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State-level Revenue Needed for Transportation

December 29, 2014  |  Robert Reichert, Mayor, Macon-Bibb County
Robert ReichertRobert Reichert
I have served 10 years in the Georgia General Assembly as a member of the House of Representatives and 11 years in local government, the last seven as mayor of Macon, now Macon-Bibb County, and it is my privilege to be the current Chairman of the Transportation Policy Committee for the Georgia Municipal Association (GMA). My experience and familiarity with transportation leads me to believe that our failure to provide necessary transportation infrastructure funding is false economy. My opinion is shared by many who are currently serving in political office across this state; there is consensus on the need, the dilemma is finding the necessary funds today, to invest in our transportation infrastructure for tomorrow.

In an effort to address this issue, a joint study committee was established by the General Assembly to investigate and recommend specific ways to address “Critical Transportation Infrastructure Funding,” and their findings and recommendations are forthcoming. In the 2015 Session of the General Assembly, legislators will struggle to choose designating additional sources of revenue or taking funds away from other entities or programs to invest in transportation spending. Although the Joint Legislative Study Committee on Critical Transportation Infrastructure Funding has completed its series of hearings, it is unlikely that there will be a clear legislative path to correct the state’s inability to meet future transportation needs.

I attended several of the transportation funding meetings and suggested an additional 1-cent sales tax, with an eight-year sunset, statewide, except in regions that already voted for the Transportation Investment Act (TIA). The proceeds from this additional sales tax would be designated exclusively for transportation improvements, and all modes of transportation could compete for funding. The Georgia Department of Transportation could select projects, based on a set of specific project criteria such as return on investment, job connections and reductions in commute time. GDOT could also set clearly-defined goals and metrics that can be measured in an objective fashion. The sunset would end the additional tax at the same time as the current TIA is set to expire in those three regions that adopted it. Therefore, it provides a limited time in which to collect additional sales taxes that would be designated specifically for transportation infrastructure, in effect establishing a “special purpose, state option, sales tax.” 

This is the time for state leaders to be bold, yet some advocate for a counterproductive scheme of repurposing or taking sales taxes away from local communities to pay for state projects. This proposal would re-direct sales taxes, which are currently levied by local governments and the state on motor fuel purchases, away from local government and the state general fund, and provide them to GDOT. Such a redirection of existing sales taxes is poor policy that would reduce dollars coming in for cities, counties and schools for voter-approved capital projects approved in Special Purpose Local Option Sales Taxes (SPLOST). Removing motor fuel from the base collection of Local Option Sales Taxes (LOST) would also require a reduction in property tax rollbacks and cause service cuts or property tax increases. A reduction in revenue for Education-SPLOSTs would mean that school systems would struggle even further in meeting their capital funding needs. Atlanta’s Municipal Option Sales Tax (MOST) would bring in less money to pay for the city’s sewer fix, which could cause our capitol city to fail to meet the federal judge’s consent order requiring repairs, and the state general fund would also have a significant reduction.

There are two bitter ironies in the idea of a state-led redirection of local government sales taxes. First, data shows that city and county governments invest significantly more on transportation than is collected by the various distinct local sales taxes on motor fuel. Total local taxes on motor fuel, total dedicated SPLOST funds for transportation projects and total general-fund investments in transportation from local governments amount to $1.33 billion annually. 

Spending on transportation projects solely using SPLOST dollars is $224.6 million higher than the total amount of revenue collected by all tax revenue from local sales taxes applied to gasoline. In addition to SPLOST expenditures, city and county investment in transportation for the year 2012 was $596.9 million, which is the total annual general fund expenditures by counties and cities on highways and streets (source: FYE2012 responses from cities and counties to the DCA Report of Local Government Finances. Reflects expenditures for operation only; local maintenance & improvement grant funds are not included). 

The second irony is that local governments, even without a specifically-dedicated revenue source solely for transportation projects, have for the past 10 years consistently outspent the state on transportation infrastructure. Georgia’s local governments are already carrying their freight, as the expression goes.

It is time for our state’s leaders to find new, state-level revenue to fund the transportation infrastructure investments. This is the time for Georgia’s leaders to be strong and to take aggressive action for the future. I hope they will implement a “special purpose, state option sales tax” that is necessary for Georgia to compete in a global economy while maintaining our cherished quality of life.
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