June 13, 2005

Continuing their aggressive probe of MARTA's financial management, Republican state legislative leaders conducted an extensive briefing with the transit system's top officials just days after the authority's $323.5 million budget for 2006 was approved.

State Rep. Jill Chambers (R-Atlanta) questioned MARTA officials extensively Thursday about the agency's use of a federal tax shelter program discontinued last year. Under the program, widely used by transit systems nationwide before federal officials suspended it, assets such as rail lines and rail cars were leased to companies that could receive tax deductions from depreciating them.

The deals were structured in such a way that MARTA kept full control of the leased property but received cash from the companies in exchange for the tax deduction. MARTA cannot use asset depreciation because, as a government entity, it does not pay taxes.

Over the past three years, MARTA received about $110 million from these tax shelter deals, which were used by transit systems to fund improvements. Congressional leaders persuaded federal officials to close the loophole in early 2004.

MARTA officials also answered Chambers' questions about their use of bond money to purchase fuel under a long-term contract that preserves a constant fuel price throughout its term. That program, said MARTA General Manager Nathaniel Ford, has saved MARTA about $850,000 since fuel prices began rising earlier this year.

At the end of the day, oversight committee officials praised MARTA for its efforts to rein in spending and boost its income.

"What I've heard this afternoon is that MARTA is going in the right direction in terms of its financial management," said state Sen. Vincent Fort (D-Atlanta). "Although the drumbeat we get . . . is that MARTA ought to be taken over because it's been mismanaged, I don't believe that. There's a big hole here, and you know what that is. From my perception, it's state funding."

The next oversight committee meeting will take place Aug. 18.

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