Week 6

The General Assembly is set to resume on Monday, February 24th for Day 27, until Wednesday, February 26th for Day 29, with Crossover day set for March 3rd.

This week erased the loss of days in the previous two weeks with a flurry of action on legislation in both Chambers. The Council was at the Capitol and voiced support and opposition on legislation important to Council Members.

In the House Budget and Fiscal Affairs Oversight Committee, the Council, along with other industry partners,  opposed  Rep. Matt Dollar’s HR 1239, which on the surface appeared to be legislation that sought to study and improve communication between local governments and development authorities and school boards and development authorities.

However, the Council has concerns that the legislation could be harmful to a system that has been successful statewide in allowing independence between local development authorities, school boards and local governments.  However, the legislation passed the Committee and now awaits its fate in the House Rules Committee.

Senate Bill 255, the “P3” legislation, which has previously been reported on  (see the 1.30/2014 Edition of Under the Gold Dome), sponsored by Senator Hunter Hill, saw unanimous passage in the Senate Transportation Committee and now moves to the Senate Rules Committee for consideration.

Council Member Georgia Concrete Paving Association and others hosted their ‘Georgia Concrete Products Day at the Capitol and it was a great success. The Association heard from Ga. DOT Commissioner Keith Golden, as well as DOT Board Member Johnny Floyd and  DOT Board Chairman Jay Shaw.   Additionally, noted economist from Mercer University, Dr. Roger Tutterow gave a presentation “On the Economical, Political, Business and Climate” which was very informative and can be foundHERE.  A congrats to the Association on a successful day at the Capitol.

Many pieces of legislation have been introduced this Session that seek to address our transportation issues in the Metro Region ,and allow a further conversation about the future of transportation funding and what the General Assembly can do to address the issue. After looking back at the 2012 TSPLOST failure, where do we go from here?

TRANSPORTATION AND METRO ATLANTA

After metro-Atlanta voters rejected TSPLOST, many called into question Atlanta’s future as the center of business for the Southeast. A year later, congestion still plagues daily commuters and Atlanta’s transportation infrastructure is still ill prepared for heavy use. While TSPLOST was a praiseworthy effort, its failure showed us that Atlanta’s infrastructure problem will not be solved by a single silver bullet. Members of the General Assembly continue to present legislation geared at solving Atlanta’s transportation crises, but no one is promoting an effort to understand why TSPLOST failed and how to overcome its failure.

TRANSPORTATION FUNDING SOURCES 

Why did Atlanta’s infrastructure fall behind growth? Over 90% of the Georgia Department of Transportation’s (“GDOT”) funds come from two sources: the Georgia’s Motor Fuel Tax (“MFT”) and the federal Highway Trust Fund (“HTF”). Neither of these sources has been able to keep up with the State’s growth and both have uncertain futures.

The MFT is a road-usage fee that can only be used to support the maintenance and construction of roads and highways. It is a tax that is added to gas purchases and is structured in a way that people who drive more pay more. However, people’s driving habits no longer correspond with their gas consumption because cars have better fuel economy and fewer people use cars. As a result, a tax tied to gas consumption no longer effectively functions as a usage fee for our roads and highways. Additionally, the MFT has become less effective as a fund supporting growth. In 2000, 49% of the MFT was used for planning and construction, while in 2014, only 22% will be used for new construction. The amount of the MFT that is used for debt services has steadily risen since 2000, and that number makes up over 40% of the MFT’s use today. Couple this with the fact that only 75% of the tax goes to GDOT, the picture becomes clear. The methods by which the city supported growth in the past are no longer effective.

The second primary source of funding for the Georgia Department of Transportation is the HTF. The federal government distributes the HTF for the purpose of maintaining and improving interstate highways and, like the Georgia MFT, the HTF is funded by a motor fuel tax. Unlike the MFT in Georgia, , the HTF is a flat tax on gas purchases across the nation. As one could deduce, the HTF suffers from the same woes as the Georgia MFT, and recent trends in gas consumption have affected its growth. Like the Georgia MFT, the HTF is becoming obsolete. Ultimately, Atlanta’s current sources of funding for infrastructure construction are insufficient for our level of growth and our leadership will need to be forward thinking if we are going to avoid setbacks arising from a poor transportation infrastructure.

 A GLIMPSE AT A FEW TRANSPORTATION BILLS IN THE GENERAL ASSEMBLY 

Currently, the Council is tracking four bills in the General Assembly that are attempting to catalyze some transportation reform. HB 195 and HB 955 present different methods by which the public may fund transportation projects, and HB 648 seeks to reallocate the one-cent sales tax to divert more funding to the Georgia Department of Transportation. SB 90 attempts to lay the groundwork for more public-private partnerships in the area of transportation.

HB 195 calls for the creation of special districts, which may be formed by two or more contiguous counties, for the purpose of creating a special district transportation sales and use tax. The creation of the district would be subject to the requirements of a referendum and the tax could not be greater than 1%. The funds raised by the tax could only be used to fund projects on an “investment list,” developed collaboratively by affected local governments and the State. The bill would essentially create a method by which local officials could align with officials of neighboring counties to establish a minimal tax for the support of local transportation projects.

HB 955 will add a restriction to the current sale and use tax already in effect within the State by limiting the use of the funds collected from prepaid local taxes to the jurisdiction within which the tax was collected. A “prepaid local tax” is a tax collected from the use of motor fuel within a specific area within the State. Currently the use of funds collected from “prepaid local taxes” is not limited. This bill will limit the use of the funds collected from motor fuel so that they could only be used for the maintenance of roads and bridges within the jurisdiction of the tax.

HB 648, sponsored by Representative Brett Harrell (R), seeks to reallocate funds from the one-cent sales tax in order to increase funding for transportation projects in Georgia. Currently, 3 of the 4 cents of the Georgia state sales tax is reinvested into transportation by the Georgia Department of Transportation (DOT), while the remaining cent goes into the General Fund. This legislation would have 1/4 cent of that additional one cent tax be returned to the Georgia DOT starting in 2016. This reallocation would end in 2020 when the full cent is collected by the Georgia DOT.

SB 90 requires regional and local transportation authorities to periodically submit reports regarding public-private partnerships on transportation to the Governor’s Development Council. The reports required by the bill would have to include areas for collaboration between the State and private parties, impediments to collaboration, and how to overcome any obstruction. The Governor’s Development Council would then deliver to the Georgia Coordinating Committee for Rural and Human Services Transportation a report on public-private partnerships based on the information gathered. While this bill does not directly address issues of funding transportation, it attempts to concentrate information that could bring a long-term solution to the infrastructure problem.

A PIECE-MEAL APPROACH OR A COMPREHENSIVE VIEW? 

Instead of suggesting a single omnibus legislation like TSPLOST, legislators are now attempting to address the State’s infrastructure problem in a piece-meal fashion. While this approach suggests that various solutions will be brought to the table to deal with problems, this approach accomplishes too little too slowly. A systematic solution employing various tools may be the only solution, but little has been done to learn from the failures of TSPLOST. Before a comprehensive approach with diverse solutions for our diverse regions can be reached, the problem will have to be studied.

A transportation funding study committee seeking a comprehensive solution that employs a highly localized approach may be the strongest option, and it appears that one may be on the horizon.

The Council will continue to track transportation-oriented legislation and will keep its subscribers abreast of progress in the sector.