MARTA Service Cuts - an Example for Cincinnati

The print edition of the Economist has a good article about the Metropolitan Atlanta Rapid Transport Authority (MARTA), which runs the buses and trains for Atlanta and is often held up as an example of rail success. Facing a huge budget shortage next year, MARTA is eliminating 40 of its 131 bus lines, raising fares, cutting rail service by 14.2%, and laying off 300 people. Besides the revenue shortfall, MARTA faces problems with feuding local governments and restrictions on its Operating/Capital Budget distribution.

Whether or not you support rail spending (and MARTA appears to be one of the better functioning systems out there), a big drawback of rail is that it is much more capital intensive than buses. If you want to expand bus coverage, you just buy a new bus at a relatively low capital cost and start opperating it on a line. If you want to expand streetcar coverage, you spend $128 million in capital on a 4 mile line. Advocates often point out that streetcars have a lower operating expenses. However, counting the debt payments on this $128 million, they have a much higher ongoing cost than buses and so are more expensive to city (much more expensive per passenger mile).

Besides the price, the other problem with this capital intensity is that this budget structure is much less flexible than that of buses, as over half of its funds are tied up in debt payments. The Economist states that budget shortfalls are common now with "around 160 urban or regional transport systems in America cut service, raised fares or did both in 2009 or 2010." If, as happened recently, a budget cut is mandated - we may have to cut 10% of bus service in a bus only system. But an equal percentage budget cut to a streetcar system may require a 30% cut in service, as debt payments to cover the large capital expense cannot be cut (unless the city wants to default).

With buses and rail planned to be unified under Metro, I worry about budget problems being solved by deep cuts to bus service because that's what can be cut on an ongoing basis. That's how MARTA fixed it's operating budget - a 30% cut in bus routes. This will really hurt the large number of people who regularly depend on buses to get around.