During the past few weeks, metro Atlanta interstates have been paralyzed for hours by a suspicious object, three horrific pedestrian fatalities on I-285, and a series of multi-vehicle pile ups. The fragility of our transportation network has been more visible than usual.
Georgia needs an additional $1 billion just to catch up and replace existing and deteriorating transportation infrastructure. Our state currently collects 4 cents per dollar in sales tax on gasoline. Only three cents of that four are committed to transportation. And only motor fuel excise taxes are obligated, under the Georgia Constitution, towards only transportation expenditures.
Though we all are enjoying lower gasoline prices bringing us nearly back to the 1990s, those lower prices also mean substantially lower sales tax revenues under our existing tax model for motor fuel.
The current price of a gallon of gas in Georgia is a combination of the price of the commodity, wholesaler costs, retail mark-up, state and local sales taxes, and state and federal excise taxes. Sales taxes, like the Fair Tax or any consumption tax, rise and fall with the purchase price and are tied to each dollar of sales. Excise taxes are fixed duties or fees charged on the sale of specific merchandise, such as gasoline, diesel fuel and cigarettes and alcohol (the latter two often referred to as “sin taxes”).
Thanks to bold leadership from Gov. Nathan Deal, Lt. Gov. Casey Cagle and House Speaker David Ralston, after months of study and public hearings conducted by the Critical Transportation and Infrastructure Task Force, House leadership stepped up with a plan to replace our currently unsustainable motor fuel tax package with a hike in Georgia’s excise tax. Existing local sales taxes will remain in place, to sunset as SPLOSTs reach their respective termination dates. And the MARTA penny in DeKalb, Fulton and now Clayton counties will remain untouched.
The House plan will raise Georgia’s excise tax on fuel closer to the level of our neighbors in Florida and North Carolina, while allowing counties to add up to an additional 6 cents a gallon in excise fees for local road funding, to be shared with cities based on a population formula. The plan on the table is a balance of options to achieve revenue enhancements with trackable measures.
The ability to enhance grant programs for private-sector investment, where a competitive match is offered, should also be expanded with an emphasis on partnerships that stress transit connectivity — as in the case of partnerships with GRTA and MARTA. At the top end of the Perimeter, the Perimeter Community Improvement Districts have a track record and plan for new opportunities to partner resources with these agencies.
There are no easy solutions, and no one likes to discuss taxation options. However, preparing a menu of revenue enhancement options allows us to balance an agenda. The financial pressures to raise an additional billion dollars for transportation will be shared by local, state and private partnerships.
Thankfully, Georgia’s economy has finally started to thaw, with more than 324,000 new jobs created during Deal’s first term. Thriving areas, such as metro Atlanta’s Central Perimeter sub-market, and the new job growth and investments already made there will help fuel our region’s economic engine. Many challenges and ills associated with the recession begin to vanish if we can return to the days of 4 percent annual economic growth.
Until then, if we want to improve traffic flow and congestion, a greater share of that funding burden will fall back on us. Saying “no” may seem the simplest and easiest way to go, but as Atlanta is built on being the transportation, business and logistics hub for the Southeast, not continuing to invest in those strong suits could chill our emerging economic recovery.
Our Perimeter CIDs became Georgia’s preferred address for Fortune 500 companies through planning, investment and innovation for more than a decade and a half, and we are planning for our next decade. We support efforts of our state leaders to move us forward. We understand this requires the Legislature to commit to new revenue sources, as well as us putting some skin in the game. We’re with you.
Yvonne Williams is CEO and president of the Perimeter Community Improvement Districts.
