Bloglanta

In the past year Atlanta companies have been bought-out at an incredibly fast clip. What does this mean for our economic health? Does it matter to lose a headquarter if you gain that ready cash? Sure, there’s a status change from HQ to division but I wonder if on balance we come out ahead?

Last November, Cisco bought Scientific Atlanta for $6.9 billion, followed quickly by the acquisition of Georgia Pacific by the private company Koch. In the last few months IBM bought ISS and California-based McKesson bought Per-Se for $1.3 and $1.8 billion respectively. All told, over $30 billion in wealth from California, New York and Kansas to shareholders that one would assume are largely locals. Some is going to growing the next generation where ISS’s Chris Klaus’s Advanced Computing center opened at Georgia Tech last month. How much of this money will be used to fund the next startup or expand a new company? As for the remaining divisions, we already know IBM is pouring money into expanding ISS and Cisco is using SA to push IPTV, are the others benefiting as well?

If this is good news, there’s more to come: $80 billion for BellSouth and $8 billion for Delta. If it’s bad news, what would happen if those go and the oft-rumored sale of SunTrust? What do you think? Are we really good at growing attractive companies or are we struggling?

I guess as long as the talented people stick around town while we gain a tremendous amount of wealth that has to be a recipe for long-term success.

Who likes Free Tickets? We all do! Atlanta’s performing arts community has done a smart thing. It’s participating in the National Free Night of Theater. So, Sunday, October first, you can get free tickets to over 40 Theaters! Really! 40 theaters including the Ballet, The Shakespeare Tavern, and the Academy Theater!

Here’s how you get your tickets. They are only be distributed through Atlantix booths! Starting at noon, you can go to either booth and pick up tickets to an event.

Your tickets will be for a show sometime between October 19 and 29th. So! Get the best seats for free!

But wait! There’s more! If you act quickly, you can go to the Smithsonian and download a pass for September 30’s Free Museum Day! All you have to do is download the pass, fill it out and show up! You can get a list of museums here!

Have a Cultural Life!

I’ve noticed a few recently, but apparently there are 9 motion pictures that are being filmed in Atlanta this year in addition to Fox TV’s Vanished. The one last month around Midtown and Inman Park was a Japanese horror film remake called One Missed Call, they set up a number of stunts around the Biltmore. The next one is maybe even stranger…. a remake of the original Revenge of the Nerds. Not sure if either of those will be hits.

Now that the state of Georgia is offering tax incentives to the industry productions have been ramping up and the bulk are being filmed in Atlanta so Mayor Franklin has an assistant specializing in helping them out. He says it has brought some $200 million to the city this year. It’s almost like the 1980’s again.

Any of you who read the AJC’s stories about MARTA know that their reports refer to MARTA’s “budget crisis” with nearly every mention of the authority.

This is a brief look into the reality of that so-called “crisis.”

MARTA’s FY06 budget reveals how real the crisis is, but for reasons beyond MARTA’s control. When the GA Legislature passed the MARTA Act, a restriction was set on how MARTA could spend its tax revenues. 50 percent would go toward operations, and 50 percent would go toward capital. That was back in a time when the heaviest construction was underway, and MARTA’s capital budget needed that money to build a whole new rail system from scratch.

MARTA is still paying off its debts for that construction, but sales tax revenues have gone up since the 1970s. For FY06, only 28% of MARTA’s capital budget is going toward debt service. Thats $125 million. 62.5% of MARTA’s capital budget is going toward reinvesting in and enhancing the system. It’s good to see that, whatever anyone says about the authority, more than half of MARTA’s capital budget is going straight back into the system. But there is a surplus in the FY06 capital budget of $16.46 million. That’s $16.46 million that, by state law, cannot be used toward operations.

A few years ago, two bills were passed in the state legislature allowing some flexibility for MARTA. One bill changed the 50-50 sales tax split to 55-45. That’s 55% going toward MARTA’s operations. The other bill allowed MARTA to use interst income from its capital surplus to go toward operations. These two commonsense measures are about to expire.

You may have seen me go on and on about SB 114 and SB 115 before. But there is more to the issue.

The funding structure in the MARTA Act effectively splits MARTA’s budget in two, and there is a heavy cost to this. If capital revenues are not allowed to benefit operations, there is an artificial limit set to how often the trains and busses can run. And that is what is happening.

Below, you’ll find MARTA’s consolidated budget for FY06 (in millions):

What does this mean? Take a moment to forget about SB 114 and SB 115. These address, but do not fix what is still an arcane and artifical limit on MARTA’s ability to operate. Take away the limitations set by the legislature, and we come to find that the budget crisis is not as real as the AJC would have us believe.

Without the limitations set forth in the MARTA Act, MARTA would have a FY 06 surplus of just over a half-million dollars, and there would be no “crisis.”

This isn’t really a “news flash” type of blog, but I want the community to be aware that it was just announced that Governor Perdue has halted collection of all state gas taxes through September 30.

“My purpose in temporarily suspending fuel tax collection is to relieve some of the financial burden placed on Georgians by disruptions of our fuel supply resulting from the effects of Hurricane Katrina,” Perdue said at a noon press conference at the state Capitol. “I fully considered the fiscal implications. This moratorium will have no negative effect on the state budget.”

The move is expected to gake 15-20 cents off the cost of each gallon of gas, assuming immediate and full retailer compliance. I wonder if the gas pumps’ computers will be easily changed on a quick enough scale to get this done.

Perdue suspends state gasoline taxes (AJC) [registration required, get a login here]

Edit: The moratorium begins at midnight tonight.