For the first time in years state leaders are sending signals before the January General Assembly that they might raise revenues to fix a challenge Georgia needs to address, in this case its neglected transportation system. A new legislative committee report outlines a menu of options to raise more money for transportation. I will applaud a responsible fix to the state’s traffic woes now strangling economic development opportunities.
But our education and health care system are no less in need of attention and can play just as critical a role in the state’s ongoing economic recovery. Schools across Georgia are underfunded by $750 million in the state budget this year, following several years of underfunding at about $1 billion. Meanwhile, Georgia’s rural hospitals teeter on the brink of financial collapse while state lawmakers could toss them a ready lifeline.
Rededicating a penny of Georgia’s fuel tax to transportation from the state’s General Fund is one of the ideas mentioned in the legislative report. This is akin to an accounting gimmick and would result in several hundred million dollars in additional cuts to the non-transportation sections of the state budget.
Another transportation study committee proposal would increase the state sales tax by one penny. A sales tax increase is the most efficient way to raise significant revenues. One worrisome idea floated is to combine a sales tax increase with an income tax cut. That would raise taxes on middle and lower income Georgians while handing a significant tax cut to higher income Georgians. Such a tax cut would divert money from education and other initiatives important to job growth with little benefit to the state’s economic development.
The responsible thing to do is to tackle a few of the state’s biggest challenges head on, at the same time.
Improved education funding must be a priority this year. The state’s own formula called for it to spend an additional $8.3 billion on public schools since 2002. School districts across Georgia still furlough teachers and have shortened calendars.
Georgia should close the health insurance coverage gap this year by accepting the billions of dollars available through the Affordable Care Act. Federal money can cover 100 percent of the cost to close the gap the next two years and at least 90 percent in future years. Expanding Medicaid income eligibility is the right thing to do for hundreds of thousands of Georgians and the countless communities that depend on rural hospitals.
And, yes, Georgia needs to address its transportation mess with increased revenues focused to deliver smart solutions. Lawmakers could choose to raise gasoline taxes, now among the lowest rates in the country. The committee offered other viable options that raise dedicated revenues without robbing the budget of some other vital state service.
Investments in education, health care, transportation and a wide range of public services are vital to the quality of life in communities across the state. Options to raise revenue in a fair and responsible way include raising cigarette taxes or taxing some services that don’t pay now.
Georgia policy makers should act now while the economy is on the mend. We have a chance to create strong underpinnings for Georgia’s economy and prime it for success for decades to come.
