As transportation sales taxes roll in elsewhere, metro Atlanta ponders how to provide traffic relief

By David Pendered

Three regions in Georgia where voters in 2012 passed the 1 percent sales tax for transportation have raised a total of $54 million from January through May, according to a report last week from the state finance commission.

Voters in three districts approved the 1 percent transportation sales tax: Central Savannah River; River Valley; Heart of Georgia. Credit: Georgia Department of Community Affairs

Voters in three districts approved the 1 percent transportation sales tax: Central Savannah River; River Valley; Heart of Georgia. Credit: Georgia Department of Community Affairs

That may not seem like a lot of money in comparison to the billions of dollars the tax would have collected if metro Atlanta voters had approved it. But it’s a pot of construction money some may envy as municipal officials in metro Atlanta continue to raise the question of how to ease traffic congestion in this region, where voters rejected the sales tax referendum.

Transportation was the sole subject discussed during a June 24 luncheon that was part of the annual conference hosted in Savannah by the Georgia Municipal Association. More than 120 municipal officials attended the lunch, according to the July newsletter of the Metro Atlanta Mayors Association.

A number of ideas were discussed, according to the newsletter. They include:

  • Additional toll bridges/lanes to help address infrastructure costs;
  • Reversible lanes on I-75;
  • Managed lanes;
  • Regional transit in at least in the 5-county inner core;
  • A bicycle connectivity plan;
  • Tax incentives for flexible commute times
  • More HOV commuter lanes;
  • A change in state law to create a multi-jurisdictional funding mechanism.

Norcross Mayor Bucky Johnson, who chairs the Metro Atlanta Mayors Association, said in the newsletter that progress continues on these ideas and others. The progress, however, is slower than if voters had approved the sales tax.

On the topic of managed lanes, the Georgia Department of Transportation has scheduled two meetings next week to gather public comments about the three proposals it has received for the planned managed lanes project along I-75 and I-575 in Cobb and Cherokee counties, a segment called the Northwest Corridor.

GDOT intends to select a winning proposer later this month and begin final contract negotiations. The deadline for public comment is July 19, following meetings set for July 9, 4 p.m. to 7 p.m. in Woodstock; and July 11, 4 p.m. to 7 p.m., in Atlanta.

Click here for more information on the times and locations, and how to submit a written comment.

Meanwhile, road construction is underway in Toombs County with money collected through the transportation sales tax. Toombs is in the Heart of Georgia/Altamaha Regional Commission District.

Another project funded through the transportation sales tax, this one in Randolph County, is to be announced next week, a GDOT official said Friday.

The road project in Toombs will add a turn lane into a new pet food manufacturing plant, located off Ga. 130 north of Lyons. The turn lane is expected to cost $162,000 and improve access to a plant that’s to bring $25 million in private investment and from 100 to 150 jobs, according to a statement from GDOT when the contract was let in April.

Sales tax collections in the three districts are expected to run slightly behind projections, according to the latest projections, in December, from the Georgia State Financing and Investment Commission. The GSFIC estimated that collections in 2013 would trail initial projections by 2.8 percent in the Heart of Georgia and Central Savannah River districts, and by 2.1 percent in River Valley.

GSFIC reported the following collection totals in its latest report:

Central Savannah River

  • Total collection: $24,297,559.40
  • Portion reserved for local jurisdictions: $6,074,389.86

Heart of Georgia

  • Total collection: $11,470,022.48
  • Portion reserved for local jurisdictions: $2,867,505.62

River Valley

  • Total collection: $18,215,679.61
  • Portion reserved for local jurisdictions: $4,553,919.90

About David Pendered

David Pendered, Managing Editor, is an Atlanta journalist with nearly 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.
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5 comments
The Last Democrat in Georgia
The Last Democrat in Georgia

{{"As transportation sales taxes roll in elsewhere, metro Atlanta ponders how to provide traffic relief"}}

Metro Atlanta can provide traffic relief in the way that it should have been providing traffic relief all along, with user fees.

Traffic relief can also be provided with private investment.

Seeing regional sales tax revenues flow in the 3 less urban, more rural and much less complex parts of the state that narrowly supported the tax referendum is not going to make Metro Atlantans want to vote yes for a T-SPLOST any more then they already don't.

Heck, seeing the sales tax revenues flow in other less urban, more rural and much less complex parts of the state may actually only serve to inspire more anger from Metro Atlantans towards state government as a whole.

ScottNAtlanta
ScottNAtlanta

@The Last Democrat in Georgia  

It depends on how you see transportation.  If you see it as a public good, or if you see it as a product.  The private sector doesn't care much for public goods, because the private sector values money above all things.  They prefer products they can sell and maximize their profit.  Thats why government has traditionally taken on this type work.  Private/public "partnerships" are nothing more than allowing private firms to collect taxes at a profit with interest.  Think about it...everyone pays a tax for a 1000.00 road (price added just to make easier to follow).  Because your elected official has so diminished tax collection by giving everyone and their brother special tax breaks...they dont have the money to build it.  If they had, they would have hired a private company that had the best bribe...meant BID for the work which should end up costing 1000.00.  Since they dont have the money...private company, Acme Roads, says we will front the money and build the road, but in return you gotta give us something...tolls for 100 years, non-compete clauses so you cant put a train anywhere near this new road, and by the way...you still have to maintain it (I kid you not...these are in several of these agreements elsewhere).  So this 1000.00 road MIGHT get built in the same time frame, and politicians will scream from the mountain top about how wisely they saved our tax dollars Private sector=good  government (ironically themselves)=BAD ...but wait...they saved nothing.  They just deferred it to a later date with an enormously higher price tag...you see, Acme doesn't care about transportation.  They care about making money, and thats not a bad thing, thats what they are supposed to do, but people need to call it what it is and not believe its some panacea.  That road that cost 1000.00 will probably end up costing 100,0000.00 just over a longer period of time (paid for by same tax payers)...classic bait and switch you see now in retirement accounts where the fees end up eating away hundreds of thousands of dollars people believe they will have when they retire.  Capitalism is fueled by greed only.  You have to have limits or it doesn't work for anyone.

The Last Democrat in Georgia
The Last Democrat in Georgia

@ScottNAtlanta @The Last Democrat in Georgia {{" Because your elected official has so diminished tax collection by giving everyone and their brother special tax breaks...they dont have the money to build it.  If they had, they would have hired a private company that had the best bribe...meant BID for the work which should end up costing 1000.00."}} 

...That's a good point.

Diminished tax collections either by way of excessive tax breaks to special interests or refusal to index fuel taxes to inflation so that it covers most, if not all, of the cost of maintaining the road network, is a major reason that the government does not have the money to properly maintain the road network.

{{"Since they dont have the money...private company, Acme Roads, says we will front the money and build the road, but in return you gotta give us something...tolls for 100 years, non-compete clauses so you cant put a train anywhere near this new road, and by the way...you still have to maintain it (I kid you not...these are in several of these agreements elsewhere)."}}

...Although non-compete clauses are not uncommon in long-term lease deals on toll roads, any term-lease deal where the public still has to pay the cost of maintenance is a really bad deal for the public and pretty much defeats the purpose of the deal, which is to eliminate the long-term cost of operating and maintaining the piece of transportation infrastructure in question.

The 2 most successful long-term lease deals in North America (on the I-90 Chicago Skyway and on the I-90 Indiana Toll Road) both include clauses that the lessee must pay all maintenance costs during the life of the lease.

The best term-lease deals pay for both roads and transit under the "Supercorridor" concept where the private investing/operating entity pays all costs of designing, constructing, operating and maintaining user fee-funded major roads and parallel and adjacent bus and passenger rail lines.

The "Supercorridor" funding concept could be applied to existing transportation corridors like the I-75 Northwest Corridor (I-75, I-575, US 41, W&A Railroad ROW) by eliminating the portion of fuel taxes that currently fund those state-owned right-of-ways and implementing user fees on each piece of infrastructure (in the form of distance-based congestion-priced variable tolls on Interstates 75 and 575, at grade-separated intersections on US 41 and in the form of distance-based fares on high-capacity passenger rail transit line within the historic Western & Atlantic ROW).

The "Supercorridor" funding concept also applies financing from real estate transactions where private funds are raised with the formation of a publicly-controlled real estate investment fund (hedge fund, etc) that buys land along transit lines and leases it out (along with parallel and intersecting major roads and transit lines) to private entities who sub-lease the land out to other private parties for the construction of transit-oriented development along said transit lines and major roads where applicable.

With good public-private partnerships that utilize the "Supercorridor" funding/logistics concept, public funding for roads and transit does NOT come from sales tax increases.

Instead, the ONLY public funding for transit comes from "value capture" property tax revenues along transit lines (where only property tax revenues from increased property values is used to pay for transit) and/or Tax Increment Financing (where only property tax revenues from new development that pops up along transit lines is used to pay for said transit lines). 

With the Atlanta region and North Georgia needing tens-of-billions of dollars in funding to fill our transportation needs, tapping into the overwhelming amount of private funding available is most-likely the ONLY way that all of our numerous transportation needs will ever be fulfilled, particularly in this political environment where raising taxes to pay for transportation needs for roads and especially transit is not an option.

The Last Democrat in Georgia
The Last Democrat in Georgia

@ScottNAtlanta @The Last Democrat in Georgia 

{{"Private/public "partnerships" are nothing more than allowing private firms to collect taxes at a profit with interest.  Think about it...everyone pays a tax for a 1000.00 road (price added just to make easier to follow)."}}

...Depends on the type of public-private partnership. 

In some public-private partnerships (in a traditional form of financing public roads and urban public passenger rail lines), the public puts up all of the money through transportation sales taxes (fuel taxes) to build a road and pays private engineering firms to design the road and pays private construction firms to build the road.

The government has to pay these private design and private construction firms to design and build the public road because design and construction likely will not necessarily be the area of expertise of a state or local transportation department.

In some public-private partnerships, the private design firm pays a large chunk of the cost of designing a public road and the private construction firm pays a large chunk of the cost of building the public road while the public pays the remaining majority of the cost of building the road in a method of transportation finance referred to as "Design-Build".

Private design and construction firms will often agree to this method of transportation financing because they figure that getting paid a reduced amount of something to work on the design and construction of a public road is better than getting paid nothing if the road is not built or other design and construction firms get the work.

The prospect of making at least a reduced profit over making no profit at all is the reason why design and construction firms will agree to finance large chunks of the costs of the design and construction of public roads through the "Design-Build" method of transportation finance.

The "Design-Build" method of transportation finance is currently being utilized by the State of Georgia to attempt to deliver the I-75/I-575 Northwest Corridor reversible HOT/HOV-3 Lanes project in Cobb and Cherokee counties (which is different from the earlier version of this project that Governor Deal backed the state out of which was a "Design-Build-Finance" project where the State of Georgia was going to enter into the type of BAD long-term non-compete lease agreement you alluded to where the state would have been prohibited from/financially-penalized for state-funded improvements to parallel corridors like road and transit improvements on the parallel U.S. Highway 41/Cobb Parkway and transit implementation on the parallel state-owned Western & Atlantic Railroad corridor...also, as you alluded to earlier, the state still would have had to pay a large chunk of the construction and maintenance costs on the reversible lanes because the project is not profitable due to its nature of only being utilized by limited amounts of traffic during peak hours...something that clearly illustrates that long-term lease agreements are NOT appropriate for every transportation corridor as there are clearly some corridors where they work better then others...The state of Georgia should be very thankful that Governor Deal had the wherewithal to back the state away from a really bad finance deal on the I-75 NW Lanes).

The "Design-Build" method of transportation finance is also currently being utilized by the State of Georgia to attempt to deliver the I-75 South Managed Lanes project in Henry County and will likely be used by the state to attempt to deliver the extension of the I-85 Northeast HOT/HOV-3 lanes in Gwinnett County.

Though all three toll lane projects in Cobb/Cherokee, Henry and Gwinnett counties will be contingent upon the State of Georgia being able to somehow come up with the remainder of the majority of financing to get the projects started, something that is a very-tall order at this point with a very-limited current road construction budget of only just under $300 million/yearly for one of the 10 most-populated states in the Union.

Also, as I just touched on, in some public-private partnerships (where the mode of transportation in question is the most revenue-producing), the private sector pays all of the costs of design, construction and continuing maintenance in return for getting to keep all of the revenues from the tolls on a road and getting to price the tolls on a road as needed so that 100% of all maintenance costs are covered by tolls and the road brings a profit the private company leasing the road from the public.

Politicians especially love these long-term lease deals on toll roads and toll bridges because it allows them to escape political heat for raising tolls to keep up with the inflationary costs of maintaining a road.

Allowing the private lessee to raise tolls as needed takes the issue of toll increases off of the table as a political issue because everyone understands that the public is no longer pay tax revenues to maintain that piece of transportation infrastructure in a successful lease deal (the public only pays to maintain the transportation infrastructure when they pay fees to use it in the form of distance-based tolls or fares).

The Last Democrat in Georgia
The Last Democrat in Georgia

@@ScottNAtlanta

Those are some great points.

{{"It depends on how you see transportation.  If you see it as a public good, or if you see it as a product."}}

...Transportation is a public good that has reached the point of needing private capital to be delivered to the public at the high level that the society and the economy needs to continue functioning at a very-high level.

{{"The private sector doesn't care much for public goods, because the private sector values money above all things.  They prefer products they can sell and maximize their profit.  Thats why government has traditionally taken on this type work."}}

...Those are some good points, but though the government is currently overwhelmingly the most dominant provider of road and passenger rail transportation in the United States, the government doesn't provide the public good of transportation in every case.

The passenger airline and freight shipping industries (air freight, water freight, road freight, rail freight, etc) are prime examples where the private sector is by far overwhelmingly the most-dominant provider of a public good.

The private sector is overwhelmingly the most dominant provider of a public good in the passenger airline and freight shipping/transporting industries because it has to be. 

There is no way that these critical public transportation and logistical services could be provided without the assistance of the private sector as there are just simply not enough public resources for the government to be the sole provider of these critical public goods.

As we are currently witnessing with regional ground transportation here in the Atlanta region, particularly with a lower-tax, smaller-government scheme, there are just simply not enough public resources available for the government alone to provide the level of road and passenger rail service that the Atlanta region needs to remain functional at a high-level both economically and when its comes to the region's quality-of-life.

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