 2018). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.