In name, the proposed 1 percent sales tax to fund transportation projects would sunset within 10 years. In reality, the list of these projects for metro Atlanta makes one thing clear: This is no 10-year tax.
On the contrary, voters should consider it the beginning of an approach to infrastructure financing on which the sun never sets — one that is fraught with implications for our entire revenue structure.
The draft list of projects, due for final approval by 21 local officials next month, features several items that would receive less than state experts say they’ll cost. That includes four transit projects that come up a total of $900 million short:
Perhaps these projects, and some short-funded road work, will defy history and come in under budget. More likely, they’ll need more money to reach their destinations. Until then, the ridership for these four projects of 35,800 people — 1.6 percent of metro Atlanta’s 2.2 million commuters today — won’t fully materialize.
And that doesn’t even count the billions of dollars worth of projects — such as a light rail line to the Gwinnett Arena and a northward MARTA extension along Ga. 400 — that are getting “only” tens of millions of dollars in planning funds.
Those projects aren’t going to be “teed up” with seed money and then forgotten. Taxpayers will be asked to renew the penny tax for another decade — and beyond.
That’s not necessarily news: Tax supporters have said all along that the region has needs that will take decades to fill. But what’s left unsaid is that approving today a permanent regional sales tax ties the hands of future elected leaders.
Many Georgians favor shifting more of the tax burden to consumption. Proposals ranging from former Speaker Glenn Richardson’s GREAT Plan, to this year’s recommendations of a special council on tax reform, to the FairTax for the federal government, all rely on taxing consumption more heavily and lowering other taxes.
Yet, our patchwork of dedicated SPLOSTs (special-purpose local-option sales taxes) means consumption is already taxed heavily. The 8 percent rate in Atlanta, for instance, is already higher than the average rate of 7 percent in Florida and approaching the 9.4 percent average in Tennessee — two neighboring states where individual income isn’t taxed at all.
Add another penny for this regional T-SPLOST, and we’ll have shifted toward consumption without any drop in income taxes or other levies. And without leaving much leeway for doing so in the future.
The current speaker, David Ralston, says ambitious tax reform is still near the top of his agenda for 2012 — even as there will be a renewed push under the Gold Dome to move the date of the T-SPLOST referendum to November to make its passage more likely. Does anyone see a potential conflict?
It may be that metro Atlanta’s voters prefer adding a penny tax here and there with concrete purposes over a system with less spending accountability. But that’s a decision to be made with clear eyes about what it will allow down the road, and what it will not.
– By Kyle Wingfield