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Georgia Seeks Infrastructure Funds Via Sales Tax Options

Tue December 27, 2011 - Southeast Edition
Giles Lambertson

In the name of transportation, Georgia is taking the local option sales tax statewide.

State legislators voted in 2010 to give residents across the state a series of simultaneous local referendum opportunities for funding infrastructure. The vehicle for doing so goes by the awkward acronym of TSPLOST, which translates into “Transportation Special Purpose Local Option Sales Tax.”

If successful, it would mean the infusion of up to $19 billion into Georgia infrastructure projects over the next 10 years.

While a public vote on the funding measure still is six months away, camps of supporters and opponents are marshalling their arguments for and against. As of mid-December, approval of the new funding source seems likely in at least some districts.

“I am very hopeful that it will pass,” said Decatur Mayor Bill Floyd, who was part of the planning process for the Atlanta metropolitan region. “I am very optimistic.”

Voter approval of the tax initiative would culminate a two-year legislative effort to generate new funds for highway, transit, freight, airport, port, bicycle and pedestrian transportation projects all across Georgia. The Transportation Investment Act of 2010 created the structure for a one percent sales tax referendum in each of 12 regions or “districts,” which, together, constitute the entire state. The legislators also mandated that a roundtable and executive committee in each district be comprised of local and statewide elected officials.

Those district boards subsequently pored over a dream list of projects worked up by the Georgia Department of Transportation. After soliciting input from local and regional officials and transit and transportation stockholders, leaders in each district produced a pared down list of priorities that can be undertaken with projected sales tax revenue within the district.

The general public participated in the project vetting process in a big way, through surveys, focus groups, e-mail campaigns and other outreach mechanisms. In the Atlanta roundtable region alone, some 200,000 residents reportedly were pulled into the deliberations.

The outcome of all this planning will be known in July. That’s when voters in each district will announce with their votes whether they support the decisions of the district roundtable and committee members.

Each district vote will stand on its own. If a majority of voters in a district object to the special purpose sales tax, the funding initiative in that district will die regardless of what else happens across the state. No tax dollars will be generated in that district, but neither will tax dollars flow into it from other districts.

In districts where it is approved, the taxing authority will be in place for 10 years with the opportunity at the end of the decade for district voters to extend it.

Norcross Mayor Bucky Johnson, who chaired the executive committee for the Atlanta metropolitan district, has declared the tax vote a “once-in-a-lifetime type of event. What I really see this transportation investment act doing is helping our children and our grandchildren in the future.”

Next to Atlanta

“I think there is going to be a lot of interest in it,” Floyd said, understating the public reaction to the initiative. Decatur is in Dekalb County, which hugs the east side of Atlanta. The variety of projects varies from district to district across the state. In Dekalb and four other core Metro Atlanta counties, mass transit vies strongly with highways for infrastructure dollars, which produced some conflict among district leaders.

Floyd acknowledged the differing public opinions about spending allotments for highway and transit. Officials ended up designating about half the projected revenue for transit projects. “And we all came together. It was a unanimous vote on the project list for the district.”

That doesn’t mean everyone is happy. Floyd said he has been told “if you don’t do this or that, I am going to vote against it. Well, you can’t do that for everybody. The people who you might think would be opposed to it will be for it, and some who you might think would be for it will be against it.”

Floyd — who was on the Decatur council for 15 years before becoming mayor five years ago — said in the end, “it really is about two issues: quality of life and jobs. This will be an incredible stimulus; if you add in matching money, it will be $15 to 20 billion over 10 years.”

General contractors are interested in any of the big-ticket transportation work, of course. But some of the tax revenue—15 percent in the Atlanta district, 25 percent elsewhere in the state—will be turned over to local government to help meet smaller infrastructure needs.

“Decatur will get money back to do with as we want,” Floyd said. “We can use it for whatever we want, about half a million dollars a year. I think there are a lot of people who are looking at that part of the package.”

The mayor acknowledged a special interest in the infrastructure funding issue: He is a utilities contractor. W.F. Floyd Construction performs water, sewer and other utility line work in Decatur and, in all likelihood, will benefit somewhat from the new revenue source.

“There will be some work in here for people who do what I do,” he said. “But there is also a lot of pedestrian type work. It certainly is not focused on utility work.”

Other Metro Perspectives

Henry County is southeast of Atlanta, yet still a part of the Atlanta Metro district. It doesn’t share a border with Atlanta’s Fulton County and mass transit is almost nonexistent. Express commuter buses roll on Henry County roads, but that is about it for mass transportation.

“Transit systems really are difficult sales,” said Elizabeth “BJ” Mathis, chairman of the Henry County Commission, “so I appreciated the project list that let each area determine what their priorities are.”

Over 10 years, the tax is projected to produce some $260 million for projects that will have direct impact on Henry County. That includes the local money that will flow directly to local governments. For example, a large industrial area along Interstate 75 is served by two-lane roads and Mathis and other elected officials are interested in upgrading those roadways.

“We wanted to relieve the congestion in those areas and to preserve the jobs there,” she said. “It was a congestion mitigation initiative.”

The voter “pushback” against transit funding, which is being experienced by some other counties in the Metro area, is not a factor in Henry, Mathis said. The primarily rural county with a population of 200,000 is concentrating on building its highway infrastructure.

State Sen. Jack Murphy lives in Forsyth County, which is just outside the Atlanta Metro district. However, part of his Senate district lies inside the Metro, and he was selected to serve on the metropolitan district board. Consequently, he came away from the roundtable process with something of a splintered view.

“They strongly support it over there [in the Atlanta region]. They are going to get a good bit of money, and so is Forsyth County,” said Murphy. “But there is some resistance in Forsyth County. I don’t know how much. I did a little poll and about a third oppose it, about a third are for it, and about a third didn’t care one way or the other. I think it will probably pass, but I wouldn’t be going out and betting any money on it.”

News reports about more money for transit projects have “confused” some Forsyth residents, the senator said.

“We don’t have any transit in Forsyth. The project list in the Metro district doesn’t affect our project list. There is a lot of pushback in the Metro area about some of the transit projects, but they are not the constituents I represent.”

Getting voters to impose a one-cent sales tax on themselves for 10 years is, in Murphy’s view, “going to take a lot of education. The Metro area is especially going to have a real selling job. In Forsyth County, we will get some $400 million over 10 years for highway work. People driving an hour or an hour and a half to Atlanta every day probably will be for it.”

Critics of the tax proposal have not come together in any great numbers. Pockets of resistance have appeared here and there, but there is not yet any large organized opposition. That may change between now and July, but then again a need for a massive infrastructure upgrade may be widely perceived and approved by Georgia residents.

Opponents who have spoken out generally have voiced two objections. One is that a new tax at this time when the state’s economy is under duress is the wrong fix at the wrong time. These opponents include people who generally oppose tax increases.

The other complaint is that the referendum in 2012 will be separate from the general election polling. The fear is that only a handful of voters will go to the polls in the special election, with a tiny minority making a 10-year tax issue decision for everyone else.

“They don’t want 7,000 or 8,000 people deciding for 175,000 people in Forsyth County, maybe 10 percent of registered voters,” Senator Murphy said. Consequently, there is talk in the state capitol about moving the referendum to a regular voting date.

Statewide Push

To get out the vote and sell the idea in the 11 districts outside the Atlanta area, the Georgia Chamber of Commerce in October hired transportation advocate Doug Calloway. As executive director of the Chamber’s Georgia Transportation Alliance, Calloway will more-or-less continue his work of the previous eight years as president of Floridians for Better Transportation.

“I am confident that, working with our key stakeholders, he will effectively lead our efforts to build a statewide multi-modal transportation network and solidify our position as a global logistics hub…” Chris Clark, the Chamber’s president and CEO, said in announcing Calloway’s hiring.

For the present, that means selling Georgians on the transportation local option sales tax. Calloway is confident the people of Georgia will see what is at stake and pull the voting levers for progress.

In late November, Calloway spoke of an article he had just read in the Atlanta Journal-Constitution about a forum at the University of Georgia, where some experts predicted the state would not return to pre-recession employment levels until 2020.

“Talk about a hopeless headline,” he said of the news article. “It’s sobering. What can we do to help? The local option referendum is the key. We know that it’s not really about concrete and steel and asphalt; it’s about jobs and people.”

So, Calloway said, his job is “to spread the gospel about what this referendum is really about. It is a good message, as opposed to the dour, hopeless headlines like the one in the newspaper. Once people start to understand, I’m confident that most of the people in the different regions of the state will do the right thing and help themselves — rather than wait till 2020 for more jobs.”

Calloway isn’t opposed to moving the referendum to a more established election day if that idea takes hold.

“I’m sure that we would be happy whenever it is voted on. My recommendation is to let as many people as possible have a say in the matter.”

Local option sales tax referendums are not unfamiliar ballot booth issues for Georgians. In Forsyth County, voters just approved a continuation of such a tax, the margin being rather slender, 52 percent for, 48 percent against, according to Murphy.

“That makes you think this transportation tax could be an uphill battle,” said Murphy. He declined to say whether he personally favors the proposal.

“My personal vote is mine. I was willing to let the public vote on it. Let the public decide.”

In Henry County, Mathis doesn’t see a groundswell of support for the new tax, but neither does she see much opposition to it. She detects a wait-and-see approach among residents and believes a lot is riding on education efforts to inform voters.

“I’ve done my job as a part of the roundtable,” she said. “We feel like we have protected the interests of Henry County.

“The board and I are just leaving it up to the voters.” CEG

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