New transportation funding continues to evolve under Gold Dome

AJC Photo / Bob Andres

Gov. Nathan Deal addresses legislators in December. AJC Photo / Bob Andres

Gov. Nathan Deal addresses legislators in December. AJC Photo / Bob Andres

It appears that new funding for transportation infrastructure has the political support to live up to the pre-session hype, or at least some of it.

Earlier today, Gov. Nathan Deal made his clearest statement yet to that effect, telling the audience at a Georgia Chamber event, “I want to make it clear here this morning that I support increasing funding for strategic transportation investments.” The details of what he means by “increasing” and “strategic” could trickle out in the days to come, or the governor could choose to simply underline support for new funding while leaving the details mostly to legislators. Either way, that statement, combined with continued insistence by Speaker David Ralston and Lt. Gov. Casey Cagle that “doing nothing is not an option,” mean it’s highly likely some kind of measure will be passed this year.

What kind? I began hearing rumblings a couple of weeks ago about a possible cigarette-tax hike, and my AJC colleagues have an early outline as to how that might be linked to transportation:

“(A)ccording to those who have heard the plan, raising the cigarette tax would generate new revenue to help pay for Medicaid, the joint state-federal health care program for the poor and disabled. That, in turn, would free up other state dollars to help pay for transportation projects.”

A few initial thoughts:

1. A gas tax is almost certainly equatable to a user fee, paid by motorists for the use of roads, highways and bridges. A cigarette tax is somewhat less of a direct user fee, at least with regard to Medicaid specifically.

2. The gas tax is widely considered to be a declining revenue stream, as cars become more fuel-efficient and the number of miles driven by Americans is growing less quickly than in the past. I need to find some data, but I’d hazard a guess the cigarette tax will also decline in the long run as fewer and fewer people smoke. So, any plan that relies heavily on a gas tax and a cigarette tax really ought to contemplate, at least, how the state might create a future revenue stream to replace them — such as a tax on vehicle-miles traveled, or VMT.

3. The numbers I’ve heard for what a cigarette tax might produce is between $350 million and $450 million. While that’s a lot of money, it barely covers the annual increases to Medicaid, even without expanding the program under Obamacare. But even if every dollar of that represented a dollar that could be freed up for transportation, and even if some $700 million in existing gas-tax revenues were devoted to the Georgia DOT’s budget (some of which may overlap with the new cigarette-tax revenues) — even with all that, it would barely cover the unfunded maintenance needs state officials have outlined, such as not letting roads go decades more than intended before they are repaved. It wouldn’t seem to leave anything for “strategic transportation investments,” as Deal put it this morning.

Stay tuned.

Reader Comments 0

40 comments
LogicalDude
LogicalDude

" I support increasing funding for strategic transportation investments." - Deal


That's still a long way from providing leadership on this issue.  

The cigarette tax is, I suppose, one way to increase dollars, and it's popular to make cigarette more expensive.  How about legalizing marijuana and taxing the crap out of that too??


Increase the gas tax to a percentage of the price on top of the cents per gallon.  That way, if gas prices rise, gas tax revenue increases as well.  Since gas has dropped so significantly, I'd support a 2 cent gas tax for 2 years to help over-fund the backlog of transit needs, and have that drop a penny in two years unless gas prices are still under $3.00. 


I haven't seen recent analysis, but even if gas mileage keeps on getting better, more people are driving keeping the gas tax revenues increasing.  If that has changed, do you have a link to the plateau or decrease in revenues from the gas tax? (or is it still "probably in 2020-2013"?) 


Vehicles Miles Tax sounds like the long term solution after gas tax revenues plateau or decrease due to more hybrids and electrics on the roads.  Short term, you do not want to limit these, as the benefits to air quality gives healthy returns on that green investment. (Cleaner air means fewer dangerous air quality days in the summer, meaning fewer doctor visits for the young and old.)




Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude "I'd support a 2 cent gas tax for 2 years to help over-fund the backlog of transit needs, and have that drop a penny in two years unless gas prices are still under $3.00."

If you want to "over-fund the backlog," you're talking about something more like 15-20 cents/gallon, every year for the next 20-plus years ... and probably increasing over time to make up for inflation/efficiency gains.

Y'all criticize legislators for not facing up to the problem, but comments like this one make me question whether y'all understand the magnitude of what we're talking about.

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude If by "2 cent" and "penny" you meant a sales tax on gas, you're still not in the ballpark. If you meant a 2% sales tax on all goods for two years and 1% thereafter, you're still just getting to the point of covering what GDOT calls "needs," not "wants."

Just want everyone to be clear.

MHSmith
MHSmith

The hybrid and electric car joy ride is not far from ending. The gas tax is dying while the VMT is incubating. 


Just sayin'


Personally, my only concern over any so-called sin tax is that government use such taxes to pay for addiction intervention programs and all the adverse results these various addictions produce. 

Tobacco taxes should never have been used to finance government operations or education - aka Teddy boy Kennedy - pet peeve programs or projects etc. . They should be used to pay for  - at least some of - the medical bills and funeral costs for those who die as a result of COPD and the tobacco related cancers death.

Jefferson1776
Jefferson1776

Smokers are already paying thru the tobacco settlement money the state misuses.  What a bunch of yo yos.


There are plenty of unhealthy products to tax without piling on addicts.

Visual_Cortex
Visual_Cortex

I don't think we should be in any great hurry to impose a VMT, but it makes sense to have some plans in place so that we can make a transition to such a thing when we have large percentages of electric vehicles on the road.

For the next decade, though, gasoline powered private vehicles will remain the norm, and a gas tax increase is the logical revenue stream to fund needed projects.

notagain
notagain

I think most of us poor smoke more out of boredom.All the idle time sitting around waiting on our gov. check.

MarkVV
MarkVV

What few people apparently are willing to face is reality. Increased transportation funding is badly needed, that requires more revenues, and those “new revenues streams” are figments of imagination at best. Any such “stream” means a selectively applied burden, while transportation benefits everybody, and the burden of its funding should be shared by everybody.

PudHead
PudHead

Legalize weed and tax it like other smart states...

Visual_Cortex
Visual_Cortex

@PudHead

Agreed. It is no panacea, and we shouldn't overstate the direct economic benefits, but this is clearly the way the tide's turning so GA should not be on the sidelines.

332-206
332-206

Can't expand Medicaid 'cause Feds' payment agreements are unreliable.

Can fund transportation projects with cig and gas taxes 'cause these tax streams are expected to decline.


Oh wait...

Hedley_Lammar
Hedley_Lammar

A cigarette tax just puts it on the backs of poor people who cant afford it.


Terrible idea.


This is the classic example of something needing to be done but Republicans unwilling to fund it.





MHSmith
MHSmith

You are right on with this article, Kyle. In fact, you may have should have gone a bit further on the tobacco tax: It really doesn't begin to pay for the cancers it produces. Not to say government has ever use tobacco taxes to pay for healthcare because it hasn't.  


Nevertheless I'm glad to see the decline in sin taxes and as you know I've been an advocate of the VMT from day one I heard of it. People who worry about privacy concerns should realize they have very little of that left. If you think differently might I suggest you ask Gwinnett County DA Danny Porter about law enforcement use of ghost cell towers they use to track people.. - surprise!

MHSmith
MHSmith

No they don't but as I predicted around 10 years ago - when then on the subject matter of tobacco taxes - that there would be a "fat tax" or "Sugar Tax" imposed on products containing sugars - um...low and behold? :)

However, in the interest of serving honesty, in the case of type 2 diabetes the correct tax to impose would be a "carbohydrate tax" not just taxing sugars alone but starches as well. Our American diet is overloaded with carbohydrates and bad fats - no kinder way to say it.


Freedom of personal choice should not be overruled by personal responsibility and accountability. Government shouldn't have to tax any of us to correct our lack of responsibility and accountability for taking care of our own health but we as American society per se', have proven differently in far far far too too too many cases. So the sin tax imposed, for whatever be the sin, where it may be thought wrong, is right, when it is "SOLELY USED" to pay for at least some of the ill and harm done by the offense committed in as much as those monies can: BUT NOT FOR THE NON-RELATED ills or harms - or any other so-called "greater good" :( 

RafeHollister
RafeHollister

@MHSmith So, one more invasion of our privacy is all right?  When do we stop surrendering what little is left?

RoadScholar
RoadScholar

@MHSmith I thought that state law limited the use of cell tracking to vehicle travel times? This could equate to speeds, but...

MHSmith
MHSmith

@RoadScholar @Plumb Krazy @MHSmith 

You can find them in Berkeley, California. They succeeded where Mayor Bloomberg's attempt was struck down. Your follow libs aren't going to let one defeat stop them - bet on it. 


But I'm not going to lose any sleep when they do get a "sugar tax" "soda tax" or "carbohydrate tax" enacted nationally: Type 2 Diabetes and other bad diet related healthcare costs has to be paid for somehow. 

MHSmith
MHSmith

@RafeHollister @MHSmith 

Told you so, Rafe. You worried over nothing, government already has all the means it needs to track any of us. So tracking mere miles of travel and reporting that data is not such a big privacy issue - the government can do far worse already and you might, or would never know, what was done.    

Get ready to lose another freedom to those internet access taxes that I said would happen too. Just a matter of time. 

RafeHollister
RafeHollister

@MHSmith @RafeHollister I don't think being a turncoat or a cheerleader for the forces of darkness is the moral thing to do.  Rage, rage, against the dying of the light, a poet once said.

MHSmith
MHSmith

@RafeHollister @MHSmith Facts don't turn or have need to cheer. Those who adept to reality survive, those who don't are those who do the crying and the dying.


Just reading the hand writing on the wall - that's all.

IReportYouWhine
IReportYouWhine

The vast majority of smokers are the poor or low wage earners and I'm having hard time seeing how we can continue to hammer on them for revenue. It's cruel. The original idea behind high taxes on cigarettes and the like was to reduce the number of people using them. As usual, government was wrong about that. It's past time to explore new ideas on how to reduce tobacco usage and stop punishing the poor.

Hedley_Lammar
Hedley_Lammar

@IReportYouWhine http://www.cbpp.org/cms/?fa=view&id=3978


Actually they were dead on about cigarette taxes. The percentage of Americans who smoke are at all time lows.


I agree those taxes hurt the poor disproportionately. And as Kyle mentions with fewer people smoking each year its no long term solution.


Couple that with the fact we know higher taxes lead to fewer smokers and anyone can see that this is a bad idea. 



Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar "Couple that with the fact we know higher taxes lead to fewer smokers and anyone can see that this is a bad idea. "

So you're for more people smoking? Or are you just acknowledging that when you tax something (such as income) you get less of it?

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @HeadleyLamar 60 plus years ago 1 in 2 Americans smoked ( Back when big tobacco was denying it caused cancer. Big Energy is using that playbook today ala Climate Change ) today its 1 in 5


And its trending downward everyday. Several factors for this but cost is one of them. 


I think a pack of smokes in NYC is 15 bucks or so. That will make a lot of people quit. 


RoadScholar
RoadScholar

@IReportYouWhine "The vast majority of smokers are the poor or low wage earners.."


Think we should educate them of the effects and waste... and maybe that would lead to better paying jobs?

RoadScholar
RoadScholar

Good article Kyle and you read my comments on the VMT tax before. How/when do you collect it? Presently the gas tax is collected at the pump/tank farm. It is paid over time. But how do you ensure the hybrids and the electric cars pay there fair share? These vehicles add to congestion, and impact to our transportation facilities. Should it include a congestion tax, similar to the managed lane fees that fluctuate based on congestion? A yearly lump sum mirrors the birthday tax that was partially replaced with recent legislation.

Plumb Krazy
Plumb Krazy

@RoadScholar Why am I paying any share for fuel that goes into my lawnmowers, ATVs, boat motors etc? They dont even get on a highway or road. I know airplanes dont either but state and local taxpayers pay for runways and airports. And I know trains dont drive down the freeway either. But they block highways and are a pain in the rear where I live. Why dont they pay like I have to for my lawnmowers etc?

RoadScholar
RoadScholar

@Plumb Krazy @RoadScholar Those do pollute the air, eh? And there are costs for boating (DNR officers)  Do you use that much to cut your grass? You left out generators during power outages and other items. If you don't want to pay the tax....don't use them!


As for runways/airports, tickets are taxed to pay for air travel policing and facilities. Locally , local taxes are collected to spur business opportunities. Landing and control tower fees are also collected. The entire air traffic computer system does need to be replaced...about 50 year old technology being used!


Rail companies own their operating space...the states have easements to allow the roads to cross. Talk to the owners! Remember the railroads were there before cars were ever thought about.

Plumb Krazy
Plumb Krazy

@RoadScholar @Plumb Krazy Cost paid for boating is fishing license.  Statewide a whole  lot used to cut grass. Like a whole lot used by railroads airlines etc that dont pay up. The Indians and many private landowners were here before the railroads. If they dont want to pay fuel taxes then annex their tracks and let them build overpasses with their profits.

RoadScholar
RoadScholar

@Plumb Krazy @RoadScholar Fishing license is for fishing. Do you pay a dock fee? Who cleans up the lakes and streams after goobers leave their beer cans, cigarette filters, and plastic bags?

Plumb Krazy
Plumb Krazy

If the Republicans want revenue then let them undo the pandering they have been doing for the few. Tax movie making like the common man. Tax railroad and airline fuel just like the common man. Sales tax energy use for chamber nuts just like the common man has to pay. Do away with GATE cards the common man doesnt get. Other wise, from the Blue Ridge mountains to the Florida line!! From the currents of the Chattahoochee to the surf of the Atlantic! Ring the bells far and wide!!

TAX BABY TAX!!

The Republicans are coming!!The Republicans are coming!!

TAX BABY TAX!!