Georgia Tax Increase for Fixed Rail Transit?


Georgia Tax Increase for Fixed Rail Transit?

Members of the Georgia Senate State and Local Government Operations Committee:

My name is Baruch Feigenbaum. I am the Assistant Director of Transportation Policy at Reason Foundation, a non-profit think tank. I am also a Senior Fellow with the Georgia Public Policy Foundation. For almost four decades Reason’s transportation experts have been advising federal, state and local policymakers on transportation matters.

My Credentials on Today’s Topic

I am a graduate of the Georgia Institute of Technology with a Master’s Degree in Transportation Planning and significant coursework in Engineering. My Master’s Paper studied Induced Demand in growing areas and potential solutions. I live and work in the city of Roswell in Fulton County. With Reason, I have authored studies on mobility, highway quality, highway congestion, transit options, funding alternatives and innovative financing. I authored a paper on Increasing Mobility in Georgia that recommended many of the suggestions in last year’s Transportation Funding Act of 2015 that was passed by the General Assembly and signed by Governor Deal. In addition, I have worked with several states including North Carolina, Pennsylvania and Virginia to implement transportation policy and funding reform. I currently serve on two National Academy of Sciences Transportation Research Board Committees, Bus Transit Systems and Intelligent Transportation Systems. Further, I am active on the Transportation Revenue and Financing and Metropolitan Planning Committees. My testimony today draws on these experiences.

Overview of Testimony

Senate Bill 313 would provide voters with the option of increasing Georgia’s sales tax by 0.5 cents to fund several rail expansions. There is considerable interest in building an 11.9-mile MARTA rail expansion from North Springs Station in Sandy Springs to Windward Parkway in Alpharetta, a proposed light rail line from Lindbergh station to Emory, and a proposed Blue Line extension from Indian Creek Station to Lithonia.

Each corridor is unique. The Clifton Corridor line (Brookhaven to Emory) is the most promising line due to its high densities and commuting patterns and may make more sense as a Heavy Rail line due to the tunneling needed. However, for the Red Line to Alpharetta, the combination of the high cost of rail expansion and the corridor’s low population and employment densities make a bus rapid transit/express bus line using SR 400’s soon-to-be-constructed express lanes a much better option.

Paying for Transit

While a 0.5 percent countywide sales tax is the most likely funding option for these lines, it is far from the best. From a policy perspective, there is no relationship between how much a person pays for a market basket of goods and how much transportation he or she uses. Increasing the sales tax makes enacting comprehensive tax reform in Georgia challenging. Increasing the sales tax is also regressive; it harms low-income riders who depend on transit the most. The proposed new sales tax would be in effect for 40 years, until 2057. This is a long time given the long-term uncertainty of transportation funding and technological development.

A better funding option is to provide a small amount of funding from the General Fund. Legislators can dedicate between $120 million and $200 million per year to transit funding. Funds would be available for all types of transit and paratransit service but would require a 50% match by local counties or cities. Metro Atlanta counties would most likely use this revenue for rail, bus rapid transit, express bus and local bus service. Counties throughout Georgia would use this revenue for local bus and paratransit service. Some type of local transit service is offered in 103 of Georgia’s 159 counties. Providing quality transit service is an issue for more than one or two counties.

Local Roadway Needs

Most metro counties have significant local roadway needs. Due to a tight budget, numerous locally controlled roadways need to be expanded or rehabilitated. Politically, any transportation tax increase must include funding for roadways. Census data shows that in the Atlanta urbanized region only 3.5% of workers commute to work using transit. In Georgia as a whole that number is 2.1%. Even fewer travelers use transit for leisure activities. While we need to improve the regional transit network, it is unrealistic to devote 0.50% sales tax to transit and nothing to local roadways.

MARTA Cost, Ridership and Density

One of the justifications for rail transit lines is that Millennials will not move to neighborhoods without rail transit. However, there is no peer-reviewed academic data to support this claim. In fact, Millennials are just as likely to use high quality bus service as rail service. 2015, the first half of the Millennial cohort (27-36 year olds) bought more cars per capita than any other ten-year cohort. And nationwide, miles driven increased 3.6 percent between 2014 and 2015. After declining during the Great Recession, VMT set another all time record in the Atlanta urbanized area for 2015.

For the first nine months of 2015, MARTA carried 3 percent fewer riders than the year before. Prior MARTA rail extensions have not met their ridership predictions. The previous Red Line expansion from Dunwoody to North Springs carried only about 1/3 of the ridership it was forecasted to carry. Certain stations have struggled even more. For some MARTA rail stations for every 25 riders expected to take MARTA, only 1 did. Predicting rail transit ridership is very challenging, but past Atlanta regional projections have erred on the high side.

Another justification for rail is that businesses will only locate on rail lines. While some businesses like the proximity of transit, many choose the lower rents of areas with lesser transit service. Many other businesses would be more than satisfied with high quality bus service. For the remainder of businesses that want to locate on rail lines, MARTA’s current system and the potential expansion to Emory, offers plenty of different location options. Others have speculated that rail transit, but not bus, will attract new residents and spur business development. Yet there is no academic support for this argument and we have an existing 50-mile rail system for those who want rail.

Constructing heavy rail is expensive. The $209 million per mile cost estimated for the Red Line expansion is similar to the most recent MARTA extension, from Dunwoody to North Springs, which cost $201 million per mile – 16 years ago. The high costs of rail can be justified in areas with a larger percentage of jobs located in downtown cores and high density around transit stations. Unlike Manhattan in New York City or the downtown area in the District of Columbia, where a high percentage of jobs are downtown, less than 5 percent of metro Atlanta’s jobs are located downtown. In fact, the city of Atlanta as a whole has less than 10 percent of the region’s population. Rail systems, which are hub and spoke, are designed to transport workers from suburban regions to downtowns. But many metro Atlanta jobs are in the suburbs and most workers commute from suburb to suburb. Many residents of North Fulton commute to the Cumberland area, North DeKalb area or other job centers without rail service. Expanding the rail line is no benefit to all these workers.

As for density: The Metropolitan Transit Authority (MTA) of New York City is building the Second Avenue subway in a corridor with a population density of 70,000 people per square mile. The Washington Metropolitan Area Transportation Authority (WMATA) is expanding the Silver Line in an area with population densities approaching 5,000 people per square mile. Even the Washington area is on the low end of corridors that can support heavy rail. The north Fulton corridor, in contrast, has a population density of approximately 1,500 people per square mile, far too low to support rail.

New transit technology is likely to revolutionize transit service over the next 30 years. Many Millennials are substituting ridesharing services such as Uber and Lyft for traditional fixed-route transit. Autonomous vehicles while still in the development stage, are likely to revolutionize transit service and land use within 40 years. While quality mass transit service is important today, policy makers should build a system that has the flexibility to evolve with new technological developments.

Even if a ½ cent sales tax were approved, it would take a very long time to pay back the funds. In current year dollars, a one half-penny sales tax increase in Fulton County is estimated to raise approximately $100 million per year. The cost of MARTA’s heavy rail expansion from North Springs to Windward Parkway is estimated to cost at least $2.4 billion, or $209 million per mile. The federal government provides funding for transit capital, but typically far less than 50 percent of the project’s total capital cost; often the federal government provides only a 20 percent share. Adjusting for inflation and assuming that the federal government pays 25 percent of the construction costs and that 50 percent of the 0.5 cent sales tax supports the Red Line extension up SR 400 and 50 percent supports other projects such as the proposed line from Lindbergh Station to Emory, decreased headways on existing heavy rail lines and better bus service, it will take 51 years of sales tax revenue to pay off the Red Line extension project, not including interest.

A Bus Rapid Transit (BRT) or Express Bus line would be a much better fit for this corridor. Unlike a new rail line, the running way for the buses can be funded with existing revenue. As a result of last year’s Georgia Transportation Funding Act, GDOT plans to build two managed lanes in each direction on SR 400 from I-285 to McFarland Road. These lanes will offer a new variably tolled travel option for drivers as well as provide a semi-dedicated right of way for buses – a “virtual” BRT line. Best of all, the running ways for the buses can be paid for with expected revenue. No tax increase is needed to fund this service.

Express bus and BRT are not your father’s bus services. Express buses are comfortable coach buses featuring wi-fi and televisions. BRT buses includes many features that differentiate them from traditional local buses including running way priority, unique station design, larger vehicles, electronic/smart card collection, intelligent transportation system features such as signal prioritization, and more frequent service. BRT stations typically include land use changes, elevated boarding platforms and electronic signage (such as real-time next bus arrival notification). On metro Atlanta surface streets, BRT lite, (in which buses share lanes with cars and receive priority signaling), is the best solution. BRT heavy, where buses have a dedicated lane, could be implemented in corridors with more than 20 buses per hour.

North Fulton could have BRT connections to East Cobb, North DeKalb, Southwest Gwinnett, South Forsyth, and Southeast Cherokee counties. Rail is estimated to be 16- to 22 times the cost of bus rapid transit, which means that for one MARTA heavy-rail expansion we could provide 20 high quality bus rapid transit expansions.

Thank you for the opportunity to testify today on transit expansion. I would be happy to answer any and all questions, either orally or in writing.