We’ve been hearing so long about the need for Georgia to spend more money on transportation infrastructure that it may be hard to judge the impact and sufficiency of the bill approved Tuesday night by the House and Senate.
So know this: The $900 million spending measure roughly doubles the state portion of our transportation spending. Including federal money, the Georgia DOT budget will be about 50 percent bigger.
By any measure, that’s a huge step forward. Decades of under-funding — gas-tax revenues have been falling as a share of the state economy since at least the 1980s — may have left a larger hole to fill, depending on who you ask. But even if the need is closer to, say, $2 billion a year, there is nothing wrong with taking one large step such as this and then waiting for the dust to settle before going further.
And in fact, the amount raised by Tuesday’s bill could be substantially more than $900 million. The final text of House Bill 170 included a provision to allow counties, particularly in metro Atlanta, to levy their own version of the T-SPLOST that failed here in 2012. That measure, in this region, was projected to raise about $8 billion over 10 years. Depending on which counties get voter approval for such a tax, and how much of a sales tax they levy (the bill allows for a fractional tax, in 0.05 percent increments, up to 1 percent per county), that provision could generate hundreds of millions of dollars a year more.
And for those who ask about transit, part of the compromise between GOP leadership and Democrats was an addition to this year’s MARTA bill. House Bill 213 includes a clause allowing MARTA counties to raise their sales tax to 1.5 percent. If done across all three counties currently served by the agency, that could bring another $200 million a year. Transit advocates might have wanted more of a statewide funding mechanism, but that kind of money for one agency simply wasn’t going to come from this General Assembly this year. That provision plus $75 million in bonds for transit agencies, like the transportation measure overall, should be seen by advocates as a very large step forward.
But enough about the “how much.” What about the “how”?
This bill represents a sizable tax increase. There’s no getting around that. Some legislators who voted against the measure even deemed it the largest tax increase in state history. And while I haven’t seen verification for that claim, it wouldn’t surprise me. But then, that was going to be difficult to avoid when legislators have spent the better part of 30 years avoiding smaller steps that could have prevented this debate in the first place. Here are the basics:
1. The key component of the bill is an increase in the state (not local) portion of the gas tax. From a current level of about 19.3 cents/gallon, the tax would rise to 26 cents/gallon. For diesel, add about 3 cents to both the present and future numbers. At roughly $60 million per cent of tax, that would raise something like $400 million. The conversion to a pure excise tax also shifts the so-called fourth penny, worth about $180 million of current revenues from the general fund to transportation.
2. The tax rate is indexed to fuel efficiency and, for the first two years, inflation. I’m told that’s expected to raise the tax rate by about 1 cent ($60 million) each of the first two years and about half a cent per year ($30 million) after that.
3. The bill, out of nowhere, establishes a new $5/night tax on hotel/motel stays. That’s estimated to raise $150 million to $180 million per year depending on occupancy rates. A Senate plan to tax car rentals at a similar rate was discarded.
4. The jet-fuel (“Delta”) tax exemption goes away, adding about $23 million per year.
5. The electric-vehicle tax credit of $5,000 goes away, adding about $45 million per year.
6. Electric vehicles will be assessed an annual fee: $200/year for passenger vehicles, $300/year for commercial vehicles. That’s supposed to raise something like $2 million/year initially, rising to $10-12 million/year by 2020.
7. A “highway impact fee” will be added for heavy trucks that cause the most wear and tear on roads: $50/year for trucks weighing 15,500 lbs. to 26,000 lbs., and $100/year for trucks heavier than 26,000 lbs. That’s expected to raise some $50 million/year or more.
8. The bill also allows counties within the GRTA service area (or MARTA, but the areas overlap) to raise their own version of the T-SPLOST metro Atlanta voters rejected in 2012. If they do, they must devote at least 30 percent of the funds to projects on the State Transportation Improvement Plan. Depending on which counties do that, this provision could raise hundreds of millions of dollars per year.
Could I have drafted a bill I liked better? Sure. But on the whole, I think this is a reasonable way to address what has for too long been neglected as a priority.