What’s a state to do when the federal surface transportation program heads toward its Sept. 1 expiration date with little promise of a new transportation bill and the Federal Highway Trust Fund’s expenditures outpace tax receipts about $1.25 billion a month?
The good news is nobody expects Congress to allow the program to lapse. Washington will slap on some Band-Aid legislation taking states into 2015 (hint: November elections) but the wounds of partisanship will continue to fester. What Georgia should not be doing is holding its breath. State transportation leaders should hold their noses instead; forge ahead with new and growing independence from the federal government.
Gov. Nathan Deal is doing so already, having approved the sale of bonds and using some fuel tax funds as a stopgap until federal funds become available when Congress takes action. But it’s a stopgap. Even accepting that a fuel tax increase is politically unfeasible, Georgia leaders’ opportunities are as wide open as the roads (not under construction) in the state.
The state will gain credibility with taxpayers and voters when it shows, first, that existing funds are being dedicated to transportation. This includes dedicating the “fourth penny” – the 25 percent of the 4 cents-per-gallon sales tax that currently goes into the state’s general treasury. It also includes enabling counties to divvy up a penny special purpose local option sales tax (SPLOST) – split an existing penny tax without needing to add a penny for transportation projects.
Second, prioritize user fees. Fuel efficiency and growth in hybrid and alternative-fuel vehicles have shrunk gas tax revenues even as needs grow. Because fuel tax revenue in Georgia is dedicated to roads and bridges, the state loses revenue for such infrastructure when alternative-fuel vehicles are not "paying at the pump."
For some states, the solution is to adopt adopting an indexed gas tax – a percentage based on price instead of a fixed cents-per-gallon. While helpful it, too, is a temporary fix. With shrinking revenues, it makes sense that Georgia target road users through increasing tolling and, eventually, implement an Oregon-type charge for vehicle-miles traveled.
Third, embrace private sector involvement. Georgia’s infrastructure investments need sufficient long term credit, not pay-as-you-go. Private investors can facilitate this. While public projects may not always be completely privately funded, the dollars and experience of private companies can expedite a project. Outsourcing services, including transit, and encouraging private investment not only reduces the taxpayer burden, it expedites projects and increases efficiency. The private sector prioritizes needs to get the best return on investment.
Finally, reduce the federal government’s role in state and local transportation policy so that domestic needs can be prioritized. Sound transportation policy is being diluted because planners are losing sight of the overriding principle that transportation solutions should solve transportation problems. Money from the feds comes back mired in earmarks and tangled in strings; state and local governments must tailor requests to accommodate the federal government.
Taking critical dollars away from the principle of getting people from Point A to Point B, these costly ideas include transit-oriented development; live-work-play; “road diets,” “world-class city” ideas such as light rail, streetscaping and streetcars; environmental policy such as tougher fuel emissions regulations and CAFÉ standards; and energy policy – such as transportation grants funding solar panels on the canopy of bus stalls at MARTA’s Laredo Facility in Atlanta.
Georgia loses money and control when fuel taxes go first to Washington. It’s time the state that is the origin of the nation’s greatest do-it-yourself chain can adopt more of the same.
Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent, state-focused think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians.