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

Summary Revenue Challenges • Grant Funding • Sales Tax • Ridership Potential Solutions • Sales Tax on Services • Transit Oriented Development • Technology Driven Solutions 2

Grant Funding Challenges • Low priority of current Administration for public transit  “Trump's Proposed Transit Funding Cuts Are A Great Start On De-Federalizing Local Spendin g ”  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] 3

Sales Tax Challenges • Online e-commerce displacing traditional retailers • Shopping centers closing • Growth of the service based economy  Many professional services are sales tax exempt 4

Ridership Challenges • Gentrification Impacts on Transit Customers • Ride Sharing Services • Low Fuel Prices 5

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

FY15 – FY16 Change in Ridership by Mode - MTA (millions) Source: The Greenlining Institute (Public Transit: Uber’s Next Casualty? [Aug. 3, 2017]) 7 7

MARTA Rider Profiles FY13 FY17 Household Income < $30,000 60% 46% African American 76% 68% Has Alternative 41% 47% Transportation Could have driven own car 29% 35% 8

Gentrification Threatens Public Transit Ridership • “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 Source: Northeastern University Kitty & Michael Dukakis Center for Urban & Regional Policy [October 2010]); reprinted by Reimagine.org 9 9

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 10

The Trend of Low Income Housing in Atlanta Continued… • 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]) 11 11

Public Transit – “A Lonely Road” • An example of the commute time for a transit dependent rider unable to afford intown housing: Two-hour commute - Three modes of transport. 12 12 Source: The Washington Post (A Lonely Road [December 28, 2015])

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 13 13

Potential Tax on Professional Services in Georgia • 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) 14

Sales Tax on Professional Services • 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 15 Source: accountexnetwork.com

Partial Solution - Transit Oriented Development Five or 10 years ago… Corporate site selection groups looked at MARTA just as a pro forma check the box. Today, mass transit is a real and important part of the decision making process. . 16

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 17 17

MARTA’s Transit Oriented Development (TOD) & Livable Housing Continued… • 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 18 18

WALKABLE URBAN PLACES 14% 60% 26% 1990 - 2000 2000 - 2008 2008 - 2013 19

Transit-oriented development, or “TOD”, means development that is vibrant, pedestrian-friendly, and genuinely integrated with transit. 20

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 21 21

Questions…