Ga. diverts taxpayer fees to general fund

Millions collected for designated uses instead plug holes in state budget. ‘They’re breaking every law in the books,’ says one Georgia father.
Alan Brown with a driving simulator at Cartersville High School. Following the death of his teenage son, Brown pushed for a law that mandated drivers’ education, Joshua’s Law, to be paid for with fees on speeding tickets. BRANT SANDERLIN/BSANDERLIN@AJC.COM

Alan Brown with a driving simulator at Cartersville High School. Following the death of his teenage son, Brown pushed for a law that mandated drivers’ education, Joshua’s Law, to be paid for with fees on speeding tickets. BRANT SANDERLIN/BSANDERLIN@AJC.COM

How fees are diverted

Since fiscal year 1993, two environemental funds have generated about $450 million, but only $264 million has gone for environmental cleanup. About $186 million was diverted to the general fund.

Source: State Environmental Protection Division

Georgia fee programs

Here are some of the fees Georgia collects from residents:

Tire fee: $1 per tire to clean up tire dumps

Dump fee: 75 cents per ton deposited in landfills to clean up hazardous waste dumps

Prepaid cell phone fee: No less than $1.50 per month for 9-1-1 programs

Court filing fee: $125 for civil filings in state court to help pay for running courts

Traffic offense add-ons: 1.5 percent on traffic fines for driver education programs

Criminal or quasi-criminal case fine add-on: 10 percent for police and prosecutor training

Cherokee County retiree Harry Abrams is willing to accept the $650 he spent on new tires for his Toyota Highlander, but not the $4 fee the state tacks on to clean up tire dumps.

That’s because Abrams knows the money often never makes it into the state’s Solid Waste Trust Fund, where Georgians have been told for more than 20 years the money is supposed to go.

About $50 million collected from the $1 per tire fee has been funneled into the state’s general fund since 2003 as governors and lawmakers found other uses for money, part of a pattern of diverting money that has become more prevalent since the turn of this century.

“It should be eliminated,” Abrams said of the fee. “If they were actually using the money for its intended purpose, we wouldn’t have to worry about environmental hazards. To me, it’s a misappropriation of funds.”

In all, state lawmakers have diverted hundreds of millions of dollars of fee money — from landfill fees to court surcharges — in an effort to balance the budget, allowing them to avoid raising taxes or having to further cut spending. In doing so, they’ve collected money from Georgians telling them their fees were going for one thing, while spending them on another.

“It’s almost like a bait and switch,” said Rep. Jay Powell, R-Camilla, who has championed stopping the diversions. “It’s a bipartisan issue about honesty in government.”

Money lawmakers told the public would go for environmental cleanups, police training or driver’s education has often gone into the general fund to be spent on pretty much everything else — from economic promotion effort to schools to paying off the debt on new buildings legislators approve.

“They are breaking every law in the book,” said Alan Brown, whose son’s death inspired the teen driver safety statute “Joshua’s Law.”

Now a new audit is questioning whether the state should continue charging the $1 per tire fee, arguing that officials are raising more than enough money to clean up dumps. The Department of Audits and Accounts report said state officials should do a more thorough review of the program before asking lawmakers to renew the fee in the future.

The analysis said while the so-called “scrap tire fee” that consumers pay when they buy new tires has been unchanged, the number of cleanups and other activities funded by the Solid Waste Trust Fund has dropped over the past 10 years.

$340 million in fees

While the audit focused on the tire fee, much the same could be said of several other fees the state charges.

A state report shows the government collects more than $340 million a year in fees and licenses that go into the state’s general fund.

Alligator hunters, elevator installers, cosmetology instructors, turtle farmers, tanning bed operators pay fees or for licenses. More than $91 million last year was collected on special court fees and assessments.

Some of the money goes to trust funds or into the general fund to cover the cost of licensing, or programs associated with those activities. Other money goes into the general fund with limited public accounting of how it's spent or whether it covers the cost of the program it it is intended to support.

One high-profile example of the diversions has been “Joshua’s Law,” which was passed in 2005 and added a surcharge to traffic fines to establish driver education programs in Georgia schools. The law raised $10 million or more annually some years. But a 2011 state audit found that of $57 million collected at that point, only $8 million had actually been used for driver training.

In 2013 lawmakers cut the surcharge from 5 percent to 1.5 percent of the original fine for traffic offenses and shortly afterward Gov. Nathan Deal began allocating more money for driver’s education programs, including $2.9 million this year.

Still, Brown said only about 10 percent of the money the state reports it has raised over the past decade has gone to driver education programs.

The law forces teens to wait to get a license if they don’t take driver’s ed, and Brown said it has helped reduce teen driver fatalities by 60 percent.

“Just think what we could have done if we’d had all the money,” he said. “It’s been a success in spite of the government. State government has done everything it can to sabotage the program.”

At the rate the state is funding driver education programs, he said, it could take decades to get one in every school.

‘Rationalizing’ a problem

Other fee programs have lost out on the diversions as well.

In 2012, a report showed much of the surcharge on criminal fines designated for police and prosecutor training was being diverted. In some years only about a third of the money was going to training.

Local governments have long complained that the local sales tax money the state keeps to administer tax distributions — estimated at about $50 million annually — is far more than it costs the state to do the job.

As lawmakers frequently point out, the General Assembly can create fees for a designated purpose such as cleaning up hazardous waste sites. But if there is no companion constitutional amendment promising the money goes for that purpose or fund, the fees go into the general pot of revenue the state uses to pay its bills.

“It’s frustrating as a legislator to pass a bill that doesn’t do what you want it to do,” Powell said. “I think it’s about our credibility and we have so many folks who already distrust government.”

Even some lawmakers who have, in the past, supported the need for lawmakers to have leeway in how the funds are spent are becoming more open to stopping or slowing the diversions.

“If you analyze it from where we sit, we don’t have any problem rationalizing it,” Senate Appropriations Chairman Jack Hill, R-Reidsville, said of the years of diverting fee money. “I think everybody has come to the realization that if something is being collected that is more than we need, good business practices say we should reduce the fee.”

Plugging budget holes

Some lawmakers, county officials and activists have been pushing to stop the diversions or cut fees for years, and two environmental funds have been ground zero for their efforts because they regularly come up for renewal.

The Solid Waste and Hazardous Waste funds were created in the early 1990s, and they were designed to help the state’s Environmental Protection Division clean up tire dumps, create a hazardous site inventory, force cleanups of polluted sites by those responsible, or clean up “orphaned” sites.

For the Hazardous Waste Fund, money comes from a per-ton fee charged to dump waste into landfills, and hazardous waste fees.

Combined, fees designated for the two funds have collected about $450 million, of which about $264 million has actually been appropriated for use by the funds for their intended purposes, according to EPD.

Most of the diversions have happened in the past 12 years, when two fiscal recessions sent governors and lawmakers like Hill desperately searching for ways to fill holes in the budget.

Spending money to clean up tire dumps when “you have to keep schools open” was “probably not the best use of limited resources,” said Mary Walker, assistant director of EPD.

But some county officials have complained that money for environmental cleanups wasn’t always available when they needed it. Others say Georgians shouldn’t be charged the fee if the state isn’t going to spend the money on cleanups.

“The program was established for a certain thing. I am not opposed to the fee, but if you are not going to use it for its intended purpose, don’t collect it,” said Houston County Commission Chairman Tommy Stalnaker.

Stalnaker said his county has probably paid $1 million to $2 million in landfill fees over the years, but it has not had to ask the state for help cleaning up hazardous waste problems.

“I view it as an insurance policy. If you need it, it’s there,” he said. “If the money is not going to be there, why are you paying into it?”

Mark Woodall, a longtime environmental activist, said eliminating or cutting the Solid Waste or Hazardous Waste funds would be a bad idea.

Last month, when asked about the fees, Woodall sent The Atlanta Journal-Constitution a photo of tires dumped on his property in Woodland, in Talbot County.

“All of the tree farmers have to have gates on our land or we get all kind of illegally dumped tires and other things,” he said. “Now that we have gates, people just dump the tires and roofing materials, etc. in front of the gates.”

Woodall said the diversion of trust fund money has stopped cleanups in the past.

“If the money had gone to the intended uses, it would have been sufficient to keep the tire and hazardous waste programs moving forward with cleaning up contaminated sites and tire dumps and doing enforcement,” he said. “It’s sort of a chicken and egg thing. If you cut back on education and enforcement, you get more problems to clean up.”

EPD officials say there are currently more than 150 abandoned hazardous waste sites, landfills and tire dumps that need cleaning up, at an estimated cost of about $84 million.

Opposition to change

Attempts to stop the diversion of fee money by lawmakers like Powell have run into powerful opposition in the past. Among the opponents have been governors and top lawmakers who didn’t want to handcuff budget writers by taking away millions of dollars they could use to fill financial gaps, particularly during recessions.

When lawmakers extended the landfill fees for the Hazardous Waste Trust Fund in 2013, they included language saying the fees had to be reduced if the money was diverted. Gov. Nathan Deal signed the fee extension bill, but he added a so-called "signing statement" declaring that the fee reduction language was nonbinding.

Since then the state’s finances have improved. Tax collections were up more than 8 percent — in part because of increases in the state gas tax — during the first three months of this fiscal year.

The General Assembly has also seen massive turnover during the past few election cycles. Many lawmakers elected in recent years have stressed government transparency and accountability, especially in areas like special tax breaks, where the state is spending big money. And Powell, the champion of the anti-diversion bills, is now chairman of the House Ways & Means Committee, a powerful panel that writes state tax law. He said the next time the diversion issue is raised, it may come in the form of a proposed constitutional amendment that forces lawmakers to spend fee money where they promised it would be spent.

So lawmakers may take up the issue during the 2016 session. And even if they fail to change the law, they will have another shot at the tire tax in a few years when it comes up for renewal.