The verdict on the transportation bill

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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.

Reader Comments 0

25 comments
Eldon Tyrell
Eldon Tyrell

WOW!!!  900 to 1 billion dollar tax increase passed by people who pledged no tax increase, and affiliated with a party which believes that lower taxes increases revenue.  But Wait, there's more!

If we want more mass transit, impacted counties can increase consumption taxes (the most regressive kind) an additional 1.5%!  But wait, there's more!

Our Southern Hospitality will cost an additional $5.00 a night!  But Wait, there's even More!!!

We have to trust our tax and spend legislature to spend this billion or so wisely, as opposed to knowing what they will spend it on before the taxes were increased.  Perhaps a bridge over the 285 to help out the Cobb County Braves Stadium?

And we still have 159 counties in GA.  Second only to Texas. 

And where is the outraged opposition to this?  Sounds pretty quiet out there ...

Lukasatl
Lukasatl

Just great. The wise leaders in the Ga state legislature just increased the cost of doing business for any and every business in the state of Georgia. Do these wise men not understand that the truck tax will be passed on to every consumer in the state in the form of increased prices?

GeorgeChidi
GeorgeChidi

@Lukasatl As though these trucks aren't already passing on the cost of congestion to consumers.


Hedley_Lammar
Hedley_Lammar

@Lukasatl How are trucks going to get into Georgia without roads. ?


Those dont just happen because we wish them to. 

FlatticusInch
FlatticusInch

What about natural gas vehicles? At one time, the proposed annual fee applied to them also.

FlatticusInch
FlatticusInch

@Kyle_Wingfield 

If I am reading this correctly, natural gas vehicles get a pass.


157 SECTION 3-2.
158 Said title is further amended by adding a new paragraph to subsection (a) of Code Section
159 40-2-151, relating to the annual license fees for the operation of vehicles, to read as follows:
160 "(19)(A)(i) Upon registration of an alternative fueled vehicle not operated
161 for commercial purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200.00
162 (ii) Upon registration of an alternative fueled vehicle operated for
163 commercial purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300.00
LC 34 4702S
- 6 -
164 (B)(i) As used in this paragraph, the term 'alternative fueled vehicle' shall have the
165 same meaning as in division (l)(7)(B)(ii) of Code Section 40-2-86.1; provided,
166 however, that the fees in this paragraph shall not be assessed on vehicles which
167 operate primarily on compressed natural gas, liquefied natural gas, or liquefied
168 petroleum gas.

FlatticusInch
FlatticusInch

@Kyle_Wingfield, I see the definition of alternate fuel includes electricity, natural gas and propane. But then what is this saying:

"however, that the fees in this paragraph shall NOT be assessed on vehicles which operate primarily on compressed natural gas, liquefied natural gas, or liquefied petroleum gas"


LogicalDude
LogicalDude

"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."


Or any year in the past. . . ohhhh. . . 30 years. 

One would think that a significant move to fund transportation would at least make a state nod toward MARTA, but nope. Not today.  

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude The 1.5% thing on the sales tax is not nothing. And the revenues from the hotel tax and even the heavy-trucks tax are not limited to roads and bridges; those provisions specifically include public transit as a legitimate transportation purpose. That's roughly 20% of the bill's revenue that legally can be spent on transit. That's pretty significant IMO.

LogicalDude
LogicalDude

"The bill, out of nowhere, establishes a new $5/night tax on hotel/motel stays"


The current theory is that the critics of the RFRA bill were the recipients of this $5/night tax.  It was a way for Legislators to "punish" opponents to a totally separate bill. 


RafeHollister
RafeHollister

@LogicalDude I'd say it is a way to make tourists and truckers pay a small amount for use of Georgia's roads.  You would pay a much higher hotel/motel tax in other states.  And in Georgia they skip all those tolls they pay in FL.

332-206
332-206

"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."


Because side stepping SB129 depleted all the courage they had for this session...


332-206
332-206

@Kyle_Wingfield @332-206

Gee, I don't know. Beyond regressive, if Fulton chooses to do the full 1.5%, what would the total sales tax be for a pack of cigarettes in Fulton? For a visitor to spend a week at an in town hotel for a WCC event, we're getting pretty pricey.

pgx31069
pgx31069

The math on the EV fee of $200 is insanely wrong.  Basically it assumes that every EV is driving 70-80 miles per day every day.  Considering the max range is ~90 miles that is patently absurd.  Would have much preferred either a more reasonable number to reflect the true usage of roads or even a yearly bill based on the actual miles driven.  The number just seems punitive as though they couldn't bear the thought of people trying to free themselves of (generally) rising gas prices.

The tax break probably needed to go though - it served its purpose.  I'm afraid that with the new registration fee it will help to tilt the equation back in favor of gas vehicles.

Yay for transit and hopefully allowing localities some control over their own destiny.

RafeHollister
RafeHollister

@pgx31069 Well as you proggies always say, they can afford it.  It's progressive taxation, I thought you guys liked that.  Only rich folks can indulge themselves with a toy car that is tethered by a cord.



Visual_Cortex
Visual_Cortex

@RafeHollister @pgx31069

Either they were serious about approximating the revenue that would've been collected had the drivers chosen conventional vehicles, or they weren't. Looks like they weren't.

That's the point here.

Whether you think such things are "toys" are not ought to be immaterial.

Visual_Cortex
Visual_Cortex

@pgx31069

Basically it assumes that every EV is driving 70-80 miles per day every day

yeah, let's see... .26 goes into 200 769 times, if a typical EV could be said to emulate a subcompact getting 35 mpg, the assumption is the car's going to average nearly 27K miles per year.

Gratuitous swipe at the greenies, looks like.

IReportYouWhine#1
IReportYouWhine#1

It looks like Delta wasn't lying about the disparate economic impact that the RFRA would have, although I doubt they were talking about their own bottom line.

332-206
332-206

Extra $5 bucks to spend a night in Georgia.

Welcome South, Brother! 

RafeHollister
RafeHollister

It sounds reasonable.  There are things that will agitate most people regardless of political philosophy, so you know it is balanced.  A growing economy will increase the amount raised for transit, and hopefully we will elect a President and Congress in 2016 that will focus on things to grow our economy, instead of our government, for a change.