Georgia drivers will cough up about 7 cents a gallon more in gas tax to help pay for bigger and better roads under this year’s transportation bill. But the squeakiest wheels so far concern comparatively small provisions.
One complaint is that the removal of a tax exemption for jet fuel was motivated more by political revenge against Delta Air Lines and its outspoken chief executive, Richard Anderson, than by money. This line of thinking was exemplified in a column last week by longtime Atlanta business journalist Maria Saporta, who wrote in part:
“The estimated $20 million in new jet fuel taxes (Delta’s share likely would be about $16 million of that) that will be collected will NOT go towards solving our transportation problems. It is mandated by federal law that the revenue has to go to fund airports …. Since it emerged from bankruptcy in 2007, Delta has added 6,500 jobs in Georgia. How much in tax credits would Georgia pay a new company adding that many jobs? Think about the $23 million in incentives the state gave to Mercedes Benz USA for just 800 jobs.”
There’s no doubt lawmakers’ hides were chapped by a variety of comments made by Anderson, most notably his warning last fall that they not “get chicken” about raising taxes for transportation. But the it’s-all-politics view, shared by others, glosses over a few big things.
Let’s start with the fact the Georgia DOT puts the annual cost of maintaining airfield pavement at $30 million a year. The agency also has a five-year airport capital improvement plan that requires $18.6 million in state funds each year. Yet, for 2015, GDOT budgeted only $10.6 million for airport aid. It can spend the new money and still be millions short.
Then there’s the comparison of Mercedes’ subsidies to Delta’s. The $23 million in state incentives for Mercedes are comparable to one year’s worth of the jet-fuel tax break. But that exemption is almost a decade old. Since 2010, the exemption has saved airlines $141 million; Delta got the lion’s share.
What’s more, the bulk of the incentives for Mercedes were statutory tax credits for job creation which are also available to Delta. While I haven’t determined if Delta actually claimed any of these credits, the company may have been entitled to far more than Mercedes got.
If Delta added all 6,500 jobs at its Fulton County headquarters, and if they all qualified for the state’s basic tax credit, the company could have claimed almost $57 million. If they were all added at the airport (in Clayton County) the figure would have reached $130 million.
Yes, the state made a big pile of money available to Delta over the years. Maybe that was the right thing to do then. Maybe it still is. But I’ll say this: Big piles of money practically leap off the spreadsheet at lawmakers scrounging around for $1 billion.
A quick story: Last week, I recapped the session at a meeting of the Walton County GOP. While discussing the transportation bill, I rounded off the jet-fuel figure at $20 million. A legislator in the crowd immediately corrected me: “Kyle, it was actually twenty-three million.”
Maybe it was about the money.