Georgia’s Transportation Problem Has A Clear Solution

Guest post from Michael Sullivan, President & CEO of the American Council of Engineering Companies in Georgia and also the Board Chair of the Georgia Transportation Alliance. 

As a rule, engineers are rational, logical, problem solvers. They see challenges, analyze options, and ultimately offer solutions designed to achieve a specific goal.   Sometimes, the solutions are evident while others require extensive research to determine the best path forward. While it may take an engineer or two to ultimately build the roads, bridges and rail lines our state needs, it does not take one to figure out the clear solution for Georgia’s transportation funding needs. 

The problem is not with our project delivery system. Georgia’s Department of Transportation is ranked among the best in the nation for delivering projects on time and within budget by the Bureau of Transportation Statistics.

The problem is not that we don’t have a plan. The state and each of Georgia’s metropolitan planning organizations maintain long-term transportation and capital improvement plans that are updated regularly and go through stringent review processes along the way.

The problem – and the solution – is funding. 

Our state’s transportation system consists of nearly 120,000 miles of public roads and highways. Much of that infrastructure was built many decades ago and is nearing the end of its useful service life cycle. Within the next twenty years, 80% of those roads will be classified as “fair” or worse in condition, in large part because current funding levels only allow for 2% of those roads to be resurfaced each year. Georgia has over 4,000 bridge structures that will need to be replaced over the same period of time at a current cost of over $560 million dollars, repairs that really should not wait given that one in six bridges are already considered unsafe for the loads carried over them today.

These maintenance and repair problems put the safety of Georgians at risk and they also come at a real cost. The transportation research group TRIP estimates that current road conditions cost the average family between $750 and $2,000 annually as a result of increased vehicle operating costs and congestion-related delays.

A report conducted last fall by the national transportation consulting firm HNTB determined that Georgia needs to add a minimum of $1 billion to $1.5 billion in dedicated annual funding just to preserve our existing infrastructure. The number grows as high as $5.4 billion to create a truly optimized transportation network.

Fortunately, the members of the General Assembly will soon have the opportunity to vote on legislation that would create the $1 billion to $1.5 billion in dedicated funding required to increase maintenance cycles, address safety concerns, and alleviate growing congestion. Bills have already been passed by both the House and Senate that each included viable options to meet this critical need and a conference committee has been charged with working out a compromise solution that can be agreed to by both chambers.

But solutions are only effective if they are implemented, so it is critical that the General Assembly take action before they adjourn. If they don’t, we face at least one more year when repairs remain delayed and problems only worsen. This is why our organization has asked members of the General Assembly to vote in favor of creating a new stream of sustainable and dedicated funding and why we encourage our fellow Georgians to do the same.

Transportation is the circulatory system of our economy and has always been one of the critical components of Georgia’s economic growth and vitality. Whether it’s getting Georgia grown or manufactured products to market, connecting communities across our state, or being able to get from Point A to Point B safely in a reasonable and predictable commute time, investments in transportation infrastructure benefit us all.

The problem is clear. The solution has been identified. Now is the time to act.  Our state simply cannot afford to wait.

 Michael Sullivan is the President & CEO of the American Council of Engineering Companies in Georgia and also the Board Chair of the Georgia Transportation Alliance. 

28 comments

  1. Sounds to me if the Gov and Legislature wanted the DOT to do more projects, they would have added it to the budget.

    Cagle doesn’t want a tax increase on his record for when he runs to replace deal.

    And Deal doesn’t want to cut any of his other boards’ funding.

    So… It seems to me like it’s an executive problem.

    There were also 4 other ways to fund transportation from the study committee.

    And why is MOST / LOST a part of the equation? Perhaps the Transportation Lobby (i.e. the Sullys of the world) should be happy with moderation – converting State sales tax to excise, and pricing it at $.19.

    Then, pressure the executive on reforms around the LMIG grant, point of sale data for SPLOSTs (to validate the user fee argument), budget for more capital projects, and show us a budget that actively removes the 4th penny from the general fund, and puts it to Trans.

    To me, the trans lobby is trying to rally their troops, but are falling short, simply because transportation is not a priority of elected officials.

    • Charlie says:

      We have one budget line item for GDOT. It’s the amount collected by the motor fuels tax.

      Both the House & Senate bills move the “4th penny” back to GDOT where it belongs. That’s roughly $200 Million out of the budget. i.e., added to the budget. Also, this part is “not a tax increase”, as it’s existing funds, used where they’re supposed to have been all along.

      The Constitution specifically calls for motor fuel taxes to be used for roads and bridges. If the 7.5 cent excise tax had been indexed for inflation when it was set, it would be 43 cents today. If the same percentage of the price of that excise tax (on a 36 cent gallon of gas), the excise tax last year would have been 70 cents per gallon.

      The histrionics over recalibrating a gas tax to .29 cents aren’t based on a discussion of need, merit, or with any sense of history of how the buying power and burden of this tax have declined over time, but are in stead based solely in ideology that refuses to consider any actual metrics or numerical fact.

      • ryanhawk says:

        Speaking of facts and merit what do you think of GDOT’s 100k demand in response to Rep. Regina Quick’s open records request?

        • Charlie says:

          I’m told it will take 6 months to get what she asked for. Beyond that I have no idea what she specifically asked nor what is involved.

          I do, however, have summaries of GDOT’s audits since 2010. I noted that Quick and a few others were circulating a WSB story from early 2012 about the 2010 audit. I would think if a legislator was interested in fact and merit, they would be looking at the summaries since 2010 (well documented, well publicized problems back then) to show how far that agency has come in turning itself around.

          Or, someone that has an interest in something not passing could just circulate a 3 year old news story about a 5 year old audit. And then do an open records request that would take months to complete a few days before a critical vote – despite showing no interest in this process which has been a year long one.

          • ryanhawk says:

            Well if you don’t know what she asked for how can you know if a six month response time is reasonable? The kabuki theater of this “year long process” doesn’t impress me. We’ve all got to make a living somehow.

            • georgiahack says:

              As someone who has filed numerous open records request from state agencies, from what I read about her request is that it sounds extremely broad. Also, while it might take one person a few weeks or months to get this together for her, that person also has a job to do in that agency and won’t be able to spend all that time doing the searching work.

              When I have made a requests that have come back with high price tags (once got quoted 80k for a search) I usually use the response to help me craft a better request that will limit the cost and time.

            • Charlie says:

              I didn’t say I knew it was reasonable. I said that’s the talk at the cap. Thus I said “..I have no idea what she specifically asked nor what is involved”. That’s not exactly saying I believe it is reasonable.

              What I do then say is that the other pattern of her conduct indicates someone who remained uninterested during the process up until it became clear something would pass, then decided to give herself and others a homework assignment that she could talk about but would take much longer to turn in that the vote schedule allowed.

              • ryanhawk says:

                You accept the claim at face value and your answer in its entirety is premised on that basis. The request is easily found. As the WSJ recently said of Jeb, your dismissal here is more of a strut than an argument and it isn’t persuasive.

      • So what I’m having trouble reconciling is this:

        1) I don’t understand how the budget process works. To me, if this was a big deal, the budget would reflect the 4th penny revenues going to the DOT… and then an increase in capital spending. Is there some constitutional mandate that says ONLY state motor fuels go to the DOT?

        Again, it seems to me transportation isn’t a priority for the executive, nor the legislature, or else we’d see it reflected in the FY16 budget, ahead of the tax increase. (To pay for more cap. projects)

        2) Converting to an excise tax from a sales tax seems a fundamental reform. The amount would be up for debate. But I still don’t get why the MOST, other fees, and bonds are in there. I’d like to see them do the conversion, set it to be a small tax increase, without the MOST increases, and then come back next session to raise it, now that it’s an excise tax.

        Why wouldn’t that be so bad? Why does it have to be everything all at once?

        • Charlie says:

          Yes. The legislature has dodged this mandate for over a quarter century by having deemed the “4th penny” a sales tax and not a “motor fuels tax” when the sales tax rate was raised from 3 to 4% in 1989. Note that the first 3% are considered a motor fuels tax, and the constitution mandates all motor fuels taxes to be remitted to GDOT to be used to build and maintain roads & bridges.

          Nine minutes of detail on that here, along with my ugly mug: https://www.youtube.com/watch?v=zB-_pHwFbEA

          The 4th penny will be transferred and reflected in the FY15 supplemental budget. As the FY ends in June, (and we’re in March), we can pretty much see that the money is there from the monthly year over year revenue increases. Thus, it and the $280M for schools to end all austerity cuts are covered this year.

          2) Again, see that video above and understand the motor fuels tax is all that funds GDOT (except for one line item program GDOT administers with general fund money, about $10M out of a $2.2 billion budget).

          What you suggest in 2 is exactly what they’re doing. It’s converting sales to an excise, with a very slight increase, that still only gets us about half of the need established by the study committee. The people that keep saying this is a billion dollar tax increase aren’t accounting for much of the money already being collected but being transferred to GDOT (house version). If House numbers are used, and even at today’s reduced gas prices, this tax represents about $5/month extra from an average Georgia driver. If gas prices go back to $3.50, it’s a cut.

  2. Al Gray says:

    Charlie,

    Beyond the resignation of DOT Board Chairman Evans, the firing of DOT Commissioner (Abraham) Evans, the inclusion of previously-unreported contract commitments, and the demotion of the treasurer, what sweeping reforms were made at DOT? In recent years they have contracted out many of their functions. Has there been a reduction in payroll commensurate with that? Governor Perdue was serious enough about reforming DOT to propose a State Transportation Authority that would have left DOT doing not much more than maintenance.

    Over here, DOT’s ham-handed propaganda whereby they attributed projects underway as being TIA (TSPLOST) projects, when the majority of funds were non-TIA, should create real doubt as to how many DOT promises and how much DOT accounting we should believe.

    • Charlie says:

      I don’t have a line item by employee, but the number of GDOT employees has decreased steadily since the 70’s, from over 10K then to just over 4K now.

      Just since 2012, the number of employees has dwindled from about 4,500 to about 4,100, a drop of roughly 10%. So the short answer to your first question is yes.

      As for your constant references to TIAA, the money the House & Senate are talking about will barely pay for statewide maintenance of roads and bridges. You can see a bit about that in this nine minute video, also featuring my ugly mug:

      https://www.youtube.com/watch?v=zxKZKQvqHic

      We haven’t written about it as extensively but the Senate has a bill moving that would make the TSPLOSTs/TIAA referendums a bit more flexible (sub-regions, longer collection periods so transit can receive matching funds, etc). For Atlanta to see significant new projects, TIAA is still part of the equation even if a bill is signed with the amount in either the current House or Senate plans.

      Thus the “we’re paying twice” argument doesn’t hold.

      • Al Gray says:

        It does for those of us who attended TIA/TSPLOST informational meetings and were preached the message that TIA was the plan to eliminate Georgia’s transportation woes. Alas, when it failed in 9 out of 12 regions, the “state-wide” aspect went bye-bye and now we are confronted with this attempt to fund transportation in those 9 out of 12 regions who voted – extremely wisely IMHO – that fiasco down.

        • GTKay says:

          I see no humility in your opinion. You have a fixation on your own interpretation of TIA numbers, you denigrate people you don’t know, and you offer no solution to the problem. Transportation is underfunded in Georgia. What’s your plan, Al? Don’t link us to your blog.

          • ryanhawk says:

            My simple plan was to capture the 4th penny as a first step of a multi-year plan to demonstrate good faith on the part of the legislature. With tax revenues rising (12+%) this could be done without raising taxes or cutting elsewhere in the budget.

            Step two would be to have an honest conversation about truck subsidies and fairly apportioning road maintenance costs. Many of us don’t like being promised new capacity only to see funds diverted to maintenance and ultimately to trucking companies. Trucking is important and will be increasingly so as the port in Savannah expands. We can’t avoid this conversation if we really want to solve the problem.

            • Charlie says:

              1) This plan does that, (4th penny), this year. It’s coming out of FY2015 year over year revenue growth.

              2) We’re having that conversation right now. Unfortunatlely, the local governments with an assist from certain self-described Tea Party non-leaders have demanded local governments not be touched. When Butts County Georgia funds its budget off a couple of truck stops, you can see that the diesel tax excise fee for truckers isn’t being used for maintenance, but to pay for services and education in Butts County so their residents don’t have to pay their share of property taxes.

              Let’s get to the “start with the 4th penny” concept. That’s almost $200M. The total need, every year, for at least twenty years, is between $2BN and $3BN. If we just accept this schedule and use the money in the House or Senate plan just for maintenance, that still leaves us with few new projects and bridges that we know need to be replaced today being replaced in 2036.

              How long do you want to wait to get comfortable before we decide to make some tough decisions? Because in reality, we’ve already taken the “wait/let’s see” approach for 12 years.

              • ryanhawk says:

                The 4th penny is a great start and a tough decision which I applaud. When it comes to the 4th penny, today’s Reps got to clean up the garbage of past legislative misdeeds. Bravo for them. (I’m not so sure about future automatic increases. I dont’ trust the formula will be fair, and I don’t trust that future funds won’t be diverted in some nefarious way).

                I couldn’t agree more about the perversity of transferring diesel excise fees to pay for local government operations, and especially to fund education. Taking at face value the 2 to 3 billion you say we need per year, how much of that would be addressed by ensuring ALL diesel excise taxes go toward maintaining state roads? And how much higher should the excise taxes or fee be to fairly address the disproportinate damage trucks do to the roads?

                I will also say in defense of Butt’s County (total millage rate is 33 or so I see) and their peers, this is not entirely on the locals. Paying for education (about 2/3 of many county budgets up to 3/4 for others I would guess) is an obligation of the state by my reading of the state constitution.

                We’ve increased the costs of education via state and federal mandates and have allowed or required locals to fund an increasingly large share of the total. This isn’t fair to students or taxpayers in counties with a small tax base, so it’s no wonder they try to divert every tax dollar they can to fund local operations. I don’t like it, but I understand it.

                That’s a big problem to solve too, and it’s very much related. I think we should focus on making incremental progress on fixing this. And in an ironic twist it seems to me that it’s the “establishment” insisting on an all or nothing approach to transportation funding versus making the incremental progress that’s available and widely supported.

                • Anonymole says:

                  “ALL diesel excise taxes go toward maintaining state roads”

                  All excise taxes on fuel (both diesel and gas) will be earmarked for transportation in this state. That is a mandate set either by law or the constitution. The fourth penny (and the other three pennies) is a sales tax tied to the value of the gas – and that is how the funds that came from the fourth penny were redirected to the general fund for non-transportation spending.

                  ” And how much higher should the excise taxes or fee be to fairly address the disproportinate damage trucks do to the roads?”

                  One thing to think about with the trucks is the impact of the cargo they are hauling. That cargo is creating revenue and jobs for our state elsewhere. Don’t think of it as a total net loss, just because of the damage it might do to our transportation system. Think of the 5,000+ people driving their cars to and from Kia everyday to turn the cargo that truck delivered into a Sorrento in West Point. Think of the impacts those trucks have on agriculture in this state – hauling wood for lumber/construction or cotton for textiles or watermelons to for your Fourth of July celebration with your family. Then, consider the income taxes, property taxes and other taxes all of those people who rely on those deliveries pay into our state because of those trucks.

                  Beyond that, if we raise the cost of doing business on those trucks, guess who ultimately pays the price? You, the consumer, will. But instead of seeing a five cent increase on your gallon of gas, it’s going to be a 15-20 cent increase on your watermelon (and everything else you buy) – because the cost of doing business went up. Oh, and because the cost of doing business went up, those people at Kia aren’t going to get the raise they were looking for – so their purchasing power has declined.

                  Every truck driving out there right now has a positive impact on our economy. Can you say the same for every car? A punitive increase on diesel doesn’t come out of the truck driver’s pocket, it comes out of yours.

                  • ryanhawk says:

                    That’s a lot of hand waving… or shall I say a big truck load of bull hooey. If you care about having a sustainable road system, we need everyone paying for what they use.

                    No one is suggesting a “punitive” increase on diesel. The idea is to have people pay their fair share of maintenance costs, and currently big trucks simply don’t. With that you appear to agree, though you don’t think it’s a problem that should be fixed. You just want to justify it — and by your logic perhaps we should increase the subsidy so we get more of the magic benefits arising from truck subsidies.

                    There is also another number I neglected to mention — the number of induced big truck miles we are subjected to because of the subsidy. Make them pay the full costs of the damage they do and some of those truck loads will find an alternative route to market, lessening congestion, and ensuring we have the funds to maintain our system.

                    • Anonymole says:

                      I speak only the truth. Obviously, it’s more complex than that, but I’m not writing a novel here.

                      In response to the rest of your post:
                      What subsidies are you talking about? Hope Grants for Truck Driving school? Because that is the only subsidy our state provides for trucking.

                      Trucks pay more than their fair share of the costs, they drive more and they pay more in fuel taxes – both at the consumption level and the per gallon level presently (diesel taxes are higher compared to gas taxes.) They pay the state for additional permits as well.

                      “Make them pay the full costs of the damage they do and some of those truck loads will find an alternative route to market, lessening congestion, and ensuring we have the funds to maintain our system.”

                      Certainly sounds like someone is advocating for a punitive increase to me. “Let’s punish them for doing the job we need them to do.”

                      Transportation costs are a big reason that many businesses locate in Georgia. It’s central in the Southeast and provides easy access to a large population. Increase the cost of transportation in Georgia and these businesses will move elsewhere, or will never come.

                      Make them pay an inordinate amount per gallon in Georgia, and they will fuel up out of state. Then, they’ll be paying those taxes to another state while driving over our roads. That alternate route to market will be coming from Alabama, Florida, Tennessee and South Carolina with fuel purchased in those states.

                    • Anonymole says:

                      You’re taking the wrong view.

                      What you are suggesting is that trucks should pay into the system the same amount they cost the system. What you are not taking into account are the additional impacts these trucks have outside of the fuel taxes they pay and the maintenance costs they create.

                      By your logic, if trucks cost the state $200,000,000 in maintenance costs per year, they should pay $200,000,000 in fuel taxes per year.

                      By that same logic, if those trucks have an additional economic impact of $400,000,000 in revenue to the state, then the GA General Assembly should spend that amount on truck driving needs.

                      What I am saying is that if truck drivers cost the state $200,000,000 per year in maintenance, but they create $50,000,000 in fuel taxes and $400,000,000 in other revenues, then the state is profiting from them overall.

                      It’s a very myopic stance you are taking, and I am only asking you to look at the whole picture. If you cannot, or refuse to do that, then shame on you.

                    • ryanhawk says:

                      Well feel free to spell out in detail the postive externalities of trucking that you think we should all consider.

                    • Will Durant says:

                      By your reasoning we should utilize taxes to subsidize every business that produces, transports, or sell consumer goods. That should practically make them free!

                    • Anonymole says:

                      If tax incentives are the subsidies you are referring to, Georgia does. It’s done to promote growth from our state’s businesses. Growth that creates revenue for Georgia and jobs for her people.

                      And guess what?? As one of the fastest growing states in the nation, it seems to be working pretty well.

          • Al Gray says:

            GT guy………I blasted DOT for misrepresenting “TIA Projects” by publicizing and reporting blended funds projects with huge non-TIA funds as being “TIA Projects.” I proved it by linking to the pages where the deception appears. I provided the detailed project sheets showing where the funds came from.

            My blog has presentations and videos which now look prophetic, including a warning that most of the state would reject TSPLOST and if we passed it, Atlanta region’s needs would command a statewide fix on top of our new transportation spending.

  3. Al Gray says:

    The hang up is that the legislature cannot make the local level of government relinquish its grasp on transportation funds. Replacing or leaving them in place is what makes for the huge tax increase.

    It is entirely revealing that the only concessions in the more onerous House Bill were to fellow politicians and not the people of Georgia, who will be forced to ante up 28 to 67% more in tax, with sequential 5% increases out of personal incomes that increase 2.4% a year.

    Get the money away from the locals and match it up with excise tax increases, as best is possible. Then you might have less criticism.

    Plan? As Mr. Andy Jones of Sprint Foods testified to the Joint Committee, and proved with stunning detail, truckers and residents within 30 miles of the border with SC already have a plan to deal with the Georgia “No-Tax-Pledging” politicians’ tax increase.

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