BRADENTON, Fla. — Metropolitan Atlanta Rapid Transit Authority officials said Tuesday that the American Energy and Infrastructure Jobs Act creates funding uncertainties because it would eliminate federal fuel taxes now dedicated for transit agencies.
Under H.R. 7, a $260 billion five-year highway and transit funding bill sponsored by Rep. John Mica, R-Fla., public transit would receive a one-time appropriation with no funding after 2016, according to MARTA, whose board of directors passed a resolution opposing the measure.
MARTA, the country’s ninth-largest transit agency, said if Mica’s bill passes as proposed it “would jeopardize the ability of transit agencies to continue providing transportation to millions of customers here in metro Atlanta and across the country.”
In the current fiscal year, federal funds support about 10% of MARTA’s operating costs and 22% of the transit authority’s capital improvement program. Capital funding and operations are further supported by a 1% sales tax levied in Fulton and DeKalb counties, in addition to fare box revenues.
As of July 1, 2011, the authority had $1.52 billion of outstanding sales tax revenue bonds. Another $226 million was also outstanding in its commercial paper program.
Moody's Investors Service rates MARTA’s first- and second-lien sales tax bonds Aa2, and the third-lien bonds Aa3. Standard & Poor's rates the first-lien bonds AAA, and the second- and third-lien bonds AA-plus. The first-lien bonds have a closed indenture.
“The loss of federal funding would not impact MARTA’s ability to pay debt service,” said agency spokesman Lyle Harris. He noted that debt service is paid directly from sales tax proceeds by the bond trustee.
MARTA has struggled with declining revenue since the recession, in addition to a state-imposed restriction on the use of sales tax revenues for operations versus paying debt. The state relaxed the sales tax restriction in 2010 but the transit authority has cut service and raised fares for several years in response to recessionary pressures.
In July, referendums in various regions across Georgia will be held to get voter approval for a 10-year, 1-cent sales tax increase to provide funding for transportation, including Atlanta and 10 surrounding counties.
MARTA said Mica’s bill, if passed, could make it more difficult to leverage federal dollars to maximize investments in projects benefiting from the local transportation tax funding.
Since 1983, nearly half of all public transportation funding has been provided from the federal motor fuels tax dedicated to the Highway Trust Fund.
“This funding structure has successfully provided highway and transit programs with secure, dedicated revenues and has allowed public transit systems around the country to create jobs and foster economic growth,” Harris said.
Mica’s proposal “would create deep uncertainty for MARTA as well as other transit service providers in metro Atlanta including the Georgia Regional Transportation Authority, Cobb Community Transit, and Gwinnett County Transit,” he said. “The loss of a dedicated revenue source would likely result in decreases in future federal funding to MARTA, which would force reductions in our transit service levels and seriously hamper future prospects for expansion.”
