Transportation Bill Update

This morning the House bill that would consolidate gas taxes across the state to be used exclusively for transportation had it’s first subcommittee hearing.  Rep Al Williams opened noting “I haven’t seen this many people at a subcommittee meeting since dog hunting.”  The room in the CLOB was at capacity.  It’s no secret that the bill – an admitted work in progress – has a large amount of interest.

Committee Chairman Jay Roberts presented an overview of the bill.  He noted that the study committee which he was co-chair held 8 meetings around the state, with public comment available at each.  He noted no one who wished to speak was turned away.  Much later during Q&A Rep Mark Hamilton, also a study committee member, asked Roberts where the $5 Billion dollar tax increase was that he keeps getting emailed about, drawing chuckles from many in attendance.  Roberts noted that the folks sending the emails (we’ll assume we’re all taking about the spam coming from Nathan Adams) attended a single meeting.  Roberts also noted in his remarks that he and those working on the bill are still open to listening, but they only have time for those who wish to be constructive.

Roberts had two main points he wanted to clarify due to uncertainty and/or misinformation since the bill’s release last week:

1)  All sales taxes on motor fuels currently being collected as part of any SPLOST or one that would pass by July 1st would remain grandfathered and continue to be collected under this bill.  None of this existing money would be lost that is currently funding a SPLOST.

2) Going forward, the key point of this bill is philosophical in that all taxes collected on motor fuels would be used to fund transportation. Period.

New GDOT Commissioner Russell McMurry brought an updated PowerPoint similar to two used by former Commissioner Keith Golden to help “quantify the need”.

Roughly, the annual amount needed in addition to existing funding is between $2.1BN and $2.6 BN, as follows:

Pavement Resurfacing                                $128M

Bridges                                                           $456M

Routine Maintenance                                  $200M

Traffic Operations                                          $35M

Intermodal                                                      $221M

Total Unfunded Capital Needs                  $1,047M

Managed Lanes                                             $60M to $500M

Note that the first three items are not new capacity, but just taking care of these “roads we’ve already paid for”.  And they total just under the $800M that the current House Bill raises in recurring revenue.  So before we start talking about which of the projects in the $1BN of annual unfunded capital needs get chosen, we really need to find that billion so that the argument is productive.  $800M only takes care of what we currently have.

Other numbers that matter as highlighted by McMurry:  55% of Georgia’s current $2.2 Billion GDOT budget comes from the federal government.  The Federal Highway Trust Fund is operating on a temporary authorization, and there’s great uncertainty on when it will be renewed/reauthorized – and how much funding will continue to flow to Georgia.  We’ve already allotted all but 47.5M of this year’s federal funds.  It’s possible/likely that we won’t see more federal money until October, the next Federal Fiscal year, presuming that no fix in the Highway Trust Fund is approved until the next major approps bill.  McMurry noted that Tennessee has stopped all contract letting already for the same reason.  Georgia only has the money on hand for minor contracts or emergencies.

There will be another meeting of the same subcommittee at 2pm Monday afternoon.

12 comments

  1. Chamblee says:

    Just wanted to reprint what this looks like while reading with the “dictionary of numbers” chrome extension. Gives a whole other interpretation to that “million here, million there…” quote.
    Items in [ ] are inserted by the extension.

    Roughly, the annual amount needed in addition to existing funding is between $2.1BN [≈ Cost to buy the world a coke] and $2.6 BN [≈ cost of B-2 bomber], as follows:

    Pavement Resurfacing $128M [≈ net worth of Dr. Dre, rapper, 2011]
    Bridges $456M [≈ net worth of Jay-Z, rapper, 2011]
    Routine Maintenance $200M [≈ Mitt Romney assets in 2011]
    Traffic Operations $35M [≈ US Chamber of Commerce election spending in 2010]
    Intermodal $221M [≈ Typical endowment, research university]
    Total Unfunded Capital Needs $1,047M [≈ box office sales of The Jungle Book, 1967]
    Managed Lanes $60M to $500M [≈ net worth of Jay-Z, rapper, 2011]
    Note that the first three items are not new capacity, but just taking care of these “roads we’ve already paid for”. And they total just under the $800M [≈ box office sales of The Godfather, 1972] that the current House Bill raises in recurring revenue. So before we start talking about which of the projects in the $1BN [≈ box office sales of The Exorcist, 1973] of annual unfunded capital needs get chosen, we really need to find that billion so that the argument is productive. $800M [≈ box office sales of The Godfather, 1972] only takes care of what we currently have.

    Other numbers that matter as highlighted by McMurry: 55% of Georgia’s current $2.2 [≈ cost of US-Mexican War] Billion GDOT budget comes from the federal government.

    • saltycracker says:

      No lottery comparison ? Well at least the wish list goes to the best bid of a group of bidders.

      That begs the question of what tens of millions in “requirements” are in the bids that do not serve the public and some significantly increase the costs after the awards. I can mention a few shockers but…….

      So we could probably save a significant amount of the estimates if the mood struck on top of the recent materials cost drops.

      • South GA Bulldog says:

        You had a good point about the fact the price should drop if the inputs go down. I ask around and found out that there is an index that actually allows for that if asphalt drops then GDOT gets a break. From what I am told most contracts are awarded sometimes way in advance of the project start date. This was a compromise from years ago when the price of asphalt had jumped do to surging oil prices. They wanted an index to help offset some of the increase from when they actually bid on the contract until the time they could actually start. So, the change was made that if prices go up there is an index but also if the price goes down there is an index. The person that I talked to also noted that you could pave about 5 miles of road for 1
        Million Dollars today compared to 28 Miles of road in 1971 which was the last time that the motor fuel tax was adjusted. Just some information that I thought was interesting.

        • saltycracker says:

          Today there are convoluted requirements/conditions for acceptable bidders, who they hire and if connected, the ability to get advanced payment for equipment to do the job…..that’s scratching the surface……We depend on our public workers to do their best for the public….

  2. polpol says:

    Need some clarification here…….how is the MARTA tax treated by this legislation, and the new committee sub, which was not acted upon today seems to allow local school boards to continue to apply sales tax to motor fuel as constitutionally an excise tax restricted to use for roads and bridges does not help them in any manner at all……

  3. polpol says:

    To further add to the complications of this legislation, it appears that there will have to be a very late session confluence of the taxation policy in the transportation taxation bill, and the FY 16 Budget, or else these new excise taxes will flow to the DOT without legislative guidance or direction on how these funds are to be allocated….

  4. saltycracker says:

    Charlie

    Some random thoughts. In heading to the North Point Mall area up 400 we noted some stores were closed and moving to Avalon, the latest retail sensation in the north burbs owned by the Atlantic Station developers.

    We then begain discussing all the empty commercial around Atlanta and new ones sprouting everywhere. Is it sprawl from poor land use ? Capitalism at work as retailers get more appealing ? Is it the lack of impact fees to raise the money for the necessary infrastructure ? Or is it clever developers working with politicians to spread the costs to the general population ?

    In Avalon’ s case the city cut a sweet property tax deal for a retail and apartment developer to get something going in a prime location caught in the real estate downturn.

    http://rootsinalpharetta.com/2013/06/avalons-tax-abatement-incentive-or-icing-on-the-cake/

    Now the question is how do we get money from everyone to improve the roads. Raise our taxes ?

      • Dave Bearse says:

        Why pay for what you can get for free?

        The cheerleaders can say what they will about a rebounding economy, but as a commuter to Gwinnett, I pass hundred of thousands of square feet of empty and near-empty less than 30 year old buildings every day.

        As we all know, the developers get the privatized profit upfront, and for the most part are then gone, leaving the public with the risk.

  5. Rambler14 says:

    From AJC:

    The first version of the transportation funding bill was panned by local government leaders who said it would hit them hard. Also, it wouldn’t have raised nearly enough money. The bill’s sponsor, Rep. Jay Roberts, R-Ocilla, will present changes at a 2 p.m. meeting today in room 406 of the Coverdell Legislative Office Building.

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