Two months from Georgia’s vote on a transportation sales tax referendum, the outcome still is in doubt. Advocates and opponents of the special purpose local option sales tax are cautiously optimistic that their side will prevail, but neither camp has hard polling data to justify the outlook.
“We clearly have our work cut out for us,” said Doug Calloway, who heads the Georgia Transportation Alliance wing of the state Chamber of Commerce. Hired away from a similar executive position in Florida last October, Calloway is lead man in the effort to pass the taxing authority in as many counties as possible.
Legislators voted to give Georgians across the state a series of simultaneous local referendum opportunities for funding transportation projects. If the one-cent sales tax is approved in each of 12 regions or districts, Georgians will have handed themselves a $19 billion infusion of tax money over 10 years for highway, transit, freight, airport, sea port, bicycle and pedestrian projects.
The projects were created in each district by a roundtable and executive committee comprised of state and local elected leaders. After assorted public input sessions, the participants chose from a list of projects worked up for each district by the Georgia Department of Transportation.
Not an Easy Sale
Despite the obvious appeal of creating a sizeable pool of money specifically earmarked for much-needed transportation improvements, many Georgians are turned off by the method of pooling—a sales tax that will collect money from them for a full decade.
“It is a tax increase in a down economy. There is no given it will pass, not even in Atlanta,” said Keith Hatcher, senior director of public policy of the Georgia Association of Realtors. The association is very actively backing the transportation tax, with both state and national realtor associations donating to the cause. The state association actually is waging two campaigns simultaneously, one statewide and a second one concentrating on the metro Atlanta region.
“The [Transportation Alliance] campaign is deciding which districts are most viable and we will follow their lead,” Hatcher said. “The association has a network of 53 chapters across the state. I don’t know any local realtors association that is not supporting it. We have made funds available to them.”
Why are realtors so involved in the campaign coalition pushing the tax? There are several reasons, Hatcher said, all of them weighing on the economic impact of a deteriorating transportation system.
“The most important reason is that we can’t sell properties if people can’t get from home to work. On a larger scale, this is part of economic development, which we support, working closely with the chamber. And traffic congestion is a factor. Charlotte and Birmingham and other cities in the southeast are using our traffic congestion against us. We want to eliminate that.”
Hatcher has worked in the association for a quarter century and been involved in a variety of statewide ballot issues. He has worked both sides of the tax issue, on at least one occasion helping defeat a proposed tax increase. This time around, the association sees wisdom in raising the sales tax.
“We are dedicated to this cause because it is really important,” he said. “So we are going to fight hard to pass it. It will be a tough fight because of the down economy.”
Like everyone else who agreed to be interviewed, Hatcher will not venture a guess as to the outcome.
“To be honest, it is a little early, and I learned a long time ago that predictions are not a smart thing to do.”
Contractor Support
The general contractor community is supportive of the tax initiative, as one would expect, though there seems to be some reluctance to talk about it. Several calls to contractors and to the Georgia Highway Contractors Association were not returned. However, Web sites openly back the tax.
Bill Hammack, president of C.W. Matthews Contracting Company Inc., Marietta, Ga., addresses the issue for company employees in a video on the cwmatthews.com Web site. Hammack asks employees to back “the largest transportation initiative in modern times. Please plan to vote ’Yes’ on July 31 for a brighter future for Georgia, your company and your family… Collectively our votes can dramatically affect the outcome of this important referendum.”
The appeal is more muted on the Web site of Macon-based Reeves Construction Company.
“The 2012 TSPLOST [Transportation-Special Purpose Local Option Sales Tax] is an opportunity for all Georgians to take control of their future by choosing to make significant investments in transportation projects that are vital to the economy, jobs and quality of life throughout the state,” reads the text of the message on the site under the headline, “Should we invest an additional penny?”
The message goes on to encourage people to register to vote in July “and spread the word to your family and friends.”
The Georgia branch of Associated General Contractors has no mention of the referendum on its Web site, though its director of governmental affairs has said the organization is supportive of the tax.
Nor does the state chapter of Associated Builders and Contractors (ABC) visit the issue on its Web site, but Bill Anderson, president of Georgia ABC, said the organization is behind the initiative. The chapter’s board of directors has endorsed it and hopes for its passage. No funds have been allocated for the campaign, however.
“Our chapter has not put any money into it and I’m not sure if we will or if it will be needed,” Anderson said. “Ours is more of a grassroots effort, with volunteers who believe in it and support it.”
ABC has about 300 member companies in Georgia, some of which might oppose the sales tax boost, Anderson said. Because the board fairly recently voted to back the measure, it has not yet spread word to its members.
“We put the word out to our legislative people, but have not yet sent anything out to the full membership and, of course, have not received any feedback.”
The heart of ABC’s efforts will be educating association members and the public on the merits of the initiative and its importance to the entire region. Anderson calls the education “so critical. There have been a lot of emotions expressed, but not a lot of efforts to educate.”
Not Convinced
The most visible opponents of the multi-billion-dollar sales tax fall under the umbrella of “Tea Party” organizations. Tea Partiers up and down the state have uniformly come out against the sales tax proposal for a variety of reasons.
For some of them, just the idea of another tax in a struggling economy is a non-starter. That knee-jerk negative response to additional taxation is the default perception of Tea Party supporters, though resistance to the sales tax actually is more variegated than that.
“We believe it is a very flawed law,” said Tom Maloy, a board member of the Georgia Tea Party, which is actually a Cobb County organization with spillover into surrounding counties, all of which are in the Atlanta area.
“The law does not serve the taxpayers of the Atlanta region. We haven’t gotten into the effect of it on the other regions in the state, but we have done a lot of research on the Atlanta region and we don’t see that it serves us well,” Maloy said.
Maloy is a financial writer and retired owner of a Marietta investment relations firm. He has not always been active in political debates, but concern about out-of-control spending in the country caused him to join the local Tea Party organization shortly after its inception three years ago. It holds weekly meetings that attract anywhere from 50 to 120 people.
One objection to the transportation sales tax is that it doesn’t effectively address the issue of jammed freeways.
“It does not provide the traffic congestion relief that proponents say it does,” Maloy stated. “As a percentage of total funding, very little goes to traffic congestion relief.”
Maloy cited as an example of misapplied spending the proposed expenditure of $785 million on a leg of the transit link from Cumberland Mall to the Atlanta Arts Center station, a stretch “where there really is very minor traffic congestion. I won’t say it won’t do anything, but it certainly doesn’t do anything much to relieve congestion.”
He also fears that passage of the 10-year sales tax will sour taxpayers on approving tax funding for future projects.
“I know in the Atlanta region I can pretty much tell you that the amount of taxpayer dollars going in is going to cause a lot of problems down the road. It is not being spent for traffic relief, so that when we do take a serious look at traffic congestion, there will be no money for it,” he said, mixing his metaphors in summation: “It poisons the water down the road for taxpayers.”
Maloy and fellow Tea Party volunteers also believe the sales tax revenue will build miles of infrastructure — including light rail systems — that cannot be maintained in the future for lack of funding. And he is concerned about so much “economic development” money being handed to an unelected Atlanta regional commission that is not answerable to taxpayers for its stewardship of the funds.
Maloy reiterated that his focus is the Atlanta region. “I’m not going to say that in all regions it is not going to do any good. Certainly there is a need to improve the port in Savannah, for example, and the roads leading to it. There is certainly a need for that.”
The Georgia Tea Party’s major contribution to the debate between now and July 31 will be education. Like counterparts at ABC of Georgia, Maloy believes there is too little truth in his opponents’ advertising.
“I’m talking about real education, not the pseudo-education of the opposition,” he said. “Many of the ’facts’ they are using are not true, or they are just nonsense.”
Unlike others asked for predictions, Maloy ventured an opinion: He said he feels “pretty good” about the referendum failing in Cobb County, if the turnout is large. And if it fails across the metro Atlanta region, he suspects only two counties — Fulton and Dekalb — will have favored it.
The irony is that even if Cobb rejects the sales tax, the sales tax will be collected in Cobb County anyway if the region as a whole passes it. Individual counties can’t opt out of the sales tax, only entire regions, which is why Maloy objects to the tax vote being called a “local option.” Furthermore, if Cobb turns it down, the county will have to put up a higher match for state funding of local projects associated with the referendum.
“That shouldn’t really make a difference in how a person votes, but it’s a way to kind of frighten taxpayers,” stated Maloy.
Increased Focus
With the legislative session ended and the Republican primary season drawing to a close, promotion of the transportation sales tax referendum is getting under way in earnest.
“The majority of people aren’t even aware it is on the ballot,” said Jason O’Rouke, political director of the Transportation Alliance. “In the polling we do have, we see that when voters understand the money is going to stay in the region, they are more likely to vote yes. We just have to get people to understand and get them to the polls.”
The various advocacy projects cost money and O’Rouke said fundraisers are being held to collect the money. As of mid-April, the supporters of the tax had several hundred thousand dollars in hand with a goal of raising $6 million, a task that the political director acknowledges will be difficult.
The Alliance is campaigning with the intent of winning the vote in all 12 regions, but realistically will settle for less than that. Counties in the northwest corner of the state constitute “a tougher region,” O’Rouke said, and anti-tax opponents across the state are expected to have some success on July 31.
“We are committed as if we are going to pass it in 11 regions [the Atlanta region has a separate campaign structure], but no one has really set a hard goal. If we pass one, that is a good thing,” O’Rouke said. “The good thing about this is that, two years from now, the people can come back and try it again.”
That’s because the language of the referendum lets counties that reject the tax reconsider it in a second round of balloting 24 months later.
But Calloway, the Georgia Transportation Alliance executive director, isn’t thinking in terms of voting again two years from now. He is optimistic.
“We are heading in the right direction, raising money, have partners all across the state. Is it a tall order? Absolutely. But at the end of the day, this is the only game in town.”
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