GDOT official: Georgia needs another stream of revenue
By SARAH FAY CAMPBELL
sarah@newnan.com
Whether it’s from passage of the proposed regional one percent Transportation Special Purpose Local Option Sales Tax, or something else entirely, Georgia needs another revenue stream in order to fund transportation projects, says Todd Long, deputy commissioner of the Georgia Department of Transportation.
Currently, transportation needs in Georgia are paid for with a mix of federal, state and local funding, most of which comes from taxes on gasoline. Local governments pay for their own projects through sales taxes and their general funds.
About 30 years ago, the state added a sales tax to gasoline. There is a 4 percent sales tax on gasoline, calculated twice a year based on the price of gas at the time. Of that 4 percent tax, 3 percent goes to the GDOT, with the remaining 1 percent going to the state’s general fund.
If the TSPLOST is approved, it won’t be applied to gasoline.
As people buy more fuel- efficient vehicles, they use less gas, he said.
“Every commercial you see on television is about the efficiency of vehicles,” said Long. “So we know that is going in the wrong direction for bringing in revenue.”
Even though the higher price of gasoline increases the sales tax revenue, it isn’t enough to make up for the increase in efficiency and provide for growth.
“Basically, for us, it is a static level of income,” Long said.
“We think the revenue stream under the current system is going to be pretty flat in the coming years,” Long said. “So the revenue stream we have today is not growing with our growing population and growing demands. So we need to figure out a different way to fund it.”
The Georgia General Assembly had looked at raising the tax on gasoline, Long said. “But if you raise the gas tax, say, 25 percent, and the efficiency goes up 25 percent in a five-year period, it is a wash.”
The General Assembly has been working for years on a new funding mechanism for transportation.
“It took them three different sessions to come up with” the current TPLOST proposal, officially known as the Transportation Investment Act of 2010.
“They had a statewide plan, a county-by-county plan. Finally they decided to do this regional approach, so that is where we are today,” Long said. “We said we want it to be transparent.” That’s why the GDOT director of planning was involved.
Long was originally director of planning but is now deputy commissioner.
Long said GDOT has put together a webpage with frequently-asked questions about the TSPLOST — http://www.dot.state.ga.us/localgovernment/FundingPrograms/transreferendum/Pages/FAQ.aspx.
“Honestly, our role in this was just to kind of help facilitate the process, which we did,” Long said. “Now, certainly, we’re not in a role of advocacy.” Instead, GODT’s role is “making sure everybody understands what happened.”
Long addressed some accusations made against the TSPLOST and the Georgia Department of Transportation.
“As far as the constitutionality” of the TSPLOST, “that was looked at by legal counsel for the House, Senate, and the executive branch,” Long said. “They all determined it was legal.”
Another accusation is that the GDOT is getting rich off this, Long said. “Nothing could be further from the truth.”
All the money will go through the Georgia State Financing and Investment Commission. That’s an existing agency that is essentially the bonding arm of state government.
“They hold the money. It comes to them,” Long said. As GDOT finishes portions of projects, it will seek reimbursement from GSFIC.
“They reimburse usâ ¦ so we front the money,” Long said. Hopes are systems will be in place “so the reimbursement is almost at the same time we are paying your contractors.”
“Anybody that thinks we are getting rich off this doesn’t have a clue of what they are talking about,” Long said.
GDOT is responsible for “delivering” all the projects on the lists for the 12 regions, though there are some differences in the Atlanta region.
GDOT can enter into agreement with local governments for some projects.
“We may enter an agreement with Coweta to deliver projects,” Long said. “Most counties won’t do that. But a county like Coweta, that is big enough, may want to,” he said.
Projects for which GDOT would enter into agreements with local governments would be “mostly just smaller projects, or maybe the projects they are already working on.”
“There are several projects the [Coweta] is already doing the design on now,” he said.
All the sales tax money raised within the regions must stay within the regions where it was raised, under the law that created the TSPLOST.
“We can’t take from Three Rivers and spend it in Atlanta — that is an important point,” Long said.
Long said another question people ask is, What will happen to any interest income on the TSPLOST money? There won’t be much interest generated, Long said, because the money will be spent shortly after it comes in. For some projects, there may be more interest built up, but “that money is not going to be a big interest earner,” he said.
What interest is raised will be used by GSFIC to help pay the administrative costs of handling the money. “It’s got to come from somewhere,” Long said of the money to pay administrative costs. “I’d rather it come from there than from the proceeds.”
Any money that is left over after all the projects on a region’s list are completed will be returned to the counties. The money will be returned using the same road mile and population formula used to determine how much in “discretionary” money each county and city gets.
The project lists, put together by regional transportation roundtables, are expected to use 75 percent of the total proceeds from the 10-year tax. The other 25 percent will be distributed as discretionary funds, which can be used for any transportation-related purpose. Any leftover money will also be treated as discretionary funding.
If the TSPLOST passes, it will free up state and federal gasoline tax money to go to other transportation projects, but that money can’t all be sent to Atlanta, either. Gasoline tax money is subject, by state law, to something called “congressional balancing,” which means that equal amounts of federal and state gas tax money must be spent in each of the state’s congressional districts.
“Whether you pass the tax or not, we are still required to spend our federal money equally around the state,” Long said. “The further we get along in the processâ ¦ under our current funding schemeâ ¦ our maintenance needs are going to take a larger percentage of the pie and capital improvements are going to be less and less,” he said.
“People say we don’t have a Plan B,” Long said. “There is a Plan B. The current course is the plan,” Long said, but “the current course we’re on now is in a little bit of trouble.”
Currently, the federal government, through stimulus money and deficit spending, is paying out more money from the Highway Trust Fund than is coming in from gas taxes.
Usually, Georgia is a “donor state.” That is, Georgia receives less in federal transportation funding than the federal government gets from gasoline sold in Georgia. Eventually, things will go back to being that way.
Congress is currently debating a new transportation bill. There hasn’t been one in a while. “They have been doing extensions. They just keep extending it at the same funding levels,” Long said. “If they make a decision that what comes in equals what goes out, it is going to be a big reduction for us. And it’s hard to plan around that.”
If TSPLOST is not approved, GDOT won’t be able to do as many expansion projects and other new capital projects, according to Long. More money will go to maintaining the current system.
“Economically, we’re not going to be as competitive with other states, primarily in metro-Atlanta,” Long said. Other cities are already using Atlanta’s traffic problem against us, when it comes to attracting industry, Long said.
In Charlotte, N.C., “they’re saying Atlanta doesn’t have a planâ ¦ you don’t want to go to Atlanta,” Long said.
Another concern is GDOT’s fiscal accounting situation. “There is an issue with accounting issues and some of the systems we have,” Long said. “Both the department of audits and the state accounting office have been working to resolve the issue,” Long said. “The bottom line is, how the auditors wanted us to do it changed,” he said. “We have made major changes, major improvements.”
Nationally, GDOT ranks very well, he said.
A recent study by National Cooperative Highway Research Program ranked GDOT tops for projects being completed on budget (85 percent) and second in the nation for projects being completed on schedule (also 85 percent).
The Reason Foundation ranked Georgia number one in three categories in its 19th annual highway report: rural interstate condition, urban interstate condition, and rural other principal arterial condition.
“If our roads are number one in the country, how can we be totally mismanaged like these guys are saying?” Long asked.
“We certainly haven’t kept up with congestion, mostly because we haven’t had enough money to keep up with it,” he said.
But “we’ve still got a superior interstate system” that is better than “just about everybody in the country,” he said.
When it comes to the TSPLOST, “the bottom line is: this is going to be run very well,” Long said. “It is going to be run with a lot of public input, with a lot of oversight and transparency,” Long said.
