Governor Deal’s rhetorical shift on funding for Savannah River deepening

January 20, 2013 12:47 pm

by Bill Dawers · 62 comments

Last April, at an event here in Savannah, Governor Deal implied that the state might cover the entire $650 million cost for the Savannah Harbor Expansion Project. From the Savannah Morning News’ Deal pledges to ‘do whatever necessary’ to deepen harbor:

Deal told reporters Tuesday at the Port of Savannah he’s “not willing to let the federal government off the hook” from its commitment to cover 60 percent of deepening the shipping channel, a project necessary to accommodate the supersized cargo ships expected when the Panama Canal expansion is completed two years from now.

“We’ll have our 40 percent, and we expect (the federal government) to live up to their commitment,” he said. “But if they don’t, we will accommodate accordingly.”

And now this from last week’s State of the State address:

Another asset is the Port of Savannah, the fourth largest container port in the country and the second largest on the East Coast. As you know, we have worked for many years to expand the Savannah Harbor and deepen the channel in order to allow the larger vessels that will soon be coming through the Panama Canal to dock in our state. We are very pleased that last fall we succeeded in getting a positive Record of Decision from the federal government. This is a major milestone on this project.

My budget includes an additional $50 million in the bond package for this project. This will bring our total state contribution to $231 million. That is almost the state’s entire contemplated share of the costs of this project; the remainder of the cost is to be paid by the federal government.

No mention of the state stepping into the void if the federal government does not come through with that $400 million.

I don’t know how the politics will play out, but I’m guessing that the Governor’s statement from last spring probably won’t work against funding for the massive dredging and environmental mitigation project.

But there might be some significant problems considering trends in governing philosophy. As I noted in a post a few days ago, Georgia’s Republican House delegation opposed the Sandy relief package, primarily because there weren’t offsetting cuts elsewhere in the budget. The Cato Institute’s most recent Tax & Budget Bulletin even questions whether the federal government should be involved with port decisions:

Privatization holds great promise. Consider, for example, that U.S. airports and seaports are generally owned by governments, but many foreign airports and seaports have been partly or fully privatized. The World Economic Forum rates America’s seaports only 19th in the world, but the world’s second- and third-best seaports — in Singapore and Hong Kong — are private.

I find Cato’s argument extremely problematic. Hong Kong and Singapore are essentially city states; they are not sprawling nations with many ports directly competing with each other.

Still, Cato is laying out one of the arguments that could make federal support of SHEP even more problematic.

Daddy Got A Gun January 20, 2013 at 4:14 pm

First in with …… If we have $300M to give away to a billionaire so he can make more money, we probably could find another $400M to help grow the economy for all Georgians, not just the 1% of 1$%.

IndyInjun January 20, 2013 at 6:11 pm

It is a worse problem since the giveaway to the billionaire is more than a $billion……you could dredge the Savannah River all the way to Augusta for that kind of money and prioritization. It remains to be seen whether there will be a Stupor Bowl under the gold dome.

saltycracker January 20, 2013 at 6:08 pm

Biggest comeback in an NFL. Championship as 49ers take the fourth qtr
28-24
Darn
Now, maybe we can appreciate the not so old dome and refocus on the port ?

IndyInjun January 20, 2013 at 6:13 pm

It is not amusing that point #1 hawked in fooling Augusta region voters into TSPLOST was the promise of the Savannah port project, when it didn’t even pass the Savannah region and now there looks to be backtracking on the port.

Bob Loblaw January 20, 2013 at 8:23 pm

Huh? You mean most voters said “hey, there’s gonna be funding in another region for a project that’ll help our region so I better vote yes!”

No.

IndyInjun January 21, 2013 at 8:23 am

I wrote that it was the #1 point “HAWKED,” not the thing that carried the vote. That got accomplished with a media company with an agenda, mislead county officials, and outright deception by the DOT/TIA propagandists.

atlanta_advocate January 21, 2013 at 9:20 am

@IndyInjun:

Hmmm. So in your opinion, it will be better to just sit on our hands and not have any transportation projects at all? Because that is what is going to happen in the areas that didn’t pass the T-SPLOST.

If anyone misled and deceived with their propaganda, it was the anti-TSPLOST crowd who convinced everyone that truly worthy transportation projects could be funded without additional revenue sources, or that were T-SPLOST to be defeated, another Plan B with a better list and more palatable funding mechanism would emerge. Guess what? It hasn’t happened and isn’t going to. And the Erick Ericksons and Tea Party Patriots and the suburban newspaper editorial boards who led the opposition to T-SPLOST haven’t been heard from in months. Neither have the legislators who originally supported it, turned against it when they saw that supporting it threatened their political careers, and promised to provide alternatives in this legislative session. None of those folks have said a peep, even after Governor Deal has proposed a budget that provides practically nothing in the way of transportation projects. And we all know that nothing is going to be proposed in 2014, because that is re-election year for Deal and the folks under the Gold Dome. No one is going to propose a transportation agenda in an election year because that will mean proposing a way to pay for it. So what are we left with? 2015 at the earliest, and even that is only if the economy improves AND Deal wins re-election. Which is, of course, exactly what the T-SPLOST supporters who said that it should be passed despite all its flaws said would happen, and the T-SPLOST opponents promised that it would not happen.

So, it seems like you simply prefer some propagandists who mislead to others.

IndyInjun January 21, 2013 at 10:50 am

The TSPLOSTERS’ so-called “base case” estimate was based upon 8.8%!!!!!!! income growth this year. I won’t get into all of the games that got played with the numbers. If you were a county with most of your money in Tier 3, you really got snookered by this.

I won’t rehash the debate, but congrats to the 9 out of 12 regions who didn’t allow the deception to carry the day.

atlanta_advocate January 21, 2013 at 11:42 am

And congrats when those 9 out of 12 regions won’t do squat in the area of transportation or economic development (except, that is, if Clayton chooses to join MARTA and of course whatever Atlanta is willing to do, including but not limited to the stadium and Beltline) for the next 5-10 years. And the fact that income growth is unlikely to be significant this year – or next – is the primary reason why there won’t be a Plan B. Hope you are happy sitting around doing nothing while Virginia, Texas, North Carolina etc. are building for the future. But hey, it isn’t all bad news. Louisiana is about to ditch their state income tax in favor of a regressive sales tax, and do so in a bad economy when both sales tax receipts and tourism is way down. So we won’t have to worry about competition from those guys at least, just as Tennessee isn’t an economic competitor either.

mpierce January 21, 2013 at 12:09 pm

“States without an income tax have significantly better growth in private sector GDP (59% versus 42%) over the last 10 years. They increased the number of jobs by 4.9% while jobs in the rest of the states declined by 2.6%. States without an income tax gained population (+5.5%) from domestic migration (U.S. residents moving in and out of states) while all other states as a whole lost 1.3% of population between 2000 and 2009.”

http://finance.townhall.com/columnists/danieljmitchell/2012/12/16/states-with-no-income-tax-grow-faster-and-create-more-jobs-n1467969/page/full/

BTW, Texas is one of the states.

IndyInjun January 21, 2013 at 12:21 pm

Texas has a gross receipts tax of 1% that it had to implement when sales taxes at about 9% failed to produce revenue.

Louisiana’s parishes have their own sales taxes at rates from 3.5% to 5.6%. I seem to recall that Jindal is talking about a state rate of 8%, so it remains to be seen what happens to revenues and business activity when the sales tax rate is well into double digits.

Across the USA, real incomes are at 1973 levels, so going to high sales taxes on net incomes might pose a few issues.

mpierce January 21, 2013 at 12:52 pm

The Texas state sales tax is 6.25%.

IndyInjun January 21, 2013 at 1:35 pm

That is only the state rate. I have seen lots of invoices with Texas state and local taxes at 8.25%

IndyInjun January 21, 2013 at 1:59 pm

We are off topic, but when I wrote that Texas sales taxes were around 9%, I was recalling the 8.25% on a vendor invoice where the correct rate was 8.8%, because the sale was really in Louisiana, plus I was adding the 1% gross receipts tax. However you slice it, sales taxes at 8% plus are hurting the middle class, whose pay increases are nothing like that much.

mpierce January 21, 2013 at 2:29 pm

The issue was state taxes, not local. Those local taxes will be there regardless of whether the state collects through sales or income.

However you slice it, sales taxes at 8% plus are hurting the middle class

And the taxes won’t hurt if taken from their income? A sales tax at least broadens the tax base to those who have unreported income streams. Of coarse the question remains on how much in sales tax will be lost to out-of-state/internet purchases.

Scott65 January 21, 2013 at 2:22 pm

They also have LOTS of other taxes and fees which almost/used to make up for it. Thats why they are in the mess they are in now trying to figure out how to pay for all of their growth and not as much coming in

IndyInjun January 21, 2013 at 2:36 pm

The gross receipts tax was a panic response to the failure of the sales tax to raise revenue.

@Mpierce, the gross receipts tax is a state tax.

mpierce January 21, 2013 at 2:53 pm

@Mpierce, the gross receipts tax is a state tax.

Yes it is. My comment was in reference to your statement: “I have seen lots of invoices with Texas state and local taxes at 8.25%

mpierce January 21, 2013 at 2:50 pm

So they would have been better off with a shrinking job market like those states with income taxes?

In general it looks like those states with income taxes are in a bigger mess.

IndyInjun January 21, 2013 at 2:54 pm

Texas is fueled by an oil and gas boom, not tax rates.

IndyInjun January 21, 2013 at 12:11 pm

Those 9 regions retain the potential of that 1% to use on other priorities WHEN the legislature relents and lets local sales tax money to be spent on operations and not just capital. To take that 1% in a county like mine is to take perhaps the last slice of new revenue and throw it into fixing potholes when there are screaming needs in education. That is a damned shame. We reward a bloated, DOT that has been proven incompetent with even more funding, because the rural county’s TSPLOST money is totally captive to DOT.

As for the port at Savannah, one guesses that the wonderful new TSPLOST highway system in the Augusta region that was supposed to feed it is now going to be one huge project to nowhere.

At least the legislature is doing the right thing and letting the penalty for non-passage stay put.

Will Durant January 20, 2013 at 7:37 pm

The Longshoreman’s Union should have stayed quiet until the dredging was done or at least started. Hell, a lot of those guys make even more money than Chip Rogers.

atlanta_advocate January 20, 2013 at 8:29 pm

@Daddy Got A Gun and saltycracker:

It isn’t as simple as you are making it seem. The stadium deal, whatever your feelings about the project, already has a dedicated revenue source, which is the hotel/motel tax. Even if you accept the argument that the hotel/motel tax law should be changed to allow its revenue to be spent elsewhere, that doesn’t change the fact that if the stadium deal goes through, no one will have to say “now where are we going to find the money in the budget to do this” because the revenue source already exists. Atlanta just needs permission from the state to use it.

The ports issue is completely different (as is pretty much anything else, i.e. any “Plan B” to the T-SPLOST) in that if you want to get it done, you are going to have to find the funds for it. And since state revenues are still tight and Georgia is in a fiscally conservative “no new taxes” mode, it would mean taking money from something else – i.e. education, health care, highways – to fund the port.

Not doing the new stadium won’t make the money for the port appear. (And no, you can’t take the money for the stadium and use it for the port.) They are two completely different issues. Which is precisely why I warned (albeit using a different handle back then) against using the stadium as rhetorical device against the T-SPLOST, something that Debbie Dooley and the Tea Party got a lot of mileage out of. Because the stadium has a known, dedicated funding source that isn’t going away and can’t be used for anything else, then the likely result would be the stadium getting done anyway in spite of its unpopularity while nothing of consequence gets done for transportation.

The reality is that if you want this port – or anything else that is large and expensive – to be done in this economy, you are going to have to institute a tax to pay for it. The stadium will likely get done because the tax to pay for it is already in place. So if you want this port to happen, you are going to have to come up with a tax to pay for the revenue. If the good folks in the suburbs want the long needed highways to get built, then it will require a tax to fund it. Because the vast majority of our tax revenues have to go to things like public education and MediCaid, there isn’t enough money left to pay for anything else. That’s why the governor and the legislature oppose using gas tax revenues for transportation projects only: the general fund needs that revenue.

But if you think that the state is going to come up with $400 million – $650 million by cutting public education or health care or reducing the budgets of state agencies, that is fairy tale dreamland stuff. That is why saying stuff like “If we have $300M to give away to a billionaire so he can make more money we probably could find another $400M to help grow the economy for all Georgians …” is so unhelpful … it isn’t true. “We”, as in the state of Georgia, doesn’t have that money. The city of Atlanta does. And even if the state refuses to allow Atlanta to spend the money on the stadium, the state still won’t have it. That money will just stay in Atlanta to be spent on something else in the city.

But maybe a compromise could be worked out. How’s about:
A) telling Blank to go fish (Sonny Perdue reference intentional)
B) taking the $300 million – $400 million from the hotel/motel tax to fund the port
IN RETURN FOR
C) the state committing – via a constitutional amendment, not an empty promise or passing a mere law that can easily be repealed – to providing MARTA with the same sort of support that every other state gives public transportation systems (of course, contingent upon the recession ending and MARTA implementing the KPMG audit)

Now that is something that would benefit everyone. The state gets its port without having to add a new tax to pay for it, and Atlanta finally gets the state support badly needed to make MARTA a public transportation system that is competitive with all the other big city transportation systems that already get state support.

Sound like a good idea to you? Otherwise, Atlanta gets its stadium and Georgia has to rely on the combination of the Barack Obama administration and the Tea Party controlled House of Representatives to give Georgia a half a billion dollars when it isn’t in the political interests of either to do it (regarding Obama, Georgia is a red state whose voting citizens mostly despise him, and the Tea Party house types want major spending cuts and the government to be less involved in economic development projects like this). Good luck with that.

saltycracker January 20, 2013 at 11:47 pm

Ad
In short mentioning the two did not suggest similarities in funding. o wouldn’t suggest using Atlanta’s bed tax for a port. Indications are the stadium needs from Ga coffers could be $300 mil or so beyond the bed tax. My response was to keep stadium needs under the umbrella of the participants not the general public.

atlanta_advocate January 21, 2013 at 8:34 am

@saltycracker:

“Indications are the stadium needs from Ga coffers could be $300 mil or so beyond the bed tax. ”

It will be $250 million or so beyond the bed tax but it won’t be from the Georgia coffers. The city of Atlanta will raise that revenue itself through a combination of new taxes and bonds. The folks who oppose this would like you to think that the state of Georgia will have to use tax money to support this one way or another, but it won’t. Atlanta – which is fiscally liberal and therefore perfectly willing to tax itself to pay for the things that it wants – will finance this fully, with no assistance from the state.

saltycracker January 21, 2013 at 9:47 am

Great – then the Guv needs to mind his own business

atlanta_advocate January 21, 2013 at 11:46 am

Unfortunately he can’t. Similar to MARTA, the state has financial oversight with regards to this. Charlie Hall proposed the excellent notion that the state having a degree of oversight is a good thing, as it keeps Atlanta from going the way of Birmingham and other cities that ruined their bond ratings and went bankrupt. So the governor and the legislature have to review the measure. However, if the deal is legitimate – and it likely is – then the governor and legislature ultimately have no basis for rejecting it. And the latest round of polling that shows that the actual residents of the city of Atlanta support it by at least 54% (previous polls included suburban residents) will make it even more so.

IndyInjun January 21, 2013 at 1:52 pm

Sure he has a basis for rejecting it. It provides two revenue streams that they intend to leverage up, by all appearances. The H/M tax stream will support $350 million and perhaps as high as $500 to $600 million and they artfully skate all around saying outright in the term sheet that they are going to leverage up seat rights payments into other bonds. Heaven only knows how high that debt could be!

Last year the Dome contributed $14 million over and above the $18 million HM tax, so you are talking about an enormous public cost here.

The Last Democrat in Georgia January 20, 2013 at 11:57 pm

“The reality is that if you want this port – or anything else that is large and expensive – to be done in this economy, you are going to have to institute a tax to pay for it.”

That’s not necessarily true. Instead of trying to institute new and increased taxes in a fervently tax-averse environment, government should be exploring and pursuing creative new ways of funding our logistical and transportation needs. Creative new ways of funding like ELIMINATING existing diminishing transportation taxes and replacing those taxes with a combination of extensive private investment and user fees that are tied to each piece of transportation infrastructure on which they are collected so each needed piece of infrastructure become sufficiently self-funding.

“If the good folks in the suburbs want the long needed highways to get built, then it will require a tax to fund it.”

That’s the problem…The good folks in the suburbs don’t necessarily want more highways to be built out of fear that those roads will worsen congestion-inducing sprawl (Exhibit A: The abandoned Outer Perimeter/Northern Arc which was rejected by the public over a decade ago…Exhibit B: This past summer’s road-heavy T-SPLOST farce which, unsurprisingly, went down in flames). Many of those good folks in the suburbs want vastly-improved transit options (you know, the kind of adequate transit options that should be prevalent in a major international metro area of 6 million people) and are willing to pay for those improved options to simply exist (by way of user fees), while other good folks in the suburbs simply want very- little or nothing more built at all because of the fear of the type of sprawl that has turned Cobb and Gwinnett (and Dekalb and Clayton) counties into rapidly-urbanizing post-suburban nightmares (see Fayette and Cherokee counties where 80% of voters voted against the T-SPLOST).

“C) the state committing – via a constitutional amendment, not an empty promise or passing a mere law that can easily be repealed – to providing MARTA with the same sort of support that every other state gives public transportation systems ”

Any provision for the state to directly fund MARTA with tax revenues of any kind would be a big political NO-GO. And besides being politically-impossible on the state level, where would any direct state funding of MARTA come from? The diminishing returns of the increasingly wholly inadequate state gas tax? The same state gas tax that cannot even adquately-fund the road network?

Instead of making politically-futile attempts of trying to get the state to fund MARTA with non-existent sales tax revenues, the state and the region should be trying to completely overhaul the severely-declining transit system that is currently known as MARTA into something that is much more palatable (both politically and operationally) to a much-broader socioeconomic spectrum of the region’s commuters.

The state and the region should also be trying to overhaul MARTA into something that is perceived as being much more effective at relieving the Atlanta Region’s notorious traffic congestion and getting a much broader socioeconomic spectrum of commuters from point-A to point-B.

The state and the region should also be trying to fund this overhaul of MARTA into something much broader and effective without new or existing sales tax revenue through the utilization of user fees (distance-based fare structure), extensive private investment and Tax Increment Financing (property tax revenues from new development that pops up along transit lines).

atlanta_advocate January 21, 2013 at 9:09 am

@LDIG:

User fees = tolls = taxes. Georgia 400, remember?

So as for “Many of those good folks in the suburbs want vastly-improved transit options (you know, the kind of adequate transit options that should be prevalent in a major international metro area of 6 million people) and are willing to pay for those improved options to simply exist (by way of user fees)” the issue of tolls proved to be very unpopular during the T-SPLOST debate. Remember? I recall the Tea Party quickly shouting down the tolls idea, claiming that it was just something contrived by the T-SPLOST supporters to scare people into voting for T-SPLOST. But here is the reality: no Plan B has been proposed or will be proposed (despite the T-SPLOST opponents insisting that there will be) because no one wants to propose the tax (whether you call it a tax or a user fee … are we back to the Reagan-Bush era of coming up with all of these euphemistic names for taxes?) that will be needed in order to generate the revenue necessary to pay for it.

And private investment? Excuse me, but private groups will only get involved if they can make money, meaning a substantial profit. And how will they make a profit? From tolls. Which are taxes.

“The state and the region should also be trying to overhaul MARTA”

The state and region can’t do that without dealing with the issue of the penny tax that Fulton and DeKalb have been paying for decades. Which means that Fulton and DeKalb own MARTA … the facilities, the land, the tracks, the trains, the whole lock stock and barrel. The state can’t overhaul MARTA – an asset that they have not paid for and as a consequence do not own – without buying it first. They can try to pass a law to assume control over what is essentially a county owned and run agency and asset, and if they do DeKalb and Fulton would sue, and it would take a federal or state judge about 5 minutes to decide that the state can no more take over and “overhaul” MARTA than they can your local county library, city park or courthouse. If the state could have, they would have done it by now, and not just to MARTA but to Hartsfield also. So ” the state and the region should be trying to completely overhaul the severely-declining transit system that is currently known as MARTA into something that is much more palatable (both politically and operationally) to a much-broader socioeconomic spectrum of the region’s commuters” … that just isn’t going to happen because there is no legal way for them to do so. If there were, it would have happened long ago.

But I only made that proposal in response to the comments linking the ports to the stadium, and thereby pointed out the bind that the conservative state is in but Atlanta isn’t. Atlanta can build whatever it needs/wants because it is willing to tax itself to raise the revenue in order to build/fund things like Hartsfield, MARTA, the stadium, the Beltline etc. and – despite what the people who depict it as being “the next Detroit” on the verge of cratering in on itself – is wealthy and prosperous enough to do so. Meanwhile the state is pretty much just as well off as is Atlanta, but because it isn’t willing to tax itself (whether you call it a sales tax or a “user fee” it is still a tax) it can’t do squat without the help of more liberal entities (like the federal government!).

Don’t get me wrong. I support the port more than I support the stadium. I also support transportation projects more than I support the stadium. It is just that because the GOP of this state has sold its voters a bill of goods – the idea that they can have what is needed to make this state competitive with other states and increasingly other countries for jobs and the talented people that create them without raising the revenue to pay for it – the stadium is going to happen while the other projects likely won’t because the stadium will be built in an area not controlled by the GOP.

And going back to the MARTA issue … as I have stated in the past (from my other handle) many of the reasonable and good ideas for MARTA reform would be quickly and easily adopted by MARTA governance if the suburbs and state were to join or support MARTA. As it is, the suburbs and the state want MARTA to make changes that benefit the suburbs and the state but not itself. In other words, they want something for nothing. (Consider the repeated attempts to put representatives from areas that don’t pay the MARTA tax on the MARTA board.) That isn’t going to happen and it shouldn’t happen. Just the same way that this ports thing – and the other good ideas like adding rail and highway capacity between the port and transportation hubs like Albany and Savannah – isn’t going to happen without coming up with ways to pay for it first.

The Last Democrat in Georgia January 21, 2013 at 10:46 am

“User fees = tolls = taxes. Georgia 400, remember?”

The debacle over the Georgia 400 toll was because the state broke the promise it made, back in the late ’80’s before building the road, that it would take down the GA 400 toll when the bonds that were taken out to pay for the construction of the road were paid off….It was a promise that the state should have never made seeing as though the state was already having problems adequately funding road maintenance and knew that those problems with transportation funding would only grow worse as Metro Atlanta’s population continued to grow at a nearly record-shattering pace. Instead of promising to take the tolls off of GA 400 once the bonds for the construction of the road were paid off so that the state could speedily get their favorite roadbuilding buddies a quick and easy payday, the state should have let the public know in no uncertain terms that a growing scarcity of transportation funding would require the construction and continuing operation and maintenance of the road to be financed with tolls for the duration of the life of the road (the state also should have tunneled the Georgia 400 UNDER the neighborhoods of Buckhead and North Atlanta instead of through them, but that’s another story…).

Also, the issue of using tolls or user fees to fund transportation upgrades becomes a moot point if gas taxes for roads and sales taxes for mass transit (MARTA) no longer exist. If gas taxes and sales taxes no longer exist, people won’t feel as if they are being double-charged with both taxes and tolls to pay for the transportation infrastructure they use.

Eliminating transportation taxes and replacing them with user fees makes taxation totally voluntary as only the people who use a given piece of transportation infrastructure (road, bus, train, etc) will pay for it. “You don’t use it, you don’t pay for it” is a really hard concept to beat, politically in a tax-adverse environment with strong libertarian leanings.

“And private investment? Excuse me, but private groups will only get involved if they can make money, meaning a substantial profit. And how will they make a profit? From tolls. Which are taxes.”

…Tolls are NOT taxes. Just as I explained above, tolls are VOLUNTARY taxes in the form of user fees, meaning you only pay them if you use a piece of transportation infrastructure with a toll on it. And bringing in private investment to construct, manage, operate and maintain our transportation infrastructure in exchange for keeping the proceeds from tolls/user fees that remain after all construction, operation and maintenance costs are paid in installments over a period that can range up to 90 years if necessary, where possible, means that a government which has a severe problem with incompetent management practices won’t have to be expanded to do it.

And of course the region and the state can overhaul MARTA…by joining MARTA, getting a controlling interest in the troubled transit agency, abolishing the 1% sales tax that is currently collected in Fulton and DeKalb counties to fund MARTA and replacing it with a combination of funding sources from user fees (distance-based fares), privatization and Tax Increment Financing (property tax revenues from new development that pops up along transit lines).

“Just the same way that this ports thing – and the other good ideas like adding rail and highway capacity between the port and transportation hubs like Albany and Savannah – isn’t going to happen without coming up with ways to pay for it first.”

The state already has ways to pay for severely-needed transportation upgrades, the thoughtless politicians and government bureaucrats just haven’t figured it out yet as they think that the only way to fund something is by trying to push politically-unpalatable tax increases in a highly tax-averse political and economic environment.

atlanta_advocate January 21, 2013 at 12:43 pm

“by joining MARTA, getting a controlling interest in the troubled transit agency”

How is that going to happen? In order to gain a controlling interest in MARTA, the state and the counties wishing to do so would have to join under the terms of the current charter. They aren’t willing to do that because even joining long enough to take it over would mean absorbing a huge financial – and political! – hit that no conservative state or county leader is willing to pay. Sorry, but the idea that the state/region will be able to get involved with MARTA in any serious way without paying a substantial price for that involvement is a pipe dream, and the sooner this dream is abandoned the better. I don’t know why anyone even thinks otherwise. No one else does business for free, so why should MARTA be expected to? Name a single other entity – be it a business, government agency, foundation etc. – that is going to just let someone else waltz in and take over for nothing after that entity has invested decades and many billions in building and maintaining it, and when that entity is worth billions in real estate, facilities, vehicles and other assets. Tell me when this has ever happened, and why MARTA should be the first.

Also, you may dance around the issue all you want, but tolls remain extremely unpopular in Georgia. The HOT lane thing was a political fiasco, and right now the Deal administration is pursuing toll options very quietly. They aren’t exactly screaming it from the rooftops as the next big thing and cornerstone of their transportation agenda, and for good reason. The issue isn’t “unpopular sales taxes versus innovative TIFs and voluntary distance based fares and tolls.” Instead, it is a populace that has for a generation been reared on the nonsense that the government can pay for anything that it really needs by cutting welfare and affirmative action programs, and that everything that is worthwhile can be supplied by the private sector with no cost to the taxpayer. So were governor Deal to propose the sort of grand new transportation agenda financed by user fees, TIFs etc. it would still be rejected because it would still run counter to the “something for nothing” attitude that “conservatives” have cultivated with the voters in this state, telling them that by cutting benefits to constituents the voters don’t like and because of the wondrous beneficial big-hearted private sector, they can and should get everything for nothing, not even voluntary user fees.

The Last Democrat in Georgia January 21, 2013 at 3:02 pm

The only problem with the toll lane strategy (HOT lanes) that the State of Georgia is pursuing is that the lanes don’t pay for themselves, needing heavy public subsidies of already meager existing state motor fuel taxes just to initiate construction.

So while the State of Georgia thinks that it is pursuing a strategy of HOT Lane construction with the I-85 HOT lanes, the Feds are really (somewhat) secretly running a demo for a system of federally-imposed congestion pricing that will cover ALL LANES of Metro Atlanta freeways in the highly-likely event that Atlanta-area Interstates are not expanded to accommodate the increased volumes of already very-heavy freight truck traffic that will generated by the pending expansion and continued growth of the Port of Savannah. With the trend AWAY from much-needed transportation investment over the past several years by the State of Georgia, the Feds, who don’t have any confidence that Atlanta-area Interstates will ever be expanded to accommodate increasing volumes of already very-heavy freight truck traffic, plan to impose congestion pricing on all lanes of Atlanta freeways as a way of keeping the Interstates moving for growing volumes of out-of-state through traffic by using adjustable tolls to push excess local 1 and 2-passenger vehicular traffic off of the Interstates (and presumably onto transit lines that Metro Atlantans have been averse to traditionally…The Feds are also planning to use congestion pricing to vastly increase transit use in a fast-growing major population center of 6 million inhabitants, that being Atlanta…..The Sierra Club told transit advocates that they had more to gain in the long run by voting down the T-SPLOST as the defeat of the T-SPLOST has basically crippled new road construction moving forward setting the stage for Atlanta to become a transit-heavy, transit-centric town moving forward over the long run).

And you are absolutely correct that there is no chance that the State of Georgia is going takeover MARTA….while MARTA is still functioning…..MARTA will most likely be taken over by the state only after the increasingly likely event of a financial collapse in which MARTA either ceases operation or it becomes apparent that likely MARTA will not be able to continue operating as news is out that MARTA is getting ready to raise fares again.
http://www.ajc.com/news/news/transportation/marta-chief-says-fare-increase-possible-next-year/nT2Qz/

WeymanCWannamakerJr January 21, 2013 at 1:44 pm

The premise behind toll roads/bridges where they pay for the construction and maintenance of the structure is fine. However the ongoing HOT Lane projects that most seem to be fine with are not from this typical mold as they are not planned to pay for their construction. The I85 barrier-less conversion isn’t even paying for its oversight, much less the maintenance and, by comparison, minimal construction costs since the lanes already existed.

The people inside the perimeter seem to be fine with HOT Lanes as they figure it is the suburbanites penance for not paying the 1% for MARTA. Wealthier OTP drivers are fine with it as they are willing to pay the subsidized toll for an easier commute. Some of us realize that if there was a mandate to make these lanes pay for themselves within the traditional paradigm then even the wealthy would balk at paying the real costs.

Don’t come to me about other “user fees” or taxes when $535 million of state motor fuel tax money is already earmarked for the construction of the lanes on I75 through Cobb. Lanes that even GDOT and SRTA admit will not pay for themselves and do not alleviate traffic for the majority. (The barrier-less system on I85 actually exacerbates traffic problems). Eliminate this stupidity and then we can talk about funding other transportation needs.

The Last Democrat in Georgia January 21, 2013 at 2:33 pm

The I-85 HOT Lanes aren’t a demostration project for an expanded network of more HOT lanes as the State of Georgia seems to think. The I-85 HOT Lanes are actually a demo project for a network of federally-imposed congestion pricing to be placed on all lanes of Metro Atlanta region freeways.

The Feds are planning to impose congestion pricing on all lanes of Metro Atlanta freeways because they know that the chances are slim-to-none that the State of Georgia will ever expand Atlanta-area Interstates to accommodate the increased amount of already very-heavy freight truck traffic that will generated by the pending expansion and continued fast growth at the Port of Savannah.

If the freeway system is not expanded to accommodate the increasing volumes of heavy freight truck traffic that will be generated by the Port of Savannah and other sources (the Gulf Coast, Florida, etc), the Feds are basically going to use congestion pricing on all lanes of metro Atlanta freeways as a means of pushing excess local 1 and 2-passenger vehicular traffic off the Interstates (and presumably onto passenger bus and rail transit) so that through traffic can move through Atlanta relatively-unabated.

The State of Georgia should be trying to build truck-only lanes as a way of separating and accommodating increasing volumes of already-heavy freight truck traffic instead of trying to build HOT lanes or “Lexus Lanes” that don’t pay for their own existence. That $535 million of state motor fuel tax money that is earmarked for the I-75/I-575 HOT Lane project is actually the equivalent of more than a year of roadbuilding funds for the entire state.

The Last Democrat in Georgia January 20, 2013 at 10:56 pm

“”Privatization holds great promise. Consider, for example, that U.S. airports and seaports are generally owned by governments, but many foreign airports and seaports have been partly or fully privatized. The World Economic Forum rates America’s seaports only 19th in the world, but the world’s second- and third-best seaports — in Singapore and Hong Kong — are private….””

“…I find Cato’s argument extremely problematic. Hong Kong and Singapore are essentially city states; they are not sprawling nations with many ports directly competing with each other.”

The Cato Institute has a very-legitimate point in questioning whether the federal government should be involved with port decisions. Especially in light of the overwhelming evidence that some of the world’s top seaports are private, including the world’s 2nd-best seaport in Singapore and the world’s 3rd-best seaport in Hong Kong.

In a political and fiscal environment where public funding for transportation infrastructure at both the state and federal levels is perennially increasingly scarce and diminishing, privatization is an option that absolutely must be very strongly considered and vigorously pursued.

If the public sector (government) can’t adequately-finance our logistical and transportation needs alone, then it should be a no-brainer that a perennially increasingly fiscally-constrained government partner with private investors to adequately and fully fund logistical and transportation needs.

Also, even though Hong Kong (which is part of China) and Singapore may be city-states, Hong Kong still competes directly with roughly 30 other major Chinese seaports while both Hong Kong and Singapore compete directly with each other and other major East Asian seaports for jobs and economic development.
http://www.fujitrading.co.jp/chinaports.html

Bill Dawers January 21, 2013 at 10:21 am

I’m not philosophically or economically against private sector funding of portions of port projects. But we need a national strategy for port expansions. Hong Kong and Singapore compete with other ports, sure, but at the time of privatization they were not competing against ports within their own countries. It’s just a weak comparison.

Btw, if a port like Savannah were privatized, there would seem to be very little likelihood of the dredging being funded since the project is so much more expensive and the channel so much longer than other East Coast ports. Why would companies invest here when there are other options nearby?

The Last Democrat in Georgia January 21, 2013 at 11:31 am

Having a “national strategy” for port expansion enables too much central control of the economy by enabling the federal government to pick winners and losers (which seaports get federal funding for expansion and which don’t). Having a “national strategy” for port expansion also enables overdependence on the federal government (witness Georgia begging a sometimes indifferent and at times hostile federal government for funding of the expansion of the Port of Savannah instead of coming up with the funding for such a vital piece of transportation infrastructure on its own).

The Port of Savannah didn’t expand because the government picked it to expand. The Port of Savannah expanded because the FREE MARKET picked it for expansion because of heady population growth rates and economic activity in the State of Georgia, which should not have to beg an indifferent federal government to fund its own critical pieces of transportation infrastructure.

Even if Hong Kong and Singapore were not competing against ports within their own countries in the past (Hong Kong was a free-market city-state controlled by the British for 150 years before reverting back to control by a communist China which did not have much of a free market economy until the last couple-of-decades or so while Singapore is an sovereign city-state), they still competed for jobs and economic development against other major Asian ports in places like South Korea, Japan.

“Btw, if a port like Savannah were privatized, there would seem to be very little likelihood of the dredging being funded since the project is so much more expensive and the channel so much longer than other East Coast ports. Why would companies invest here when there are other options nearby?”

Even if the Port of Savannah were privatized, companies would still want to invest there because of the overwhelming growth potential at that seaport. A seaport which is the fourth-largest container seaport in North America and the second-largest container seaport on the heavily-populated Eastern Seaboard whose continuing overwhelming growth potential is fueled by explosive population growth in Metro Atlanta and North Georgia.

There may be other options nearby, but Savannah is the only option that connects with the world’s busiest airport at Hartsfield and a Metro Atlanta region market which has been one of the fastest-growing markets in the Western Hemisphere over the last five decades or so.

Bill Dawers January 21, 2013 at 1:12 pm

“Only option”?

Wrong. The Corps of Engineers’ economic analysis predicts that the landside capacity of the Savannah port will hit capacity in about 20 years — with or without deepening. So the investment for dredging would pale beside the eventual investment necessary on land.

Charleston and Jacksonville’s ports could obviously serve Atlanta and North Georgia almost as easily as Savannah could.

IndyInjun January 21, 2013 at 2:02 pm

Bill, how much of Savannah’s ill-fated TSPLOST was earmarked for the port expansion or to support it? Was there discussion about using the discretionary funds? If so, how much? Do you feel like the state and federal funding assumptions included passage of TSPLOST?

Bill Dawers January 21, 2013 at 4:42 pm

It’s a good question. I detailed some of the moneys here: http://savannahnow.com/exchange/2012-07-15/whats-stake-chatham-county-t-splost-vote#.UP2zn6H3gX4 But if you’re not familiar with the area, those road numbers might not mean much.

Something over $100 million of TSPLOST revenue would have directly benefited road improvements near the port, which need capacity in some spots and desperately need grade separations at some railroad crossings. Another big chunk would have gone to expand capacity on I-16 from I-95 into the city.

If you’re talking about the discretionary funds in the TSPLOST vote, I don’t recall how much the county was going to use for what. I’d have to look that up.

I don’t think that the Corps of Engineers’ budget estimates considered or included possible road improvements. But it’s certainly likely that securing funding for the dredging will be even trickier if the state has taken no tangible steps to improve the transportation infrastructure.

Bill Dawers January 21, 2013 at 4:46 pm

Btw, Deal did last year at least mention the needs around the port when he talked about prioritizing transportation projects after most regions defeated TSPLOST.

The Last Democrat in Georgia January 21, 2013 at 3:09 pm

“Charleston and Jacksonville’s ports could obviously serve Atlanta and North Georgia almost as easily as Savannah could.”

Not quite. Charleston is over an hour farther away from Atlanta than Savannah while Jacksonville is nearly two hours farther away from Atlanta than is Savannah.

Savannah is a relative straight-shot of roughly 3 hours and 45 minutes away from a landlocked Atlanta via Interstates 16 and 75.

Savannah is the de-facto “Port of Atlanta”.

Bill Dawers January 21, 2013 at 4:28 pm

Shipping companies and shippers aren’t routing goods via slow-going cargo ships so they can save one hour of transit time on either end. Sure, they’d rather that hour less of spending money on gas but there are too many other variables to bother to detail here.

Also, many points in north Georgia — and pretty much all of them in northeast Georgia — are in fact reached as easily by car from Charleston as from Savannah.

The Last Democrat in Georgia January 21, 2013 at 9:15 pm

“Also, many points in north Georgia — and pretty much all of them in northeast Georgia — are in fact reached as easily by car from Charleston as from Savannah.”

…In some cases that may be true, but for the overwhelming most part Savannah is Atlanta’s link to the world by sea that is directly accessible by road (Interstates 16 & 75) and by rail via Macon.

Charleston may only be an hour farther away than Savannah by automobile, but Savannah is known as the virtual direct seaport link to the fast-growing Atlanta region market, a market of 6 million inhabitants that is more populous than the entire state of South Carolina whose population of 4.7 million.

Dave Bearse January 23, 2013 at 12:45 am

A good portion of that lesser hour or two moving on land is lost to more time on the water in negotiating the Savannah River channel.

The Last Democrat in Georgia January 23, 2013 at 2:27 am

Hey, nobody ever said that the location of the Savannah seaport is perfect, just that it is superbusy.

John Konop January 21, 2013 at 5:23 am

Putting the politics aside, the 3 biggest assets for economic growth we have in Georgia is the transportation system/location, Georgia Tech/Emory/ UG research engine and agriculture. When you combine this with strong public schools in the northern suburbs and strong private schools in the city you have a solid location to gain new business or expand……. The port is a major piece of the puzzle. We can get into an ideological debate for political purposes or solve the problem? This is the reality when we are talking about jobs…….And if we cannot control the political bs……on the above must of you will see in your paycheck, taxes………

IndyInjun January 21, 2013 at 10:56 am

What was a tariff other than a user fee paid in advance for use of a nation’s transportation system? I like user fees.

John Konop January 21, 2013 at 8:02 pm

I agree I like user fees vs taxes.

The Last Democrat in Georgia January 21, 2013 at 9:59 pm

Speaking of user fees, here’s a link to an article in the Atlantic Magazine about Oregon’s initiation of a V.M.T. (Vehicle Miles Traveled) user fee, the good, the bad and the ugly, on all fuel-efficient vehicles getting 55 miles per gallon or more.
http://www.theatlanticcities.com/commute/2013/01/oregon-pushing-ahead-road-use-fees/4434/

User fees are a concept that Georgians, particularly Metro Atlantans and North Georgians, should be getting familiar with because user fees, in the form of adjustable-toll congestion pricing, is what North Georgians are going to be paying to use the freeways if Atlanta region Interstates are not expanded to accommodate the increased amount of already very-heavy freight truck traffic that is expected to be generated by the pending expansion of the Port of Savannah.

Scott65 January 21, 2013 at 2:18 pm

What I dont see here is a discussion of the failure of GA’s congressional delegation to get the needed funding for the state. We elect our congressional reps to promote the interests of our state. If they wont do it, NC’s reps sure aren’t. I’d love to know how much work Rep Price or Broun have put into getting funding for the P.O.S. I’ll tell you…ZERO. They are so consumed with the national spotlight and proving they are the most conservative that they have forgotten what their job is…to appropriate. The problem is they left conservative behind a long time ago. There was a reason William F Buckley went after the John Birch Society (que up Tea Party) years ago…lest we all forget.
I am still waiting for someone to tell me why the national debt is a problem with any FACTUAL evidence. Truth is…nobody can because its a faux problem created to further an agenda that unfortunately for its creators has taken on its own life…and nobody in DC has the balls to say the Emperor has no clothes. The money supply is 4x larger than 4 years ago and inflation is nil and we still have high unemployment. Eisenhower created the Interstate highway system in the recession of 1957. Public works projects like the POS, transit, and other infrastructure (which produce on avg $1.6 for every $1 spent) are the investments our congressional delegation (R or D) should be pushing for and pushing for that money to come here to GA!!!
Unfortunately, as stated by Atlanta_Advocate… dont hold your breath

IndyInjun January 21, 2013 at 2:47 pm

“I am still waiting for someone to tell me why the national debt is a problem with any FACTUAL evidence. ”

No one can because the Fed can (and will) create money to infinity to buy up the $200 Trillion (per Professor Lawrence Kotlikoff) brew of official ($16 trillion) and unfunded debt, just as they created another $16 trillion to buy toxic mortgage bonds.

Those citing the bond market as a limiting factor somehow doubt the ability of the Fed to continue this, but with infinite money creation authority to buy bonds, there is no need for other bond buyers.

The cost isn’t in official taxation, it is dilution of the currency versus necessities, physical assets, and precious metals.

When and how this ends, who knows?

Scott65 January 21, 2013 at 3:08 pm

Inflation is the natural deterrent. The problem people dont seem to grasp is that to have inflation you
1. Have to be close to full employment (which means rising wages) where people have higher disposable incomes that outpace the markets ability to provide the goods people are able to purchase with their rising wages.

2. A commodity shock similar to the oil embargo of the 70’s.

Just printing money wont cause inflation in a liquidity trap. If the amount of goods are vastly outpacing the demand (housing, large durable goods for example) to buy them inflation wont happen. In fact, core CPI went down in the last period. So it ends with full employment. Then rates go up and there is monetary tightening. To be advocating for it now makes no sense, and it certainly makes no sense to be advocating for it in 10 to 20 years (what we are in essence fighting over now) because if we can get good sustained growth we will all have moved on to something else to argue about because there will be no deficit problem. The deficit is a MANUFACTURED CRISIS and I have seen nothing to convince me otherwise

saltycracker January 21, 2013 at 4:04 pm

good grief

mpierce January 21, 2013 at 4:13 pm

Inflation can certainly occur without full employment.

http://visualizingeconomics.com/blog/2008/08/24/inflation-vs-unemployment-martin-years

Printing money is a wealth tax upon the citizens stealing value out of everything we own. Inflation is masked as the yuan is kept artificially low and energy/food prices are excluded.

IndyInjun January 21, 2013 at 5:21 pm

No you don’t have to have full employment. When you get huge monetary largesse being funneled into the medical sector coupled with the retirement of the boomers, you get ENORMOUS inflation in an already-costly sector. Employment is booming in the energy sector too. These are the main 2 sectors with any growth at all and we are seeing outsized inflation in them.

We have inflation in necessities and disinflation/deflation in goods.

Scott65 January 21, 2013 at 2:28 pm

Also, whereas Hong Kong and Singapore are “private” they are HIGHLY regulated to the point they might as well not be. We dont privatize well here. From Park Atlanta upwards. There are always gotchas in these contracts (like a private toll road cant have anything competing built for 20 years…including transit). You dont trade the expedient against the long term…thats just stupid yet it seems to continue to happen and be promoted even

Nonchalant January 21, 2013 at 7:57 pm

If the State of Georgia owned Morris Island, my guess us that the State if South Carolina would be more amicable, and their Congressional delegation too. But we don’t, and they aren’t. Thus, let it not be forgot South Carolina was founded to provide rice to Carribean slave plantations, with all their cruelty and certainty of death, whereas Georgia was founded to be an asylum for mankind. That should make a small difference, yes? As well as Atlanta being the city too busy too hate, and South Carolina being…. South Carolina (though full of really good people).

Nonchalant January 21, 2013 at 7:57 pm

Of South Carolina, not “if South Carolina”.

FREESTYLE January 22, 2013 at 8:04 am

It is interesting to note that “Communist” China requires 50% private equity for port development projects, “Capitalist” USA wouldn’t think of spending anything but tax-payer’s money on any infrastructure (or anything else). I guess that is what “Capitalism” is, where capitalists get tax payers to cover all of their costs. I don’t think China could get private equity to invest a penny into a deep water river port – they haven’t. They have five hub ports, all on the ocean. In fact, there is no other deep water port in the world with a long, narrow, winding channel like Savannah’s. Of course, that doesn’t matter here, “never learn, never forget” should be Georgia’s motto.

Dave Bearse January 23, 2013 at 12:41 am

Need a few hundred million for port dredging because the feds won’t pony up?

Ax the $50M a year tax credit scholarhip.

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