Not about the money? Not sure I buy that

AJC Photo / John Spink

AJC Photo / John Spink

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.

Reader Comments 0

19 comments
RafeHollister
RafeHollister

I don't get the uproar, why shouldn't Delta pay more in taxes, especially when the Chairman encouraged the legislature to go big on the tax increases?   Only proggies always expect someone else to pay the new taxes. A barking dog usually gets some attention, often attention he doesn't want. 

332-206
332-206

Gotta love a legislator who can count.

independentiii
independentiii

No way this wasn't political payback - but I think a large part of it is by a certain Paulding County politician who didn't like Delta's disagreement over the airport 'expansion' and the county perks given to Propeller.  Wonder if that politician might have had a hand in the cookie jar...

Kyle_Wingfield
Kyle_Wingfield moderator

@HeadleyLamar He isn't in the Legislature. And I seriously doubt he has the kind of pull to get both chambers to go against a major company like Delta.

IReportYouWhine#1
IReportYouWhine#1

Since we've already drifted away from Delta's tax credit and expanded it to all of capitalism, what is MARTA's cost per year to the taxpayers, Kyle?

LogicalDude
LogicalDude

Yes, it was about the money.  Legislators were doing everything they could to "fund transit" to a level they were told would bring Georgia into the 21st century (finally). 

Delta made it easy on the legislators to target the fuel credits. 

Not sure if anyone has satisfactorily explained the $5 per night hotel tax/fee, though.  It sounds way too much like political payback from the failure of the "religious liberty" debate. 


I disagreed with the EV tax credit removal, since that actually helps maintain federal funds by lowering the amount of red alert smog days in the summer. 

Some tax breaks based on actual jobs are good for the state too.   Income into state coffers comes in other forms (whether it is based on income tax of those workers or spending by those workers.)   Other incentives over and above jobs are suspect, but if growth in some sectors result, it seems to be good for the state, such as the film credits that have made the Atlanta area the Hollywood of the Southeast. 


Wascatlady
Wascatlady

@LogicalDude They will just give that income away in the form of tax breaks for the connected/donors.

Wascatlady
Wascatlady

Gulfstream's tax break is ridiculous.  As is the one for the private college in North Georgia.  And we can go on and on.


Hey!  I want a special tax break, too! Gimme a minute and I will think of a "reason" why!

Nobody_Knows
Nobody_Knows

@HeadleyLamar


Did Gulf Stream executives speak out against the RFRA?  

I think Delta had plenty to say over the last two years. 

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @Nobody_Knows  I can tell you that the reaction to Delta's RFRA comments, as far as legislators go, paled in comparison to Anderson telling them not to "get chicken" about raising taxes for transportation


Pretty thin skinned if that was indeed the reason.

Kyle_Wingfield
Kyle_Wingfield moderator

@Nobody_Knows I can tell you that the reaction to Delta's RFRA comments, as far as legislators go, paled in comparison to Anderson telling them not to "get chicken" about raising taxes for transportation -- while banking one of the largest tax breaks in the state. I noted this obvious hypocrisy before the session even began, much less the proposal to remove the tax break: http://kylewingfield.blog.ajc.com/2014/12/08/on-transportation-funding-just-be-honest-with-georgians/


straker
straker

"big piles of money practically leap off the spreadsheet at lawmakers"


On that you can ALWAYS rely.