Transit Challenges Ridership and Funding Gordon L. Hutchinson CFO, - - PowerPoint PPT Presentation

Transit Challenges Ridership and Funding

Gordon L. Hutchinson CFO, MARTA Southern Municipal Finance Society Conference September 28, 2017

Revenue Challenges

• Grant Funding
• Sales Tax
• Ridership

Potential Solutions

• Sales Tax on Services
• Transit Oriented Development
• Technology Driven Solutions

Summary

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• Low priority of current Administration for public transit
• “Trump's Proposed Transit Funding Cuts Are A Great

Start On De-Federalizing Local Spending”

• President Trump’s proposed budget will cut federal

transportation spending by 13%

• All will come from transit projects – not highways

Source: curbed.com [March 16, 2017], Forbes [April 2, 2017]

Grant Funding Challenges

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• Online e-commerce displacing traditional

retailers

• Shopping centers closing
• Growth of the service based economy
• Many professional services are sales tax

exempt Sales Tax Challenges

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• Gentrification Impacts on Transit Customers
• Ride Sharing Services
• Low Fuel Prices

Ridership Challenges

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FY11 – FY17 Ridership Trend

139.9 134.9 129.9 129.1 136.0 133.4 126.4 125 130 135 140 145 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (millions) 6

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FY15 – FY16 Change in Ridership by Mode - MTA

(millions) Source: The Greenlining Institute (Public Transit: Uber’s Next Casualty? [Aug. 3, 2017]) 7

FY13 FY17 Household Income < $30,000 60% 46% African American 76% 68% Has Alternative Transportation 41% 47% Could have driven own car 29% 35%

MARTA Rider Profiles

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Gentrification Threatens Public Transit Ridership

Source: Northeastern University Kitty & Michael Dukakis Center for Urban & Regional Policy [October 2010]); reprinted by Reimagine.org

• “New Report Finds That Gentrification in Transit-Rich

Neighborhoods, Endangers Transit Ridership”

• Gentrification is a pattern of neighborhood change

marked by rising housing costs and incomes

• Neighborhood renters are forced to pay more for

housing

• Vehicle ownership rises as incomes rise

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The Trend of Low Income Housing in Atlanta

• Since the mid-1990s, aging public housing stock has

been replaced with new mixed-income communities

• Reduced affordable housing amid new luxury

developments

Source: The Atlanta Journal Constitution (Team Picked to Transform former Atlanta Low-Income Housing Complex [July 19, 2016]) 10

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The Trend of Low Income Housing in Atlanta

• 5 percent loss of affordable units per year since 2012
• Most new apartments since 2012 are luxury
• More than half of renters pay more than 30

percent of their monthly income on housing

Source: The Atlanta Journal Constitution (Team Picked to Transform former Atlanta Low-Income Housing Complex [July 19, 2016])

Continued…

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Public Transit – “A Lonely Road”

Source: The Washington Post (A Lonely Road [December 28, 2015])

• An example of the commute time for a transit dependent rider

unable to afford intown housing:

Two-hour commute - Three modes of transport.

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Potential Grant Funding Solutions

• Explore increases in State and Municipal funding
• Expansion of sales tax
• Tax allocation districts
• State investment grants
• Access improvements in partnership with

property developers

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• More than $1 billion dollars per year (in 2012 dollars)
• Key Assumptions
• Over 100 types of services could be taxed
• Household purchases only
• Service Categories include:
• Politically challenging to Achieve

Source: GSU Andrew Young School of Policy Studies (February 2011)

Potential Tax on Professional Services in Georgia

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• Four (4) States Charge Sales Tax on Services
• South Dakota
• Hawaii
• West Virginia
• New Mexico
• Five (5) States Charge Sales Tax on Less Than

Twenty (20) Services

• Colorado
• Illinois
• Massachusetts
• Nevada
• Virginia

Source: accountexnetwork.com

Sales Tax on Professional Services

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Today, mass transit is a real and important part of the decision making process. . Five or 10 years ago… Corporate site selection groups looked at MARTA just as a pro forma check the box.

Partial Solution - Transit Oriented Development

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MARTA’s Transit Oriented Development (TOD) & Livable Housing

• Station-area development
• Convenient to live, work, shop, go to school, use

the library, & play

• Neighborhood Vibrancy – great lighting,

sidewalks, access ways

• Requires less parking than non-transit locations
• Safety and beautification

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MARTA’s Transit Oriented Development (TOD) & Livable Housing

• MARTA values livable/affordable housing:
• Includes transit dependent riders
• Each TOD plan includes affordable housing
• Promote a sustainable, affordable, and growing

future for Metro Atlanta

Continued…

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1990 - 2000 2000 - 2008 2008 - 2013

WALKABLE URBAN PLACES

14% 60% 26%

Transit-oriented development, or “TOD”, means development that is vibrant, pedestrian-friendly, and genuinely integrated with transit.

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Technology Driven Solutions

• Implementing Mobile Payments
• Wi-Fi on Buses and Trains
• Next Bus and Train Apps
• See and Say App
• Flexible bus routes and circulators

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Questions…