A Penny Saved

Two years ago, the hotly contested statewide T-SPLOST failed in all but three Georgia regions, but there are much-needed road projects that still need funding. What are we going to do about it?
Driving Force: Georgia Department of Transportation Commissioner Keith Golden

It’s a tale of 12 Georgia regions: Three have a solid funding source for road improvements; the other nine – including those in the Atlanta metropolitan area – do not.

The imbalance is attributable to one penny: the sales tax that pays for a voter-approved list of transportation projects in the Columbus and Augusta areas, and in a rural central Georgia district including Dublin, Jesup and Vidalia.

The Transportation Special Purpose Local Option Sales Tax (T-SPLOST) has been collected since Jan. 1, 2013, in those three areas following regional referendums in July 2012. Rather than raising an estimated $18 billion statewide as political, transportation and economic development officials had hoped, the T-SPLOST is expected to bring $1.8 billion in 10 years to the three regions collecting the tax.

State Department of Transportation Commissioner Keith Golden says the contrast between regions that approved the T-SPLOST and those that did not has created what he calls “voters’ remorse.”

“There are a lot of people around the state who were opposed to [the T-SPLOST] who are now wishing it had gone the other way,” Golden says.

Georgia has one of the nation’s lowest motor fuel excise tax rates and is near the bottom in per-capita spending on roads and transit – ranked 49th to be exact. To make up for the shortage of state funds, Georgia has relied heavily on federal funding for road and bridge improvements, but those sources are diminishing. Now, we need up to $1 billion a year in new revenue for the state’s transportation network, state leaders say.

“Transportation is a driving force behind this strong economy,” Golden says. “Those two dots are very strongly connected, and I think a lot of times we miss the opportunity to make that very strong point.”

Winners and losers

In the Atlanta region, the T-SPLOST, if passed, would have raised $8.5 million to fund 157 projects. Among them: Three significant efforts to divert commercial trucks from crowded interstate routes; redesign of the interchange for I-285 at I-20 on the west side of the city; reconstructing the I-285/Georgia 400 interchange; and improvements to the I-285/I-85 interchange.

“One of the primary benefits for the [T-SPLOST] was that it provided an opportunity to advance needed projects that [otherwise] are 10 to 25 years away,” says Doug Hooker, Atlanta Regional Commission (ARC) executive director.

Under the T-SPLOST system, 75 percent of the funds generated by the tax pay for specific projects, while local governments have discretionary use of 25 percent of the proceeds for transportation. Many state leaders say they think the regional approach used in the T-SPLOST initiative is what doomed it; indeed, a common denominator of the three areas that approved the tax was that their project lists were relatively short and included local-centric projects like road resurfacing and sidewalks.

“The people who live here are the ones who drive on our roads and see what is needed,” says Mayor Billy Trapnell of Metter, located in the 17-county Middle Georgia Heart of Dixie region that approved raising about $399 million through the tax measure.

“I always say, ‘Take a look at the roads around you. If they are in good shape, then we don’t need [the tax]. But if you have potholes and see them wearing out and cracking, then here’s a chance to do something about it,’” Trapnell says. “As soon as the asphalt started hitting the pavement, the phone started ringing with, ‘Thank you, thank you, thank you.’”

In the Augusta and Columbus regions, local elected officials balanced large projects with local-centric initiatives including resurfacing, multipurpose trails and bike lanes in establishing their sales tax-funded project list. 

“I think everybody saw that they were getting something meaningful as far as their quality of life, as well as their priorities and interests,” says Columbus Mayor Teresa Tomlinson.

About $100 million of the 13-county Augusta region’s $841 million in T-SPLOST revenue will pay for transportation improvements in downtown Augusta. Meanwhile, Columbus and Muscogee County will receive about half of its 16-county region’s $594 million in sales tax proceeds. The largest projects will upgrade the U.S. 280 corridor to Columbus’ inland port and resolve congestion created by railroad tracks in the Five Points area.

“Often times, the citizens can’t see the benefits of a project, and it takes a lot more work on the part of leadership in the community to explain how it benefits the citizens,” says Tomlinson.

State and local elected officials say that in spite of efforts to educate the public about how the T-SPLOST proceeds would be spent, voters had some legitimate reasons, including confusion, to shun the regional sales tax.

“The chamber of commerce spent a lot of money [promoting the referendum’s passage] in the Atlanta region, and when they did that, that was actually negative for us because the ads were saying all the T-SPLOST money would go to the Atlanta region,” says Billy Pittard, the Oglethorpe County Commission chair.

With the referendum’s failure, which also has been attributed to anti-tax and government mistrust among many conservative voters, plans in east Georgia’s Oglethorpe County to build a Lexington-Crawford Bypass and widen U.S. Highway 78 and State Route 10 are indefinitely postponed.

“This has set us way back. Those projects would have been a significant boost for us,” Pittard says.

The T-SPLOST rejection was particularly devastating to Georgia’s fast-growing communities, including the Athens region’s Walton County, which had hoped to receive $156 million to widen State Route 138 and complete the Monroe Bypass, among other projects.

“You say ‘tax’ and everybody goes crazy,” says Kevin Little, who chairs the ACCG and Walton County Commission. “If we had to do it over again, I wish we had had a statewide vote; we’re not going to put our necks on a limb like that again.”

Driving Ahead

While Georgia’s transportation funding conundrum looms, some significant long-awaited, already financed projects in the Atlanta area are moving forward, while ambitious long-term visions are being pursued in the regions that approved the T-SPLOST.

The Department of Transportation has broken ground on 12 miles of managed toll lanes along I-75 south of Atlanta from State Route 155/Mc-Donough Road to State Route 138/ Stockbridge Highway. The $176-million project is slated to be completed in 2017. North of Atlanta, in Cobb and Cherokee counties, work has started on 30 miles of managed toll lanes that will run along I-75 and I-575. The $834-million public-private project is scheduled to open in 2018.

Also, groundbreaking for the largest road project in the state’s history – the $1-billion, public-private-funded I-285 and Georgia 400 interchange – is slated for early 2016.

Tomlinson, meanwhile, has been busy lately pitching the possibility of connecting the Columbus and Atlanta airports, with a stop in Newnan, using high-speed rail. A feasibility study completed in 2014 shows that after a $3.9-billion capital investment, a public-private high-speed rail venture is financially feasible without subsidies using current rights-of-way on I-185 and I-85.

“I think that if we’re going to be a competitive community, we have to start thinking about connecting our economic resources with Atlanta,” Tomlinson says.

There’s at least one exception to the money-can-fix-transportation mantra. “Snow Jam,” the Atlanta area’s high-profile January 2014 nightmare that left many motorists stranded in their cars overnight, had more to do with logistics than funding, state leaders say.

A state task force of officials from emergency management, public safety, transportation and business has since developed short- and long-term solutions, including better weather-monitoring, communication and response plans, as well as more specific recommendations such as using brine to pre-treat interstates.

“It’s something everyone has learned from,” says state Rep. Jay Roberts (R-Ocilla).

A Multi-Pronged Approach

Identifying road-improvement revenue sources was the focus of a four-month review by the 16-member General Assembly-appointed Joint Study Committee on Critical Transportation Infrastructure Funding, which was slated to wrap up its work by Nov. 30. What’s notably different than a decade or two ago, state leaders say, is that the excise tax paid on gasoline has not been indexed for inflation, and steadily improving vehicle mileage means that there are fewer taxable gallons of gasoline being purchased.

“There’s not a one-size-fits-all answer to this,” says study committee co-chair Sen. Steve Gooch (R-Dahlonega). “Fixing this is going to take a multi-pronged approach. We know that for sure.”

Ten legislators and six citizen appointees to the transportation study panel traveled the state from August to November, soliciting input from citizens and local officials. The roadshow seemed to have more participation and focus than previous ad hoc efforts to include the public in solving state policy issues, Gooch says.

“When this was done before, we were dropping into a real heavy recession – not coming out of one,” Gooch says. “So I think there’s a different attitude with constituents and local government groups because you have business growing again, you have jobs coming back and traffic is getting worse. The problem has compounded for eight years because nothing is happening fast enough.”

The legislative study committee was expected to conclude its work with a broad outline of recommendations to guide the discussion going forward as the General Assembly convenes in January.

“In the past, study committees may have been a way to do something without actually doing anything,” says Mike Sullivan, who chairs the Georgia Transportation Alliance, a Georgia Chamber of Commerce advocacy group. “Frankly, legislators are fed up with kicking the can down the road on transportation funding. Rather than just talking about it, they are ready to really do something about it in a significant and long-term way.”

Sullivan says it’s critical that legislators remember that providing transportation infrastructure is among the fundamental roles that only government can perform.

“Local solutions, like multicounty SPLOSTs, should absolutely be one of the tools in our toolbox of solutions, but at the end of the day, Georgia’s major transportation challenge still requires a statewide approach,” says Sullivan. “I think the elected officials all agree that the worst thing they could do, other than doing nothing, would be to spend political capital on a solution that isn’t big enough or long-term enough to really solve the problem. They want to do it right.”

A Matter of Money

While fixing the state’s underfunded system of roads and bridges is sure to be among the 2015 Georgia General Assembly’s foremost priorities, the solution is much more finite than many other public policy challenges.

It’s just a matter of money.

“I tell people that between water, transportation and education, I’m glad I’m working on the easy one, because unlike the other two, transportation can be solved with money,” says Sullivan.

Committee members floated all sorts of recommendations, including increasing the gas tax; ensuring that all gas tax revenue pays for transportation improvements; allowing local government partnerships smaller than the regional approach taken in 2012; more toll roads and managed lanes; a constitutional amendment to fund road projects; municipal local option sales taxes; further capitalizing the state transportation infrastructure bank; and using technology to track drivers’ miles traveled.

In August, former U.S. Transportation Secretary Ray LaHood told the study panel that Georgia should hike the gas tax 10 cents a gallon, calling it “absolutely critical to the future of Georgia.” Streetcars, rail line and bus systems should all play a part in the state’s future transportation plan, he said, to create “economic corridors” to attract companies and jobs to the state.

Keeping It Local

While everyone can agree that more companies and jobs coming to the state is a good thing, the Georgia Municipal Association (GMA) and ACCG are encouraging the legislature to consider non-traditional transportation revenue sources. Among them: enabling two or more counties to create a regional transportation tax referendum, and enabling local governments to ask voters to approve a tax for as little as one-tenth or one-quarter of a penny for specific projects.

“Instead of having a predefined region drive the project list, I think our members feel like the project list should define the region – the reverse of what they did last time,” says Clint Mueller, the ACCG’s legislative director. “And, maybe you’d be able to participate in multiple regions depending on the project.

“It’s just our feeling that local control is best and these decisions are best made on the local level,” he says. “We just want the General Assembly to assist us – and not dictate to us – in doing what must be done.”

In making their case, GMA and ACCG officials point to two local referendums that received overwhelming approval in November: A $200-million transportation bond in Republican-heavy Forsyth County and a MARTA expansion in Clayton County.

“In Forsyth County, the state wasn’t going to get to the project – a 100-percent state route – in 22 years. But they put it out to the voters, and they passed it overwhelmingly,” says Mueller. “That drives home the point that if you allow local governments the flexibility to design what works for them, they can get voters to put their money up – and they’ll build a lot of state roads for the state.”

Legislators also are looking to other states for potential solutions. Florida devotes a much greater percentage of state taxes and fees to transportation than Georgia, and Oregon’s pay-as-you-go fee structure allows larger transportation projects to be split into phases paid for as funding becomes available.

As old vehicles phase out of service and new cars become ever more fuel-efficient, the vehicle-miles-traveled fee would generate much more income than the fuel tax. Mileage-based fees can also be adjusted to discourage motorists from driving on the most congested roads or at the busiest times of day.

“Nothing is off the table,” says Roberts, the committee’s co-chair.

However, the GMA and ACCG reject a notion being pitched to require local governments to dedicate all of the sales tax it collects on gasoline sales to transportation; in some cases, that revenue is directly attributable to rolling back property taxes.

“If property taxes would increase, that’s not adding new money, that’s diverting money that’s already there,” Mueller says.

Lamar Norton, GMA executive director, has emphasized to the study panel that through their taxpayers, local governments in Georgia already pay mightily – about $1.3 million annually – for transportation enhancements.

“We do that through [local sales taxes] and property taxes; we put a lot of money into streets and roads and bridges already,” Norton says. “And we’ve proven that. We’ve shown them the numbers.”

Ultimately, no matter what direction the state decides to take in funding future road projects, one thing is for certain: In order to succeed together, we need to work together to invest in our collective future. 

Categories: Economic Development Features, Features