The state of Georgia is reaching – some think has reached -- a critical point in terms of having sufficient transportation funding. But elected officials still have time to work to prevent a transportation funding crisis.

From the county government perspective, a comprehensive local and statewide transportation system in Georgia requires improved transportation funding on several fronts, including increased funding for urban and rural transit systems, rail, the aviation system, and ports. This year, as has been the case for several years, one of the most urgent areas of legislative concern for county governments is inadequate funding for the Local Assistance Road Program (LARP).

Counties rely on LARP funding to maintain the thousands of miles making up their paved road systems. However, funding for LARP and other local transportation needs have met less than a third of the need in Georgia counties over the last five years.

Local governments bear the brunt of road maintenance costs. The sobering facts are that local governments are responsible for 84 percent of the state’s roadways, which is the bulk of Georgia’s road network – a network that needs continual improvement and maintenance if the state’s economic strength is to continue, and indeed, extend to all regions of Georgia.

Yet counties still struggle to maintain their local roads with limited local funds and inadequate state transportation funding; local governments continue to face a growing backlog of road maintenance needs.

For the past few years, the Georgia Department of Transportation (DOT) has identified at least $100 million in county and city maintenance needs. However, DOT staff estimates that two to three times the amount of annual resurfacing needs exist but remain unidentified on the LARP priority list that counties submit. This means the backlog of maintenance needs could easily total over $300 million.

Additionally, at the current funding level, most local roads can only be resurfaced once every 50 years – while the state aims to resurface roads on the state system every 10 years.

So the fact remains that local road systems are deteriorating. Consequently, it is imperative that state and local elected officials take steps to ensure adequate road funding statewide which will in turn ensure an efficient and sound transportation system – critical to keeping Georgia competitive, and economically prosperous.

But it will be challenging. The goal of attaining adequate funding for Georgia’s transportation needs will require state and local elected officials, the business community and the general public to take tough, even bold actions to maintain and enhance Georgia’s transportation infrastructure.

What do we do? Through ACCG, county governments have pursued a variety of potential revenue sources, including an increase in the statewide motor fuel tax, the local option motor fuel tax and the transportation infrastructure fund (TIF). However, during the 2003 legislative session, ACCG’s general membership voted to work more closely on the transportation infrastructure fund – an innovative revenue source designed to gain support from both political parties as well as the general public.

ACCG has been working on this funding option with Georgians for Better Transportation, the Georgia Transit Association, and the Georgia Municipal Association (GMA).

Georgia county officials feel that the current legislative session is as good a time as any to generate discussion on the transportation infrastructure fund since Georgia’s transportation funding challenges remain the same today as they were prior to the November 2002 elections.

And the TIF could help address those challenges.

Mechanics of the TIF. The Transportation Infrastructure Fund (TIF) would entail a six percent fee, collected in addition to the existing state motor fuel taxes on the retail price of a gallon of gasoline. To limit the economic impact on Georgia taxpayers that would come from the increased costs of motor fuels, the General Assembly could provide for a tax rebate to Georgia households. The filing status of the state personal income tax and resident address would be used to calculate and mail the rebate for the TIF. Businesses would write-off TIF-related expenses on their state income taxes.

According to 2001 motor fuel sales, the TIF could generate approximately $450 million, and funds would be used for any local transportation need including LARP, urban and rural transit services and the state’s share of matching federal funds. If the General Assembly does not grant the rebate from general funds, the rebate would come out of the TIF. However, after providing the rebate to Georgia taxpayers, there would still be approximately $250 million available for transportation projects. And the funds that local governments would receive from the TIF would be more than the $30 million in LARP funds that has been the average state appropriation over the last five years.

Another appealing feature of the TIF is that a significant part of the funds would be certain to come from non-Georgia residents traveling through the state. State officials estimate that 30 percent of motor fuel receipts come from persons traveling through Georgia en route to other destinations. Additionally, with the six percent increase, Georgia would still have one of the lowest motor fuel tax rates among its neighboring states.

So Georgia would still be competitive in terms of gas prices, and it could become more competitive in terms of having high quality transportation infrastructure.

Tempering public reaction. Of course, with such a revenue plan, elected officials advocating the prospect would be fully aware of the public and political sentiments favoring “no new taxes.” To counteract this sentiment, the proposed rebate to Georgia taxpayers would essentially hold taxpayers harmless when implementing the TIF. While Georgia taxpayers would receive a rebate, citizens would also get improved transportation infrastructure – safer roads, better transit service and reduced congestion that they have been wanting, and, at least on the local level, expecting elected officals to provide.

ACCG has been discussing the TIF with several different groups including the business community, chambers of commerce, environmentalists, transit agencies, local government officials, Georgia DOT and the general public. We understand the importance of having support from these constituencies in order to get the Governor, Lieutenant Governor, and state legislators to really consider TIF and ultimately take action.

County support is crucial. While ACCG staff will be talking to legislators about the TIF and other strategies to increase local transportation funding, county commissioners and staff are urged to to talk to local legislators. As county officials, legislators are more inclined to listen to local elected officials’ ideas, and respond to requests. Accordingly, ACCG encourages all county commissioners to ask their legislators to seriously consider this revenue plan. Commissioners are also urged to explain to legislators that counties cannot properly maintain the hundreds of miles of paved road systems they are responsible for when the county only gets enough LARP funds to resurface just a few miles of local roads.

A work in progress. It is important to note that the TIF proposal is still a work in progress. While ACCG’s general membership adopted the concept of the TIF, we are continuing to work out the details of this revenue plan and our attorneys will continue examining any potential legal concerns.

Many of these details will have to be resolved when working with legislators as they draft the legislation that would implement the TIF. For example, a formula would have to be established for distributing funds from the TIF to local governments (such a formula could be based on lane miles, population, need or a combination of these factors) and determining what percentage of funds would go to transit, state matching funds, and local governments. Of course, with your suggestions and input, ACCG will certainly work to ensure that county governments receive adequate funding from the TIF for local transportation needs.

Other options. While ACCG’s membership voted to put greater emphasis on the TIF during the 2003 legislative session, the association is not putting all of its eggs in one basket. ACCG and county officials and staff will continue to work on other funding options as well.

For example, some key legislators have expressed interest in directing to GDOT a percentage of motor fuel sales tax that originally went into general funds. According to the proposal, the additional funds directed to GDOT would be used for any local transportation needs. While the TIF would generate more funds and come closer to meeting the needs of local governments, ACCG certainly will not rule out supporting other viable funding options.

Additionally, counties’ work on the TIF will keep the urgent need for increased local transportation funding in front of legislators.

Gaining public support. Legislators on both sides of the aisles have suggested to ACCG staff that our efforts to increase local transportation funding would be enhanced by educating the general public on local transportation funding needs and gaining greater public support for measures to increase transportation funding. Before stepping out to support measures such as the TIF, legislators want some political cover by having a significant level of public support for measures such as the TIF.

ACCG is responding to this advice by developing a video on local transportation needs in conjunction with the Georgia Municipal Association. The video will highlight the critical transportation needs facing local governments and is intended to raise awareness and educate members of the General Assembly and the general public about the critical importance of well-maintained local roads to safety and economic development.

The video is slated for completion by the end of January 2003. Each county will receive a copy of the video and it will be shown to state legislators at various meetings.

The video will also be presented at Chambers of Commerce and other community meeting venues so that the business community and the general public will see the challenges local governments are facing in trying to maintain local road networks.

When legislators, the business community, the general public and other groups see the significant challenges that local governments contend with in trying to maintain their transportation infrastructure -- and the consequences of deteriorating local roads -- hopefully, legislators and the general public will be motivated to take actions to increase transportation funding.

Critical factors. Finally, the TIF or other measures to increase transportation funding could become more critical considering the GARVEE bond financing mechanism which the Barnes Administration had intended to use to finance several transportation projects, including new HOV lanes, express buses, arterial road improvements and commuter rail lines.

Under the GARVEE bond financing mechanism, the state issues bonds and then plans to pay back these bonds with federal transportation dollars that it expects to receive each year. However, this financing method could become problematic if the state does not receive the federal funds that it anticipated. In such a situation, the state would have to come up with other state sources, such as gas tax receipts, to cover the bonds.

Obviously, this could translate into fewer transportation funds available for local transportation needs such as LARP. Counties already struggling to maintain their road systems could find themselves in a deeper crisis situation if even fewer state transportation dollars become available because funds are going toward debt service. In fact, the entire state could find itself in a crisis situation with road construction and maintenance projects put on hold, as well as transit and commuter rail projects.

Projects in the pipeline. There are several important projects already in the pipeline for the metro and rural areas that the Barnes Administration had intended to fund using the GARVEE bond financing mechanism. Consequently, it will be interesting to see how the Purdue Administration gets these important projects completed. If the administration scraps the GARVEE bond financing plan, it will have to identify alternative revenue sources.

Additionally, the current gas tax rate is not generating sufficient revenue and the gas tax receipts have been declining.

Since LARP is funded from gas tax receipts, even fewer dollars would be available for local road maintenance and fewer dollars would be available for other statewide transportation projects. Unfortunately, the state cannot keep pace with the growing transportation needs with reduced transportation funding sources (such as the motor fuel sales tax and federal funds). Consequently, state and local officials need to continue exploring alternative revenue sources. And the TIF is an option that ACCG recommends be seriously considered.