What the House transportation plan got right

Credit: Vivian Hansen / SCAD-Atlanta

Credit: Vivian Hansen / SCAD-Atlanta

Credit: Vivian Hansen / SCAD-Atlanta

Two comments dominated reactions to the transportation-funding plan House leaders unveiled Wednesday:

“It’s better than I expected.” And:

“I wonder what it’ll look like in the end?”

The best way to think about the House plan to increase spending on roads, bridges and transit by $1 billion a year is as an opening bid in negotiations still under way. Senators expressed skepticism about the way local governments would be affected (so did a number of House members). The governor’s official reaction was notable for its lack of enthusiasm.

Several people wondered why legislators would spend a year talking up the need to spend more on transportation infrastructure, only to settle for a plan that wouldn’t generate enough money to tackle such big, critical projects as reworking the top end of I-285 and adding capacity to interstates outside the region.

All that said, the House plan delivers on a few key principles the bill ought to retain as it evolves.

1. Gas taxes should be spent on transportation. The state currently diverts about $180 million per year in gas taxes to the general fund, where it is spent on all sorts of things besides transportation. The House plan returns that money to its rightful destination.

Local sales taxes on motor fuel, especially when they are collected as SPLOSTs or as E-SPLOSTs for schools, also are too often spent on other things. Cities and school boards in particular are complaining they would lose a revenue source under this plan. Here’s another way to look at it: Some of them have been misusing that revenue source for a long time.

The gas tax is the closest thing we have to a true user fee. Lawmakers at every level of government should treat it — all of it — that way.

2. Gas taxes should be collected as excise taxes, not sales taxes. The reason some of our gas taxes go to the general fund is they are levied as sales taxes on motor fuel, and only excise taxes on motor fuel are constitutionally tabbed for roads and bridges. Converting the entire levy to an excise tax would prevent future lawmakers from siphoning off motor-fuel revenues for other purposes. It also should make for a more predictable revenue stream which can be adjusted more easily to account for inflation and higher fuel efficiency.

3. Transportation is a priority for the state, and the budget should reflect as much. State revenues are rising, and it is entirely appropriate that some of this increase go toward one of the state’s top priorities.

That includes the bond portion of the budget, which is how the state funds many capital projects. While these typically are buildings, there’s ample reason to include bridges, roads and even transit infrastructure. Note I said transit infrastructure; the most sound use of borrowed money is for capital projects that will deliver benefits for years, not for one-time subsidies for operations.

4. All motorists should contribute to infrastructure, regardless of the type of vehicle they drive. Electric vehicles use the same roads and bridges gas-powered cars and trucks use. They ought to pay into the system.

Reader Comments 0

39 comments
MHSmith
MHSmith

The VMT is a "fee for use". It is as equitable as a tax can possibly be. If don't like the mileage tax, then drive less miles or down size your vehicle or use mass transit or move closer to where you travel the most. The days of some people "dodging payment" of their rightful share of taxes for road infrastructure are going bye-bye.


The "future"... safe to say, is a MATTER of right now in the states of California, Washington and Oregon.

Including other in-the-process states like North Carolina and Minnesota looking to follow, and dare not forget the Congress itself, where the idea of a national VMT had some real traction only to be drowned out by  the rural whimpering cries of those who bellyached and pouted over losings their "TAX DODGE"...  B'whaaaaaaaaaaaaaaaaha... we have to drive long distances to get around here in Bum-Fud Green Acres, unlike those city folk.


Whether the VMT is collected using Kyle's annual method (a certified annual odometer check in order to get a  tag, which is probably the most cost efficient option to employ) or the more involved in the "near real time" method of reporting as the miles are driven, which enhances cash flow but probably is not as efficient as the once a year method, though, less painfully noticed and more manageable by the average person to pay as they go rather than being hit with a big end of year lump sum tax. Whatever the means and methods used, a VMT funding of our roads is very likely a done deal. 



This is one time the Libertarians got it right with their idea of a "user fee tax".




One thing for sure, the education crowd and the misappropriating pet peeve slush fund bunch can say farewell to their penny sales tax from fuel they are so fond of receiving. - LOL!!

lvg
lvg

Kyle - You know those clowns under the gold dome are more concerned about religious freedom bill than  Atlanta's transportation problems. Wait until some Muslims use that bill to say they object to using our courts to resolve disputes, divorce and probate matters for religious grounds and state they will only obey decisions decided under Muslim or Sharia law. Jews already have that right in Georgia to have a rabbinic court arbitrate disputes. But nothing like a bunch of Georgia Baptists to shove their values in your face.

Jefferson1776
Jefferson1776

Paving contractors are stealing from their customers.

Claver
Claver

On the issue of increasing transportation spending by $1 billion, will the entire $1 billion be an actual increase or is some of it slight of hand?  For example, instead of going to the General fund, the 4th penny will now go to transportation.  That is good; but, was any money in the General fund going to transportation already and, if so, will that amount now go away?  Second, were the cities spending some of the money on transportation already?  If they were, then, at least for that portion, it is not really an increase for the state to take it and spend it on transportation too.

Kyle_Wingfield
Kyle_Wingfield moderator

@Claver There's currently about $12M in the FY2016 general fund budget for transportation. No indication yet that that would change. (The vast majority of GDOT's budget comes from existing motor-fuel revenues, ~$900M.)

As for whether cities are spending on transportation already: I haven't seen budget figures for every one of them, but generally speaking that's more of a county thing. How much of the $1B will be a true increase will probably depend on the final bill, but at this point I'd say it's a majority.

Plumb Krazy
Plumb Krazy

Dont forget this is  not just a tax increase now but a forever tax increase as the excise tax rate will go up every year along with inflation. 29 cents now will likely be 39 cents in a decade. Why dont republicans tie state wages to inflation too then if its a good idea?

Plumb Krazy
Plumb Krazy

How about taxing bicycles and tennis shoes using roads? How kooks gonna tax that?

MarkVV
MarkVV

A VMT is a natural revenue as a part of the transportation funding, but it is a matter of future. At this time the revenue from its application to electric cars would be miniscule, and the harping at the “dodge” is just an expression of the denial of some that new technologies often need a support.

Finn-McCool
Finn-McCool

How would you go about taxing electric vehicles? Meters on recharge equipment?

Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar Well, at the moment we encourage people to buy electric vehicles to the tune of $5,000 apiece.

MHSmith
MHSmith

@Kyle_Wingfield @Finn-McCool 

How about a Vehicle Mileage Tax? Everybody pays for every mile they travel according to the weight of the vehicle they drive. 


Before someone drags up the usual worthless arguments against the VMT e.g. Concerns over privacy and technical viability, those are pure nonsense. If you have a cell phone in use most of the time - like most of us do - then you have very little privacy whether you like it or not or know it or not; and when that cell phone of yours is on, wherever you go is being recorded. Oh, of course, I know you'll just turn the cell phone off, right?


Think that will beat the system? Think again, the fix for that trick is very easy for government to implement.



Kyle_Wingfield
Kyle_Wingfield moderator

@MHSmith I think that is the future, but it's not going to happen overnight. There are ways to do it without privacy concerns, too.

Kyle_Wingfield
Kyle_Wingfield moderator

@Nick_Danger Is your privacy compromised if there's an option to pay a flat fee instead of calculating your actual mileage? That kind of option is a staple of these discussions. As I said, there are ways to implement such a system that avoid privacy concerns.

Plumb Krazy
Plumb Krazy

Yes, tax baby tax! Its fine to tax baby tax when Republicans tax. Spend baby spend! Its fine to spend when Republicans spend baby spend. Steal from local governments. Yes steal baby steal. Republicans like BIG GOVERNMENT as long as they are in control of it. Local governments wouldnt need fuel taxes for general revenue if the Republicans in the state capital would stop pandering. Pander baby pander!! to airlines, railroads, farmers, deadbeat corps, billionaires, etc TAX BABY TAX THE COMMON MAN SOME MORE!! THROW THE BUMS OUT!

Jefferson1776
Jefferson1776

Only a wishful fool would think the needs don't require NEW taxes, in addition to the current ones.

LogicalDude
LogicalDude

" collected as SPLOSTs or as E-SPLOSTs for schools, also are too often spent on other things."

Well, if they are SPECIAL taxes, then they should be spend the way voters voted those SPECIAL taxes in the first place.  The state taking SPECIAL taxes, when applied to motor fuel, is basically making an end run around what voters voted for in the special tax schemes that counties are allowed to make. 


Transportation is a priority for the state, and the budget should reflect as much.

And the state should have the priority to raise *new, dedicated* funding for transportation.  If they move taxes from local entites to transit, then the state should work with those local entities to retain their funds.  Otherwise, the state is playing cups and balls with tax money, basically making local entities suffer as a result. 


Electric cars:  There is a balance between "making them pay" and "keep Georgia clean" funds. If Georgia is at risk of losing federal funds for smog alert days, then keep electric car rebates and no extra taxes.  Once Georgia reaches the point of reliably clean air each year, then those incentives can be removed, and taxes allotted to Electric Car registrations and renewals.

Hey, it's good Georgia is actually taking steps to direct funds to transit, however, most of the steps are moving current funds instead of actually increasing funds. 

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude "Well, if they are SPECIAL taxes, then they should be spend the way voters voted those SPECIAL taxes in the first place."

And they will go to those purposes, until those taxes expire. If and when a new SPLOST is put on the ballot, it will either be with a smaller tax base (no motor fuel) or with an additional 3 cents/gallon excise (to include motor fuel, but those proceeds would have to be spent on some loosely defined "transportation" purpose).


LogicalDude
LogicalDude

@Kyle_Wingfield @LogicalDude That's a little better, but still, this is the situation where the State cannot come to grips with REALLY finding dedicated funds for transit without taking it from another area (in this case, local entities). 

I like that they are coming to grips with the need for funding, but taking it from other areas of the state is still irresponsible. 

FlatticusInch
FlatticusInch

Is the proposed new tax on electric vehicles or alternative-fuel vehicles?

MHSmith
MHSmith

"All motorists" should contribute to infrastructure, "regardless of the type of vehicle they drive". Electric vehicles use the same roads and bridges gas-powered cars and trucks use. They ought to pay into the system.

Enjoy your tax dodge while you can LP, Hybrid and Electric vehicle owners, eventually a VMT will even up the score. That is, when these legislators really do come to their senses!

JohnnyReb
JohnnyReb

re, #4

Agreed.  A tree hugger commented in the editorial section of yesterday's hardcopy that electric, etc. car owners should be exempt from road fees.  His argument based on protecting the environment, etc.

His thought processes are indicative of why that group is dangerous.

Unfortunately, they appear to have Obama in their pocket. 

Plumb Krazy
Plumb Krazy

@JohnnyReb Its no crazier than chamber nuts not having to pay sales taxes on their electric bills and the rest of us having to.

MarkVV
MarkVV

Kyle’s arguments are contradictory. First, the state does not currently “divert” or “siphon” $180 million per year in gas taxes to the general fund. Because the current tax is in part an excise tax and in part sales tax, there is no principal reason why the sales tax on gasoline should be treated differently than other commodities subject to sale taxes, which go into the general fund. On the other hand if, as Kyle suggests, all gas tax should be treated as excise tax, gasoline would be placed in a special position of a commodity not subject to sales tax. To justify lowering the revenues available to cities and school boards because “some of them have been misusing that revenue source for a long time” is a cheap shot, which could be used just about anywhere revenues are used.

Wascatlady
Wascatlady

It is like a whole lot of other fees Georgia collects, that have been robbed for other sources, such as the specialty tag fee, or the used tire fee.  Georgia's legislature and leaders just LOVE to get hold of that "extra" money and divert it.  I don't trust them a bit.

FIGMO2
FIGMO2

Local sales taxes on motor fuel, especially when they are collected as SPLOSTs or as E-SPLOSTs for schools, also are too often spent on other things. Cities and school boards in particular are complaining they would lose a revenue source under this plan. Here’s another way to look at it: Some of them have been misusing that revenue source for a long time.

And yet, Clayton County voters vote to extend the perpetual money grab. The one-time one percent is never enough.

Go figure! 

HeadleyLamar
HeadleyLamar

Electric vehicles use the same roads and bridges gas-powered cars and trucks use. They ought to pay into the system.


Disagree


As was mentioned they don't wear the roads the same as other vehicles and people should have incentives to drive electric cars.


Best guess is this was the climate change denying crowd thumbing their nose at environmentalists. It can't be about the revenue. 

Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar If you saw the earlier mention about wear and tear, then surely you saw my response about commercial vehicles.

Kyle_Wingfield
Kyle_Wingfield moderator

A reader noted on Twitter that another point belongs on the list: indexing the excise tax to fuel-efficiency standards and inflation to ensure buying power remains constant. I agree, that's another key element of the bill. Had that been in place the past 30 years, we wouldn't be having this conversation now.

Visual_Cortex
Visual_Cortex

All-electric vehicles account for such a teensy percentage of actual miles (and an even teensier percentage of road wear, given their literally small footprints) I'm not sure why this is even an issue, or why it merits a separate number-item in your list.

But I'm glad to see they came to their senses and removed hybrids from the legislation, apparently.

Kyle_Wingfield
Kyle_Wingfield moderator

@Visual_Cortex "I'm not sure why this is even an issue, or why it merits a separate number-item in your list"

You're forgetting about commercial vehicles. There are lots of those on the road -- they'll account for most of the new revenue generated with that fee. (They pay $300 apiece.)

Admittedly, I should have made that more explicit in the post.

bu2
bu2

@Visual_Cortex @Kyle_Wingfield 

And the share is growing.  Now is the time to deal with it, not waiting until they are 10% o the cars on the road.

Kyle_Wingfield
Kyle_Wingfield moderator

@bu2 Right, at which point they'd become just another special-interest group protecting its turf.

IReportYouWhine
IReportYouWhine

It figures, you get a ballot referendum passed to fund transportation and the government uses the money to shower it on special interests that have nothing to do with transportation. I should have known.