Understanding How Georgia Funds Transportation

A new video from PolicyBEST tries to explain how transportation, especially roads and bridges, is funded in Georgia. Breaking down how the tax money Georgians pay for motor fuel is spent is important as the legislature considers House Bill 170, the Transportation Funding Act.

The video explains how 40% of the excise and sales taxes collected at the pump is spent on non-transportation related purposes. While the state collects a 7.5 cent per gallon excise tax and a 3% sales tax, totalling around 16.3 cents per gallon, the fourth percent of sales tax, or fourth penny, and local LOST and SPLOST taxes account for 11.2 cents per gallon.

When you add in the federal excise tax of 18.4 cents per gallon, Georgians pay 45.90 cents per gallon of gas, compared to the U.S. average of 48.29 cents per gallon. At the surface, Georgia’s tax is less than neighboring states Florida and North Carolina, and more than Tennessee, Alabama and South Carolina. But, when you take out the money not spent for transportation purposes, the effective rate of 34.70 cents per gallon is lower than Tennessee’s 39.80, Alabama’s 39.27, and South Carolina’s 35.15 cents per gallon.

The $1 billion actually raised by the state excise and sales taxes is supplemented by $1.2 billion from the federal Highway Trust Fund. The $2.2 billion the state spends on roads and bridges is far less than Florida’s $5.1 billion and North Carolina’s $4.3 billion. And while per-capita highway spending in the United States is $491, in Georgia it’s $296, making the Peach State dead last in the amount we fund surface transportation.

41 comments

  1. Al Gray says:

    TFA is an immediate 38% tax increase, which will compound at rates (based upon announced CAFE standards alone and no cost inflation) of 4-5% a year, imposed on people whose incomes have risen less than 2.2% for a decade by a legislature and governor sworn against raising taxes.

    There is no more destructive force in home economics than a double-digit (the combined effects double the taxes over the first decade) cost increase that is matched against low single-digit income increase.

    Yes, the money is needed, but bills like this will decimate the people by taking food off the table to award an unreformed agency less than 6 years removed from an accounting scandal.

    The only concessions in it have been for the local politicians, not the people of Georgia.

    Spin away. It is what it is.

      • Al Gray says:

        Please explain to the people of Georgia how they can realistically expect to make up these cost increases with net pay increases.

        Specifics? Since this is of overarching importance, cut the state budget across the board to make it up or take the funds from whence they were being diverted on a matched phase-in and phase-out basis.

        Over in Augusta, some amazing results were gotten when a bunch of busybodies dug into its contracts. Do a open-books effort like that on DOT. There was only shuffling of top management in the aftermath of the 2008 and 2009 accounting scandals in which the basics of reporting contract commitments were blown.

        As an aside, but relevant to how hideously large transportation taxes are relative to incomes, some accommodation also needs to be made for the counties with TSPLOST in effect. That one was a 14% tax increase.

        • TheEiger says:

          “Please explain to the people of Georgia how they can realistically expect to make up these cost increases with net pay increases.” Well, the price of gas has dropped from $3.30 6 months ago to $2.30 today. So the doom and gloom you are talking about is just in your mind.

          “Specifics? Since this is of overarching importance, cut the state budget across the board to make it up or take the funds from whence they were being diverted on a matched phase-in and phase-out basis.” Cut the state budget across the board by how much? I’m all for cutting government spending. I will just tell you that you cut cut deep enough to make the improvements we nee d in transportation. It ain’t there. But by all means, let’s cut away. But lets stop using that as the end all solution because it’s not.

          “As an aside, but relevant to how hideously large transportation taxes are relative to incomes, some accommodation also needs to be made for the counties with TSPLOST in effect. That one was a 14% tax increase.” How much do you pay monthly for internet/tv and cell phone? Now let’s figure out how much you pay to use the state’s roads.

          • Al Gray says:

            At $2.30, the % of increase is WORSE, but since most discussion here has used $3.30 to $3.40 per gallon, that will do.

            Also, you ignore the sales tax rate increase on everything else to provide compensating revenues to school systems and local governments losing revenues via these changes.

            And it is coming at the hands of a party sworn against tax increases.

            • TheEiger says:

              So do nothing right? When people want things, the answer from government quite often shouldn’t just be “no”. It should be “hell no.” When it comes to transportation, this is a key role of government. Money should be spent on it. More than we are spending now.

              “Also, you ignore the sales tax rate increase on everything else to provide compensating revenues to school systems and local governments losing revenues via these changes.” So again, your answer would be to do nothing. That doesn’t work for me. Local governments need to look at what they need and what they want. I promise you there are a lot of things that local governments are claiming are needs and are really wants. They should look through their own budgets and make that determination. If it truly is a need then figure away out to pay for it.

              • Al Gray says:

                Make it a clean bill that replaces the local taxes collected on motor fuels with NOTHING and does it as they are phased out and I have no argument, other than that TSPLOST counties are being double hammered.

                  • Al Gray says:

                    You have a point. The people here have substantially refused to pay that penny.

                    A snake eating its tail is not pretty, but seeing a government do it to its “end” result is amusing to anyone who believes in math.

    • benevolus says:

      I think there is supposed to be another part of the equation.
      Better transportation is supposed to lead to more and better jobs, better productivity, and even a better quality of life.
      The consequence of not maintaining the infrastructure is declining productivity, fewer jobs, and lower paying jobs, and less time with your family!

  2. gt7348b says:

    Why can’t we just call this bill the GDOT Funding act because that’s what it is by relying on shifting to the excise tax? This bill won’t solve transportation funding because GDOT will still only pay for roads and bridges and continue to resist funding other transportation needs such as airports, transit operations, etc. This bill does nothing to address transportation needs, only road needs.

    • TheEiger says:

      What percentage of Georgia taxpayers use roads? More than a large majority. Roads are important.

      • Al Gray says:

        So is putting food on the table – food costs are impacted by the sales tax increases in this bill.

        • TheEiger says:

          Roads aren’t free. I believe that one of the few roles of government is to build and maintain roads. I’m willing to pay more knowing that a dedicated revenue stream is going to do that. Sorry that offends you so.

          • Al Gray says:

            The economic warfare against the middle class with enormous layered and pyramiding tax increases not met by income gains doesn’t “offend” me as long as I can cut spending in the affected areas faster than the “No-Tax” politicos raise taxes in them.

            The point that the fake conservatives under the Gold Dome miss is that all of the tax increases they are piling on and the enormous Vogtle-cost-overrun-boosted electricity rates, which these new taxes compound, are putting huge disincentives for consumer spending that they are relying upon to boost those very same tax receipts.

            • John Konop says:

              I heard an interesting idea….why not charge based on usage…..we could set up a tax ever year based on miles driven by your vehicle at the emissions shops. The shop could send the usage to the tax department as part of your renewal bill…. If you do not pay you cannot renew….This way people would contribute based on how much they use the roads..

              • TheEiger says:

                Or you can just pay by how much gas you use. The gas tax is the ultimate user fee. It’s the same thing and the government isn’t tracking your movements. I understand that there are electric cars that use the road. If you want to buy an electric car then charge those people a different way to use the road. Like with miles driven.

                What is wrong with your plan of tracking just state of Georgia residents for miles driven is we miss out on all of the people driving through our state using our roads, but not paying that tax. Think of all of the snow birds and truckers that drive through Georgia. All of those people are lost GDOT revenue under your plan.

                  • TheEiger says:

                    So… this is still the government tracking your movements? I’ll pass. They already know enough about me. They don’t need to know how many miles I drive. The next thing will be to break the number miles you drive into tax brackets like the income tax. Not a good idea. Do you buy gas? Yes? Then pay a tax on it. Buy more gas? Pay more in tax. Let’s not over complicate this.

                    • gt7348b says:

                      Actually, the privacy issue is one the largest obstacles facing the adoption of this technology. FWIW, I’m neutral because even if the government has the data, they don’t know what to do with it. Also, the gas tax doesn’t address the rise in electric and hybrid vehicles as well as increasing fuel economy that cuts down the effective rate of return (as GDOT and others have demonstrated). Was just trying to point out that VMT taxes have already thought about and addressed the issue of pass through traffic.

      • gt7348b says:

        I’m not saying roads are not important, let’s just be honest that this is a GDOT funding bill. Locals also pay for roads and this proposal does nothing for local government controlled roads who are not receiving any increases in funding. For instance, the majority of projects on the March 17th Atlanta Bond referendum are transportation projects. Additionally, this proposal wouldn’t do anything to help improve our freight rail network which is critical to the functioning of Savannah Port. Two projects that seem to have merit are the Cordele Inland Port and improving the fluidity of Howell Junction – perhaps the biggest freight rail bottleneck east of the Mississippi. http://www.bizjournals.com/atlanta/stories/2010/09/06/story6.html?page=all. Both North Carolina and Florida DOT’s fund things other than roads and bridges and if Georgia wants to compete, I think it should start doing the same. Funding GDOT through a method that is constitutionally restricted to roads and bridges does nothing to address the overall competitiveness issue. Additionally, I’m not suggesting that we start spending any new funding on a passenger rail network, but that we consider a funding source that is flexible to meet any transportation need. Afterall, does any one else find it a bit rich that when we are discussing the need for new funding (which this video documents well) that GDOT announces the $1 billion interchange reconstruction at 400/285?

        I guess my frustration is that just funding GDOT is not going to fix the transportation funding and investment issue in Georgia and I wish we would acknowledge that fact. I know it is wishful thinking, but I wish our legislators had the maturity to acknowledge that there needs to be an increase in overall funding that is flexible enough to be used on any worthy transportation project, not just roads and bridges. The only existing methods at their disposal seem to be either a sales tax increase or income tax increases – both of which I know are non-starters. Hopefully this clarifies my thoughts on why just funding GDOT is not a solution to our transportation funding issue and seems to have been lost in the discussion of HB170.

  3. Al Gray says:

    As a counterpoint a piece needs to be posted –

    Understanding How Georgians Fault Taxers

  4. eburke says:

    Three regions of the state have already stepped up and are shouldering their share of the cost for needed Transportation improvements. Now we are being asked to pay for the needs in the rest of Georgia. Our fellow citizens and their elected leadership need to take responsibility for the Transportation in the rest of the State. Don’t ask us to tax ourselves for our roads then you tax us again for your roads….

    • Ghost of William F. Buckley says:

      eburke – I never contemplated your valid point, since I do not live in one of the three regions that decided to self tax. I’d be hopping mad if I lived in Savannah, or another area, and had to double pay for Atlanta, though.

      TheEiger asks Everyman for a solution, which is a great idea – Somewhere early on in the brainstorming portion of this type of project. Now that an esteemed committee has met, ideas have gelled, and the framework of this ‘plan’ are being unveiled, people are voicing their objections.

      I find TheEigers comment to be untimely and insulting.

      A decent plan starts with some of the very sound ideas that longtime commenters and transportation experts have brought out in this thread. No tax, but first squeeze GDOT with performance and efficiency benchmarks. Not as an afterthought, but as a start, before talking about ‘only a penny’ in tax.

      Widened GDOT scope beyond bridges, etc.

      Not only that, it APPEARS suspicious that some of the writers here are involved with an advocacy group trumpeting this plan as if it were really a panacea. I think it is a sputtering start, yet, like TSPLOST, many people do not trust GDOT to efficiently manage the use of our money. I am not too sure I trust them with any new revenue, either.

      BTW, has PolicyBEST derived revenue from any aspect of this process, be it the Bill or anything else?

      • TheEiger says:

        “I find TheEigers comment to be untimely and insulting.” I can’t really say I’m sorry that you are insulted because I’m not. I like solutions and have a serious lack of patience for complaining about problems without talking about how to fix them.

        Is this bill perfect? No. Is it a start? Yes. It’s time to crap or get off the pot. We have been talking past each other for nearly a decade on how to fix transportation and transportation funding in Georgia. This will help. If you are so highly offended and insulted you should go play in the sand pit with the little kids and leave fixing big things to the grownups.

  5. androidguybill says:

    @Ghost of William F. Buckley:

    I find your comments to be untimely and insulting.

    “I’d be hopping mad if I lived in Savannah, or another area, and had to double pay for Atlanta, though.”

    You are aware that Atlanta pays for MARTA, Hartsfield and has to put up with the absolute nonsense that is the downtown connector? Do you have any idea how much more money Atlanta would have to meet its own infrastructure needs (not to mention various wants) if the state or the surrounding suburban counties were to pitch in to help pay for the infrastructure that it gladly benefits from?

    It is revolting. Cobb, Gwinnett and everywhere else in metro Atlanta talk up Hartsfield and MARTA when recruiting companies on one hand, and then they brag about their low tax burdens – because they don’t have to pay for MARTA and Hartsfield – on the other. And another thing: Atlanta has neighborhoods in it that have the highest incomes in the entire state. Even the “low income, economically depressed, high crime” portions of Atlanta have higher incomes and generate more in property taxes than 60% of the counties and cities in Georgia. So trust me, no one is “double paying” for Atlanta. The reverse is true: tax money from Atlanta gets redistributed to the rest of the state, and the rest of the state benefits from the infrastructure that Atlanta built and maintains. Since everyone is convinced that the converse is true, I actually wish that all tax revenue that gets raised in Atlanta would stay in Atlanta and everyone else were to be left to fend for themselves.

    Yes, this includes this transportation bill, which for the most part would take gas taxes generated in Atlanta and spend it on suburban and rural highways that Atlanta residents rarely (if ever) ride on. If this plan does not include help for transit – especially since Atlanta already pays their first penny for MARTA – it will be another fleecing of the city by folks who won’t even acknowledge it, let alone be grateful for it. Like that tax they are trying to impose on people with alternative energy vehicles. Who buys those? Educated, high income urbanites who pay more than their fair share in taxes already because they have three times the income of many an exurban or rural TEA Party supporter.

    This type of willful detachment from reality is why nothing ever gets done in this state. Yes, it was the folks who supported T-SPLOST who predicted that precisely this would happen: that it would be better than anything that replaced it, and that “anything” would most likely be nothing. If this flawed proposal fails to go through, don’t expect Nathan Deal, who will be 0-2 on transportation, to sidle up to the batter’s box. He will spend the rest of his term focusing on education reform, criminal justice reform and trying to get any and every company to relocate here that he possibly can. Which means that nothing will be done on this issue until 2018 at the earliest, and even that is assuming that we don’t somehow get stuck with a Democrat governor and a Republican legislature, in which nothing would get done until 2022.

    • Al Gray says:

      The Savannah/Chatham County and region decisively defeated TSPLOST despite all of the hoopla over the funds that the Port of Savannah would get.

      The tax increase with this TFA bill relates to city, county and education system LOCAL taxes, not one penny of which is redirected to or from the Atlanta metro area.

      The state sales taxes being collected on motor fuels just gets directed back to transportation. The rest of the state won’t buy that Atlanta-based tax collections on motor fuels have been diverted to us, because we have 25 year-old DOT projects that either the counties had to undertake with SPLOST funding or that had to wait for TSPLOST funds to complete the funding.

    • MattMD says:

      I understand the MARTA tax paid in Fulton/DeKalb and Atlanta but I’m pretty sure the airport is funded by user fees charged to fliers and the airlines.

      Outside of current status with MARTA, I don’t get the point in splitting up Atlanta from the surrounding counties when you consider major interchanges, arteries and interstates are in Cobb and Gwinnett. I understand how taxes undoubtedly flow out of the region as a whole.

    • Ghost of William F. Buckley says:

      If you think that resolving the downtown connector is going to come of this effort, you’d better back Curt Thompson’s version of the MJ Bill – ‘Cause you are already there.

      Just short of a Boston Style Big Dig, the Connector issue is not going to be resolved easily, if ever, in any conceivable time frame. People will move intown, stop commuting before that, or cars will become illegal.

      My point here today is this Bill doesn’t go far enough to address the basic issue of whether or not GDOT can actually resolve these problems. They are bloated, inefficient, and frankly lack the proper scope. Has nothing to do with Taxed Enuff Already.

      TSPLOST MIGHT have passed if people believed in the list, that GDOT wouldn’t squander the money on more studies, salaries, and waste.

      It did not pass because people did not believe GDOT deliverables would materialize. Yes, TEA party had a bigger influence, but most voters never looked at the list as real.
      For instance, one of the BIGGEST line items was the GA400/285 connector, paid largely by FED funds in ’24. Now we are doing that ourselves. Miraculous, huh?

      I support Gov. Deal, and I support any effort to improve our transportation. If this is the best we can do, it will be a start.

  6. Ghost of William F. Buckley says:

    I am pretty short on patience as well, TheEiger. There are many reasons that things do not get done – But blaming it on business or voters is pretty low on the list.

    This Bill moved a bit today, let’s see how far along it goes before getting your knickers in a twist. The ridiculous idea of allowing up to 6% local tax increases was already removed, so the system worked pretty well.

    You really need to look at some of the specific recommendations made here today. There are sound.

    You asked for ideas, got some, didn’t like them, and then got snappy – I simply hope you are not actually involved in any grown-up discussions because with a mercurial temperament like that, you are part of the problem…

    • TheEiger says:

      We have been talking about this for years. Time to get something done. This is a good step. You were the one that was insulted. Not me. I’m just tired of everyone’s complaining about the solutions that have been put forth but have no idea what to do instead. I poked holes in some of the solutions mentioned on his thread because they aren’t real solutions. You can say what you will about my temperament, but I get things done. Sitting on the sidelines and moaning doesn’t work for me.

  7. Al Gray says:

    If that was a jab at me, you don’t what the **** you are talking about. I have never been one for “sitting on the sidelines.” If DOT would open its books and somebody pay my travel and living expenses, I would go to their offices and show how to fix the messes that you all put off limits.

    I am a very frugal person and I get riled at the imperious attitude that common folks held to less than 2% income growth for more than a decade just have to “suck it up” to pay a more than doubling of a tax, when the folks spending said tax increase are known to be incompetent, inefficient, and unreformed.

    Your “solution” is passing an enormous tax increase and putting it in hands that are guaranteed to squander it and that is no solution at all.

    • TheEiger says:

      How many of the transportation meetings did you go to? Did you pick up the phone and call your rep or senator or anyone for that matter over the past year to talk about what can be done to fix this issue? Did you a write a letter explaining a solution that you think will work to one of your elected officials? If not? You are sitting on the sidelines and complaining on a blog. If you did I apologize for saying that you are one of the ones sitting on the sidelines.

      Did anyone take time to watch the video? Are you all saying it’s one big lie and that we don’t have an issue with transportation funding? Right now we have to beg the federal government for more money every year just to pave our roads and make minor road improvements. That is not a solution that will last.

      • Al Gray says:

        I attended the Joint Committee hearing in Augusta on September 30 and addressed the members, public, DOT officials and myriad contractors who are hoping this TFA passes. Unlike the assurances that you get on PP, the presentations by opponents, including a very powerful one by the executive of a convenience store/gasoline retailer, were not posted on the Committee website.

        I indeed alerted county commissioners in 3 counties, contacted my state senator, went on 2 talk radio stations multiple times, and spoke on this matter to the Columbia, Richmond, and Lincoln County commissions.

        As to public activism, a loose confederation of us just spent 3 years beating Augusta/Richmond County like a drum, saving the poor beleaguered citizenry $tens of millions. I was proud to have been at the center of that effort.

        Government tax eaters don’t give a damn about reform or efficiency, they just want the money. There are entirely too many apologists out there and a legislature that meets only 40 days a year, meaning that there is no counterbalance politically, only a rush to feed the pigs.

        Having discipline to account for contract commitments is basic to contract accounting and the fact that DOT failed in that regard to the tune of a $billion and yet has gone unreformed, bloated, and overreaching means that shoving more money there is irresponsible.

          • Al Gray says:

            Thanks. I agree that there is a tremendous need for transportation spending and, prior to TSPLOST passing in this region, my position was that the fuel tax was the way to fund it. However this bill does not just redirect taxes collected on motor fuels, it replaces them with new taxes and the % increase is destructive of family finance. Then there is the sorry record of DOT here with TSPLOST, which should give pause to everyone.

  8. Ghost of William F. Buckley says:

    Just to pile onto Al Grays’ comments.

    I have a simple example of how GDOT fails to maintain newer, costly bridge structures, with very low effort or expenditure.

    Have you ever seen the highly invasive Trumpeter Vine growing out of the side of bridge abutments? This vine grows to be thick and strong and seriously undermines the heavy concrete plates that cover abutments. In time, they will fall onto someone or something.

    Have you every noticed how unpainted metal corrodes, causing rust deep into the structure?

    I have on countless bridges throughout the Metro. Silly little problems that become expensive, multiplied thousands of bridges and structures and you have W A S T E. Is there an ongoing effort to resolve these maintenance tasks?

    While I am pleased that folks are effective at ‘doing something,’ it would be even more useful and efficient if the folks actually tasked with doing these menial tasks, actually did these menial, yet important tasks – On the budget they currently enjoy.

    Please go on and pass this effort, it is better than no effort. But don’t confuse rain with someone urinating on my leg.

    • TheEiger says:

      The bill as written gives GDOT the money and ability to go back to a regular maintenance schedule to fix the things you just mentioned before they become costly. Right now we have to choose between maintaining what we have and new projects. This is a start and a good solution for the maintenance of what we already have.

    • GTKay says:

      Ghost, your “simple example” of “(s)illy little problems that become expensive, multiplied [by]thousands of bridges and structures” is not accomplished “with very low effort or expenditure.” This is the type of necessary maintenance that has, with countless others, suffered from underfunding. “Is there an ongoing effort to resolve these maintenance tasks?” Yes, but they can only get so much done with the funds that they have. You yourself said that there are thousands of bridges and structures to maintain in the metro area. Doesn’t sound simple to me even with the right amount of funding. No one seems to understand the massive amount of maintenance our network requires.

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