On roads, Georgia must first spend what it already taxes

(Drew Hurst/SCAD-Atlanta)

(Drew Hurst/SCAD-Atlanta)

Georgia ranks 23rd in transportation taxes and 49th in transportation spending.

Get your mind around that discrepancy, and you’ll understand why Georgia’s lawmakers are talking about the need to spend more on transportation — and why a lot of Georgians are skeptical.

Georgia’s gasoline-tax rate, compared to other states, fluctuates greatly. In 2009, our rate ranked 49th nationally. The recent high was a ranking of 18th, in 2012.

Why so much variation? Our gas tax has two parts: an excise tax of 7.5 cents per gallon, and a sales tax on the purchase. How high or low that sales tax goes depends heavily on the price of gas.

Even in the relatively high-tax years, our spending on roads and bridges remains comparatively low. That’s because the state Constitution dedicates only three-quarters of the sales tax on fuel to transportation. The so-called fourth penny, worth about $180 million per year these days, disappears into the general budget. The local portion of the sales tax on fuel, which yields more than $500 million, may or may not find its way into county transportation budgets.

So, motorists in Georgia pay as much as $700 million per year in fuel taxes that aren’t actually spent on transportation. That’s about half of the annual shortfall state transportation officials say we face for maintenance and limited additions to road capacity (new lanes and rebuilt interchanges, but no new roads).

That’s the starting point. Without dedicating that level of existing funding to transportation, I see no way for legislators to ask taxpayers for more.

Now, about “more.”

I did some digging into how Georgians’ taxes have changed over time, particularly the gas tax. I found a few interesting facts.

The 3 percent sales tax on gas was added in 1981, so I used that year as my starting point to ensure an equal basis. At that time, according to figures from the Georgia Department of Transportation, all gas-tax revenues represented 0.7 percent of aggregate personal income in the state.

The latest data show that, by 2013, gas-tax revenues came out to less than 0.3 percent of personal income.

Had gas-tax revenues remained 0.7 percent of personal income since 1981, the state would have collected an additional $24.3 billion during that time.

The shortfall for the next 20 years, per GDOT: $29 billion. I was surprised the two figures were so close.

It’s not as if Georgians are paying less in taxes overall. Despite the relative reduction in gas taxes, data from the Tax Foundation show state and local taxes in Georgia ate up 6.4 percent of per capita income in the 1980s, 6.7 percent in the 2000s (there aren’t yet sufficient data for the current decade).

Still, all this does suggest a top state priority has been lagging for about three decades. Legislators shouldn’t try to make up the ground all at once, but an increase in transportation taxes accompanied by reductions elsewhere seems like a route worth mapping out.

RELATED:

After decades of waiting, road work ahead

On transportation funding, just be honest with Georgians

Reader Comments 0

72 comments
TicTacs
TicTacs

Like most greedy capitalist, the GOP want to keep all the money and not pay the required expenses.  Too bad.

RoadScholar
RoadScholar

So to summarize from the cons, we do not need to do anything else but to pledge the one penny of sales tax to transportation, and nothing else. We do not need sidewalks, street lighting or improved bike and pedestrian systems, esp safety improvements. We do not need to restore our pavements (riding surface or pot holes). We do not need to 4 lane any arterials. Or to widen expressways or collectors. We do not need any safety improvements; let them die!


Well hate to inform you that other developed areas  have all these features. And we are to compete with them how? Quality of life...being able to walk, and bike safely... streetscapes...are what the developed areas want. So lets not pave or repave any rural areas. Let the pavements and bridges fail. We do not need any new development or growth. We do not need to replace signs and guardrails! Let the local governments handle it. Let an endless batch of Splost programs begin! What is your proposal? Doing nothing is not acceptable! Is not viable!

lvg
lvg

Wow - a two fer from the AJC  in one week of Shady's accomplishments in the race to the bottom. Rural hospitals closing throughout the state due to lack of Medicaid and other funding and 49th in spending on transportation. Have we beaten out Mississippi yet?

RoadScholar
RoadScholar

Kyle, if the gas tax (w and w/o the sales tax) were adjusted to inflation, how much would they be?

MHSmith
MHSmith

Ah why change the injustice found in the dirty politics of dishonest appropriations, since nothing else in corrupt government is justified by honestly collecting and correctly appropriating the money for the stated purpose, when deception to fund inappropriately all manner and sorts of things can be done for political deals and favors to grab power and get money to fund pet peeve programs, because that's the way everything else is funded and appropriated in government.

Logic... Yeah, right?!

Nah, I'm still with you and your logic Kyle. At least it is a bit more honest and lacks some taint from back room dealing. 



MarkVV
MarkVV

It would be interesting if someone tried to justify with some logic why the fuel tax should be used exclusively for transportation funding, when it should be clear that the same is not true for other sources of revenue vs expenditures.

RafeHollister
RafeHollister

@MarkVV So, what if we diverted some of that Medicare tax, taken from your paycheck, and used it to rebuild the military?  That OK with you?

LilBarryBailout
LilBarryBailout

@MarkVV

When the folks who want to raise the fuel tax argue that the tax is obviously too low because it doesn't bring in enough revenue to pay for road building and maintenance, it's perfectly reasonable to point out that part of the reason that is so is because the revenue is being siphoned off for non-road spending.

straker
straker

Barry - "is diverted to other uses"


And, that's just the tip of the skimming iceberg. 

JAKilgoreBrunswick
JAKilgoreBrunswick

Mr. Wingfield must be receiving a salary supplement from GDOT and Keith Golden.  Georgia has NEVER ranked 49th in the area of aggregate gas tax, and all he needed to do is consult the American Petroleum Institute to learn that.  Typical misleading garbage that is routinely published by GDOT to attempt to influence Georgia's taxpayers that we have been unreasonable.  Maybe one day the staff at the AJC will figure that out, unless there is some other motive. 


The transit problem is an Atlanta problem, and the wizards of smart in the General Assembly better force the ARC to deal with this problem rather than trying to cram down a statewide solution.  Georgia ranks in the top ten nationally in terms of the quality of our roads.  Particularly in the area of rural highways. 


Since a significant portion of the "problem" is Atlanta based, most of the new funding should be derived from user fees, like toll roads and MARTA fees.  Then deal with the other "problems" that cannot be solved through user fees by implementing a PPP program similar to what has been done in Chicago and Miami for major projects.  Finally, the state should be pushing the Tom Wages legislation that would retain the $ .184 per gallon federal tax in Georgia rather than sending it to Washington to go into the FHTF pot.  Stupid, just plain stupid to send that to the federal government. 


Seizing the local tax component of fuel tax and forcing the various County Commissioners to increase the local property taxes to make up for the shortfall created by the state taking the local money is just plain DUMB.  How do they expect that the respective counties will fund their local projects ?  


In conclusion, if the General Assembly can find a vendor selling smart pills, then maybe they can leave the overburdened taxpayers alone and develop some creative solutions.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @JAKilgoreBrunswick Not saying their numbers are incorrect but the Tax Foundation is not exactly a neutral source.


They have been criticized for  "methodological errors" in the past and some say deliberate fraud

Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar This is straight reporting of API's number, no calculations, methodology, or anything else involved.

BTW, "fraud" = ideological disagreement. Every time I've seen that accusation made, anyway.

Hedley_Lammar
Hedley_Lammar

@IReportYouWhine#1 @HeadleyLamar @Kyle_Wingfield 


Certainly



The Tax Foundation's annual study that calculate Tax Freedom Days in the United States has been criticized by other think tanks, such as the Center on Budget and Policy Priorities (CBPP)[34] and Citizens for Tax Justice(CTJ),[35] citing repeated "methodological errors" and "reliance on early projections without hard data." CBPP has also criticized other reports by the Tax Foundation,


http://en.wikipedia.org/wiki/Tax_Foundation


They are funded by the likes of Exxon Mobil and the Koch brothers which means they definitely lean in one direction politically.


http://www.cbpp.org/cms/index.cfm?fa=archivePage&id=taxday98.htm


But the picture the Tax Foundation's reports portray — that the tax burden on the average family is exceptionally high and has been rising — is not accurate. The Tax Foundation's methodology substantially exaggerates the amount of taxes that typical or average middle class families pay. Under the methods the Tax Foundation uses, an increase in taxes solely on high-income taxpayers is pictured as increasing the taxes the average taxpayer pays. This methodology can produce particularly sharp distortions when taxes are raised primarily on affluent taxpayers, as they were under the 1990 and 1993 deficit reduction laws, and when, as at present, large increases in the stock market cause wealthy investors to reap huge capital gains profits and pay more capital gains taxes on them.


It isn't just Paul Krugman who is critical of them. Many are




Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar BREAKING: Left-wing think tank criticizes right-leaning think tank -- SEVENTEEN YEARS AGO.

Like I said: "fraud" = ideological disagreement.

Hedley_Lammar
Hedley_Lammar

@IReportYouWhine#1 @Kyle_Wingfield Either way I'm not getting off on a discussion of the tax foundation.


I'm certain the numbers Kyle references are correct here. Just was making the point that not all of us would always take them as gospel as Kyle seems to do.


Have a great weekend guys

Kyle_Wingfield
Kyle_Wingfield moderator

@JAKilgoreBrunswick "Mr. Wingfield must be receiving a salary supplement from GDOT and Keith Golden.  Georgia has NEVER ranked 49th in the area of aggregate gas tax, and all he needed to do is consult the American Petroleum Institute to learn that."

Pro tip: When people start accusing journalists of being on the take, it's because they know their own argument sucks.

Another pro tip: When a journalist includes the source of the information used, it's really easy to go check that source. Here, again, is mine: http://taxfoundation.org/article/state-gasoline-tax-rates-2009-2013

Click on the tab for 2009, check Georgia's ranking (49th), and then scroll to the bottom to see the source: Mr. Kilgore's infallible American Petroleum Institute.

That'll be the last time Mr. Kilgore posts here.

LilBarryBailout
LilBarryBailout

Theft of gas tax revenue occurs at the federal level too.  About 25% of federal gas tax revenues is diverted to other uses.

Fix that problem before whining about running out of money.

And the same folks whining about the gas taxes we pay not covering the cost of building and maintaining roads are just fine with MARTA fare revenue covering a mere 20% of the cost of operating MARTA.

MHSmith
MHSmith

Spot on, Kyle. Tax spending diversions ( money collected for one purpose, spent for another cause) like this one unfortunately is the nature of politics and often the reason behind bad political deal making for appropriations. 


The tobacco settlement suit brought against the tobacco companies by the federal government is another prime example: The government has never paid out a just portion of that money to treat the cancers caused by the use of tobacco products. Lung Cancer kills more people than any other cancer in America, close to 20% even among non-smokers. In fact, Lung Cancer kills more people than the next three leading cancer caused deaths in this country combined: Breast, prostate and colon cancers . However, breast cancer, which has around a 98% cure rate, receives the most funding.


When I hear people say, think pink, I see red!


More money for roads likely is needed, but spend what is already been and is being collected correctly first. 

Plumb Krazy
Plumb Krazy

Tax airline and railroad fuel use. And add sales taxes back tp energy used by businesses. And do away with GATE cards. Then come back and tell me I need to pay more taxes on gasoline.

MarkVV
MarkVV

There is no doubt that transportation is one of the top priorities for state spending. However, it is a weak argument to demand that fuel taxes should be used exclusively for transportation funding, because such a relationship would be inconsistent with other taxes and spending. When we pay a sales tax on food, we do not expect those taxes to be used exclusively for something related to food. Taxes on tobacco and alcohol may be thought to be justified by expenses related to the use of those products, but nobody demands an accounting of that relationship.

Don't Tread
Don't Tread

Here's yet another reason why Republicans are merely the lesser of two evils.  We need a viable third political party.

JohnnyReb
JohnnyReb

@DontTread - my guess is diversion of transportation taxes to the general fund predates Republican control.  And, I understand this issue is not unique to Georgia.

With that aside, I agree we need a third party but even if attempts to form one took place it would likely be splintered and unsuccessful as for reasons such as one person being unhappy with Democrats, another with Republicans but the two don't agree enough to make anything happen.

My preference is to see Conservatives continue to take over the Republican party but that is a tall order as the Republican elites are extremely well funded.

dontstereotypemeyo
dontstereotypemeyo

@Kyle:

"And I further assume you think I'm excluding transit on purpose. (BTW, does that mean you think headline writers who use "transit" as shorthand for "transportation" are excluding roads and bridges? Makes about as much sense.)"


Actually, I have rarely (if ever) seen "transit" or "roads" referred to as all-encompassing, but strictly to refer to one or the other (the same with highways, mass transit, public transportation etc.) As a matter of fact, public transportation also is exclusively used to refer to mass transit when in truth public transportation does include roads, highways, toll roads, airports and everything BUT (the very few) wholly privately built and funded projects!


But in any event, a lot of the municipalities that have a gas tax have never pretended that such a tax is to be used only for transportation. This is especially true for the areas that have very little new transportation projects to speak of, and their entire transportation outlays are to maintain the ROADS that they do have. There is also the fact that even areas that do have significant transportation expenditures nevertheless raise more from their gas tax than they need. In both cases, what you are proposing would mean taking tax revenue from those places - which are as disparate as getting a few hundred thousand from decently populated but still rural area to tens of millions from an urban area - and redistributing them elsewhere. Taking gas tax revenue from Lowndes County and sending it to the GDOT bothers me a lot. Taking it from Fulton, DeKalb and Clayton (who already pays a penny of extra tax, including on gas, to help regional TRANSIT needs via MARTA) and sending it to GDOT bothers me even more. If Lowndes doesn't have any transportation needs beyond routine maintenance and Fulton's transportation needs are more than covered by their taxes, then why should GDOT take their money and use it on projects in communities that have transportation needs but refuse to raise the gas, sales, millage etc. taxes to generate it? 


So fine, give the fourth penny at the state level to the GDOT, but leave the county and city revenue with the counties and cities. If the people in those areas do not like how their gas taxes are being spent, it is their job to elect new leadership, not for the state to come confiscate it.

Kyle_Wingfield
Kyle_Wingfield moderator

@dontstereotypemeyo "Actually, I have rarely (if ever) seen "transit" or "roads" referred to as all-encompassing, but strictly to refer to one or the other (the same with highways, mass transit, public transportation etc.)"

It's used that way in our paper all the time. That's not a complaint, just an observation.

RoadScholar
RoadScholar

@dontstereotypemeyo So the rest of the state does not benefit from Atlanta or other areas , urban or rural, in Georgia? Are you kidding me? Atlanta consumes what is grown and made in rural Ga. If it doesn't consume it, it passes through the Atlanta region to other markets north of here. DUH!

JohnnyReb
JohnnyReb

Without doing any research but comfortably going out on a limb, my guess is the transportation tax money put in the general fund is used on the biggest outlay - social programs.

RafeHollister
RafeHollister

Remember, asking people about possible projects and there scope is like asking people what they had for dinner last night...they don't remember !


True that it is frustrating, but if you don't listen to the people you wind up with things like the "Bridge to Nowhere" or "ramp meters". 

LogicalDude
LogicalDude

Gas prices plummet.  Gas tax of 2 more cents makes sense for the next two years. 

Starik
Starik

Georgia people hate taxes, but want a competent, efficient government...except for the anarchists and tea partiers. Excluding county supplements, what do critical state employees like lawyers, teachers, GBI, State Patrolmen and the like make?  Not much. Not enough to recruit and retain a competent workforce.

Pub Heaven
Pub Heaven

159 county commissions losing discretion over $500 million/year?

That would be a Brave New World...

SmartAleck
SmartAleck

There is absolutely no reason to raise ANY taxes.  The combination of the 4th penny, mandating fuel tax dollars be spent on transportation, user fees (tolls) on new lanes/construction, PPPs, and new revenue coming from the growth--should be AMPLE to feed this need.  
I suggest the legislators avoid saddling taxpayers with long-term money pits like mass transit.  Check ANY statistic and a low density, sprawl-based city like Atlanta will NEVER, EVER solve traffic congestion through transit. 
Let's see if our esteemed elected officials have the wherewithal to creatively solve this problem, versus take the common default position to raise taxes.  
Remember, NOBODY, including the socialist democrats ran on RAISING taxes!  

Fix this challenge with existing revenues!  

RoadScholar
RoadScholar

@SmartAleck What part of just committing the 4th penny won't address our needs do you not understand? PPP's are not cost effective since it costs more to plan, build, and operate and maintain them than the revenue they provide. I 85 was the exception since it used existing pavement through restriping it. Present GDOT Board policy calls for widening the road to provide the Managed Lane.


They are down to overlaying 2% of the state routes each year when in the past they did 10% per year. And GDOT is the Dept of Transportation, not your State Highway Department! All modes need to be addressed.

dontstereotypemeyo
dontstereotypemeyo

@SmartAleck


You can't fix sprawl with more sprawl though. Compare Atlanta 20 years ago to Atlanta now: much more spread out with a lot more urban, high density areas with huge traffic problems. What used to be a problem that only affected Fulton, DeKalb, Cobb and Gwinnett now sees terrible traffic in places like Cherokee, Douglas and Henry that were considered rural in the mid-90s. We can either keep building further and further out - making things that much more unwieldly and expensive to manage and solve - or we can do something to try to concentrate the population density. This is especially the case when - as the sprawl goes further and further out - some of the places that were trendy and high income one day become declining and dilapidated the next. Lots of places in Cobb and Gwinnett are in serious decline and are not going to attract private investment unless something changes. However, those areas WILL require a lot of tax dollars to maintain (and police). 10 years from now, the same will be said about areas in Cherokee and Douglas. 20 years from now, it will apply to south Forsyth. That is something that you need to consider.

JamVet
JamVet

@SmartAleck 

Obviously you did not even read Kyle's article, detailing an impending $29,000,000,000.00 shortfall in a state that can barely pay for education and basic services any more...

Kyle_Wingfield
Kyle_Wingfield moderator

@JamVet "a state that can barely pay for education"

We rank right smack dab in the middle nationally in per-pupil funding.

SmartAleck
SmartAleck

@dontstereotypemeyo @SmartAleck Clearly, you are perfectly willing to provide a never-ending stream of taxpayers cash flowing into a transportation system that will have NO IMPACT on congestion, efficiency of movement, or moving people.  Atlanta IS what it IS--and it is a large geographic dispersed area---think SPRAWL!  ANY objective research will educate you that NO AMOUNT of investment in public transit is self sustaining.  

"Cobb and Gwinnett in serious decline".....REALLY?  You're going to have to PROVE that!  


So----NO---I do not want to commit future generations to an unending, bureaucratic, non-solution like public transit.  

RafeHollister
RafeHollister

@HeadleyLamar Harry Reid grubered that one through, and we wait to see how much it benefits anyone, other than the union folks who built it.

Hedley_Lammar
Hedley_Lammar

@IReportYouWhine#1 @HeadleyLamar That is the attitude that continually keeps Georgia 20 years behind


While a progressive state like California has the 8th largest economy in the world. 


They look forward. We look backwards. 

SmartAleck
SmartAleck

@HeadleyLamar Yea, Yea.....That's the ticket!!  Let's be like California!!!  $422 BILLION IN DEBT!!