Tough choices loom as Georgia maps its road(s) ahead
Few people expected Georgia’s legislators to pursue any big new transportation initiatives this year. So far, legislators are meeting that expectation.
The rejection of the T-SPLOST in nine of Georgia’s 12 regions is still fresh, and most state agencies face budget cuts amid stagnant tax revenues. Yet, this is a critical moment for our state to figure out how to pay for transportation infrastructure.
But not only our state. All signs indicate the so-called budget sequester will force Congress to cut spending by tens of billions of dollars a year. And that will be just “the first of many large cutbacks” affecting transportation, predicts Robert Poole.
Robert Poole
“There will be no more ‘nice to have’ things,” says Poole, co-founder and head of transportation policy at the libertarian Reason Foundation. “If we’re going to continue … to invest in transportation, the states are going to have to pick up the ball.”
But, Poole added during a Thursday speech at a Georgia Public Policy Foundation event in Cobb County, there’s a catch.
Federal funding for transportation stands to fall sharply for two chief reasons. Gas-tax revenues are in the middle of a long-term decline as cars become more fuel-efficient, and Congress will be hard-pressed to supplement those funds. In Georgia, federal money for roads and transit in 2030 stands to be nearly a third lower than in 2009.
The catch: States rely on their own gas-tax revenues, also trending downward. So, “unless there is the political courage to double gas tax [rates], which ain’t gonna happen,” Poole says, states must pay for more of their transportation infrastructure and do so from a new revenue source.
The best way to do that, he argues, is to shift from a “per gallon” charge, a la the gas tax, to a “per mile” charge. Tolls are the prime example.
As states face tighter budgets, thanks in large part to pensions and health care, Poole says they’ll need to shift from “funding” infrastructure with cash to “financing” it by issuing bonds or partnering with private investors. Either way, toll revenues would pay back the cost of the projects over a period of decades.
Unfortunately for Georgia, there’s another catch: We’ve been moving in the opposite direction.
In 2009, the DOT reversed course from the “financing” model and went back to cash funding. In 2011, the state pulled the plug on a public-private partnership (PPP) to build reversible toll lanes on I-75 and I-575 in Cobb and Cherokee. By the end of 2013, Gov. Nathan Deal has promised, the state’s only toll will come down from Ga. 400.
The abrupt move on the 75/575 project was particularly harmful, Poole says: “People don’t forget that.”
There’s some $200 billion worldwide waiting to be invested in public infrastructure, he says, and investors will shy away from places with “political risk.”
Places like Georgia, where companies have spent millions on PPP bids that never panned out. Poole calls our reputation for political risk “pretty bad” and says Georgia needs a series of incremental successes to become competitive with states like North Carolina, Texas and Virginia, which are tapping into that $200 billion pool of capital.
If legislators can’t spend more on transportation this year, a cheap alternative would be to spend time figuring out how we can get back in the game of attracting private capital to improve our public infrastructure.
– By Kyle Wingfield
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98 comments Add your comment
Jefferson
January 28th, 2013
10:58 am
The new pro-dealer tag tax will result is less revenue for counties, bought and paid for.
Dusty
January 28th, 2013
11:12 am
MarkV
President OBAMA is the ONLY president we have right now. The debt is rising right NOW.
You ignore our present problems like they don’t exist. They do. The president adds even more.
You ignore the costs of his “solutions” and blame it on the defense of our country . But defense costs have not been lowered under this president, the one good thing he has done
Ignoring our problems does not make them go away nor does blaming them on some one else in the USA. The president cannot escape responsibility for his direction. of this country even as you try to blame someone else. It won’t work.and it isn’t working.
Finn McCool (The System isn't Broken; It's Fixed)
January 28th, 2013
11:16 am
I hate to tell you but Reagan is dead.
ie, I refuse to ever take responsibility and don’t expect it of my party or its leaders.
Finn McCool (The System isn't Broken; It's Fixed)
January 28th, 2013
11:18 am
Talking Reagan and debt is like talking W and 9/11.
It isn’t his fault. Stop talking about it. It’s his predecessor’s fault…..or its the fault of the guy who came after. It’s not the conservatives who screwed up. We are all perfect. We don’t take responsibility for anything unless we can all agree it had a positive effect.
Finn McCool (The System isn't Broken; It's Fixed)
January 28th, 2013
11:21 am
You ignore our present problems like they don’t exist
No, we know they exist. We also know that they shouldn’t be our sole focus. The debt is going to continue to rise – there is nothing you can do in a down economy to stop that – except work on fixing the economy which is the focus of the administration.
You kids just sit back and relax and let us adults continue to work on these problems, k?
MarkV
January 28th, 2013
11:22 am
Dusty ,
It is becoming more and more difficult to understand your insistence that you can judge the President by some absolute measure, without a comparison with any other one. It is a denial of reality. This country has had a national debt as long as anybody here remembers. The only legitimate criticism is a relative one. You could make one regarding President Obama, but you would then have to answer a question of the causes.
Rafe Hollister preparing for an Obamanist America
January 28th, 2013
11:28 am
Finn/Dusty,
FWIW, (not much for sure), Reagan increased our per capita national debt about $4500 in eight years. Obama has increased our per capita national debt about $12,000 in four years. Growth is exponential Finn!
Logical Dude
January 28th, 2013
11:31 am
1) By the end of 2013, Gov. Nathan Deal has promised, the state’s only toll will come down from Ga. 400
Well, he should have just let the toll expire as planned, because “redoing” the toll makes everyone in Georgia doubt anything the Government says.
2) shift from a “per gallon” charge, a la the gas tax, to a “per mile” charge..
Or, maybe put a percentage on each dollar instead of a percentage on each gallon. As gas prices have risen, state taxes have gone down because people are using less gas, because they can’t afford as much travel. If taxes were linked to price of gas instead of quantity of gas, the state would have a lot more revenue to use.
Of course in 10-20 years, a mileage process will be needed because there will be more electric driving. But don’t penalize those electric/hybrid cars now because we need the cleaner air/health as a priority (which saves more state funds due to preventable illness that would otherwise be paid by the state)
Cheesy Grits is gone but not forgotten
January 28th, 2013
11:32 am
Orr national debt in 200 years of a Nation was 900 billion.
Reagan tripled that in 8 years.
Give all the money to rich people because we are not to be trusted with it. We were told it would trickle down.
It never did.
Finn McCool (The System isn't Broken; It's Fixed)
January 28th, 2013
11:34 am
This is where the Cons have us headed:
Students at Pa. school must ask for toilet paper
“We can only provide toilet paper to the Charter Schools.”
Rafe Hollister preparing for an Obamanist America
January 28th, 2013
11:36 am
MarkV
The problem is not that we have a national debt, we have always had one as you point out, it is that the debt is so large. Who do you blame, pick your man, but that doesn’t get you anywhere. Experts have predicted that if we tow the line and do not make any changes, either increasing or decreasing our deficit, and interest rates remain low, that in 10 years our interest on the debt will exceed 1T dollars a year. In a 4 T dollar economy that is unsustainable. If we increase spending, we get there much sooner. If interest rates return to normal 5-6%, we may be insolvent.
So, to criticize Dusty for keeping her eye on the problem is ridiculous. More people should be focused on reducing the debt and growing the economy, instead of trying to redivide the ever shrinking pie.
MarkV
January 28th, 2013
11:44 am
Rafe @11:36 am
1. I have made the point several times that the national debt is, in the long run, troublesome.
2. It is not ridiculous to criticize Dusty for “keeping her eye on the problem.” What is the purpose of what she is doing?
Just Saying..
January 28th, 2013
11:44 am
“As states face tighter budgets, thanks in large part to pensions and health care…”
Again, the amount of federal Medicaid money Leader Deal turned his back on?
SBinF
January 28th, 2013
11:45 am
“Just got back from NYC and yes, while there are cabs everywhere, it’s cheaper to fly 1,000 miles on an airplane to NYC than it is to go from LaGuardia to Manhattan and back (less than 30 miles total).”
Hyperbole, much?
It doesn’t even cost close to that much to get a cab from the airport to Midtown. Heck, you can get an express bus round trip for 24 bucks from the airport to Grand Central Station.
Dusty
January 28th, 2013
11:47 am
Well, before I leave, I must get back “on subject”, the problem of maintaining and building good highways in Georgia.
Considering the fact that men do not make good shoppers except for automobiles and tickets to football games , I, a good feminine shopper, suggest we have the Great Beltway Bonanza Sale. (It could be the PPP or
ublic Private Partnership but that gives a tinkle sound with bad connotations.)
The SALE price would be $15,000/mile and you could buy all you want and have YOUR NAME on it for every driver to see. You know. LIke a nice stretch called Dusty’s Dream Drive.
Forget stadiums, swimming pools with fish and that sort of thing. Have the Arthur Blank Beltway, The Perdue Pathway, the Wingfield Wonderway, the Cheesy Chumpway.!!!!
We will have new roads in no time. Send in your taxfree contributions NOW. Get YOURS before we run out of good locations!!
No cash but checks and credit cards accepted. NO SHIPPING CHARGES!
td
January 28th, 2013
11:50 am
Just Saying..
January 28th, 2013
11:44 am
“As states face tighter budgets, thanks in large part to pensions and health care…”
Again, the amount of federal Medicaid money Leader Deal turned his back on?
This money was to add to the Medicaid roles and the Federal money would NOT help pay for the cost of money currently being spent. How much would that have cost the state over the next 10 years? I think I had heard it would have added at least a billion a year after the first three years. Where are we going to get that billion from? Transportation? Education?
Just Saying..
January 28th, 2013
12:10 pm
td:
1) I’m sure you know who pays for indigent health care now. You and I. After the health issue treated is at an advanced, more costly, stage.
2) Your and my federal taxes WILL pay for expanded Medicaid. Just in other states.
southpaw
January 28th, 2013
12:16 pm
Cheesy Grits is gone but not forgotten
January 28th, 2013
11:32 am
Orr national debt in 200 years of a Nation was 900 billion.
Reagan tripled that in 8 years
————————————————————————————-
That would be an addition of $1.8 trillion in 8 years. How much has been added in the past 4? Feel free to use constant dollars instead of current dollars, if you wish.
Let me put it another way. Would you rather (a) start at $100 debt and quintuple it, to $500, or (b) start at $100,000 and double it, to $200,000?
Reagan started with a smaller base of debt. Tripling it took a lot less money 30 years ago than it does now.
Tiberius - pulling the tail of the left AND right when needed
January 28th, 2013
12:25 pm
“Most of this countries (sic) debt was run up under Democrat-controlled Congresses.”
Fixed your typo, Cheesy. No thanks needed.
md
January 28th, 2013
12:25 pm
“They subsidize things for the very poor backwards rural south.”
Yeh, like military installations and all their older relatives that moved south to retire…….
Jefferson
January 28th, 2013
12:26 pm
The state’s leaders are failing on building a future for GA. It won’t be free.
Tiberius - pulling the tail of the left AND right when needed
January 28th, 2013
12:29 pm
As to the topic du jour, just double the damned gas tax and be done with it. This legislature (both sides of the aisle) are incapable of providing “elegant” solutions to our transportation issues, so it’s much better to go with the brute force solution.
Ray
January 28th, 2013
12:44 pm
Georgia is fickled. It promotes ideas, even codifies them into law and a couple of years later does a complete reversal. Do you remember it wanted to attract seniors to retire in Georgia? Florida and North Carolina were very competitive and attracting wealthy seniors and Georgia wanted a piece of that action. So it passed tax laws that phased in tax exemptions on retirement income (very generously defined). And, two years later reversed itself. How would you like to be one of those seniors that moved here, invested heavily in real estate and had the rug pulled out from under them? The audacity of Georgia know no limits!!!
Just Saying..
January 28th, 2013
1:01 pm
Tiberius – pulling the tail of the left AND right when needed
January 28th, 2013/12:29 pm:
“As to the topic du jour, just double the damned gas tax and be done with it. This legislature (both sides of the aisle) are incapable of providing “elegant” solutions to our transportation issues, so it’s much better to go with the brute force solution.”
Holy smokes!
I agree with Tib!
Cletus
January 28th, 2013
1:13 pm
“All signs indicate the so-called budget sequester will force Congress to cut spending by tens of billions of dollars a year.”
Won’t happen. Long as the Treasury can sell bonds to the Chinese @ near zero interest and the Fed can print billions of Quantitative Easing dollars the good times will roll.
We’ve heard this federal budget meltdown prophecy forever but it’s about as likely as a zombie apocalypse.
Aesop's Fables and other Lib Economic Theories
January 28th, 2013
1:53 pm
Sandy relief bill will eat all revenue from Obama tax hike on ‘wealthy’…
Need another tax hike!
And let’s raise the debt ceiling!
Or it’s over the kkkliff!
allah akbar!
Can I get a duh?
Dumb and Dumber
January 28th, 2013
1:56 pm
The only “major” road project it the last 10 years in metro Atlanta has been the $110 million spent by Governor Perdue to turn the I-85 HOV lanes into toll lanes. The tolls don’t even cover the cost of operating the system. When Obama’s Federal DOT Secretary came to town he called the whole concept misguided and a waste of money — but it went forward anyway. So much for Sonny’s great leap forward for transportation in metro Atlanta (meanwhile tax money from metro Atlanta is used to build nifty four-lane roads in South Georgia and Speaker Ralston’s district).
Regional transit and commuter rail are dead in the water in this state. MARTA may be able to limp along for another year or two; the new director seems to understand that the state won’t lift a finger to help so at least he’s a realist. The only thing the legislature will fund this year, or next year, or the year after that, is roads; and I’m not sure anyone trusts the “Enron-style” accounting at Georgia DOT.
Maybe the legislature can play small ball and look at the mess of suburban transit agencies and try to get them to at least work together. GRTA took federal funding and runs bus lines that compete with Gwinnett, Cobb and MARTA. We don’t need an empty GRTA bus heading into downtown from Discover Mills followed by an empty Gwinnett bus heading into downtown from Discover Mills.
That taxpayer funded transit agencies should compete with each other on the same routes is beyond stupid, maybe “imbecilic” if that is even a word.
For transit — just unify the suburban hodgepodge and maybe, just maybe, try some east-west routes (Marietta-Alpharetta-Lawrenceville –on god knows what congested road). Or maybe just have GRTA give it up (I do believe their federal funding is about to expire and let’s hope the feds will stop funding that nonsense) and just stop competing with Cobb, Gwinnett and MARTA.
I seem to recall the Tea Party and Sierra Club were going to offer solutions this session after they “worked together” to kill T-Splost. I wonder where they are now? Anyone seen them on a milk carton?
So transit is dead and roads are congested while the legislature proposes expanding where you can
carry your guns. Now that’s important.
Okely-Dokely. Situation normal.
Enjoy your car!
catlady
January 28th, 2013
2:44 pm
Actually, Kyle, let’s keep the bar low. We just want them out of town without doing the common people any more damage!
R U Kidding Me?
January 28th, 2013
3:28 pm
The Reason Foundation is a Liberterian based think tank with believes in less government and more privitation of government services. A perfect match for the current political climate in this state and country. Bob Poole is one of the most respected transportation experts in America. I heard his comments and was amazed at all of the attendees, including at least a dozen legislators, who eagerly agreed with Bob’s recommendations and assessments. I was a nice event, and I imagine that 95% of those attending we’re certain that Georgia was implementing Poole’s plan. It was a shock to most,Im certain, when it was pointed out that Georgia is doing EXACTLY THE OPPOSITE of what Poole says we should be doing. In fact, he said that Deal’s decision to scrap public/private partnerships had destroyed Georgia’s credibility with domestic and international investors perhaps beyond repair. One more example of how our conservative GOP simply cannot govern. This was a real eye opener as to just how far Georgia has gone backwards in the past 10 years.
Finn McCool (The System isn't Broken; It's Fixed)
January 28th, 2013
4:04 pm
Allah Akbar and kkk in the same post? It sounds like AJC Management/ Andy is back.
JDW
January 28th, 2013
4:05 pm
“I hate to tell you but Reagan is dead. ”
Unfortunately his legacy, acolytes (see Grover) and many of the wrong headed supply side theories spawned by his Administration live on.
Finn McCool (The System isn't Broken; It's Fixed)
January 28th, 2013
4:10 pm
U.S. citizens suffer from poorer health than nearly all other industrialised countries, according to the first comprehensive government analysis on the subject, released Wednesday. Of 17 high-income countries looked at by a committee of experts sponsored by the National Institutes of Health, the United States is at or near the bottom in at least nine indicators. These include infant mortality, heart and lung disease, sexually transmitted infections, and adolescent pregnancies, as well as more systemic issues such as injuries, homicides, and rates of disability.
alternet.org
It’s still the wild wild west in the US!
Tiberius - pulling the tail of the left AND right when needed
January 28th, 2013
4:27 pm
Is there a point to your 4:10, Finn?
‘Cause a blanket statement with no backup or context is useless in intelligent conversation.
Aesop's Fables and other Lib Economic Theories
January 28th, 2013
4:35 pm
finn’s been at the huff and puff getting stoked. Or is it pmsnbc?
Tiberius - pulling the tail of the left AND right when needed
January 28th, 2013
4:36 pm
See, because discussing health care quality when using metrics such as infant mortality, adolescent pregnancies, injuries, homicides and disability rates is disingenuous.
Hillbilly D
January 28th, 2013
4:41 pm
Don’t like the mingling of public and private funds. In my experience, it always leads to bad things. If it’s a viable private project, then somebody will build it. If it’s not, then they won’t. Anything else usually leads to a sweetheart deal, which is okay I guess, if you’re the right person’s sweetheart but most of us ain’t (nor do we want to be, just to clarify).
More roads only bring more people. Atlanta can do whatever it wants to but in my neck of the woods, we’ve got too many people already. Don’t need anymore.
Tiberius - pulling the tail of the left AND right when needed
January 28th, 2013
5:00 pm
We had one of those public / private partnerships come talk to us about GA400 back when I was in office.
Long on possibilities, but short on specifics.
yuzeyurbrane
January 28th, 2013
5:05 pm
Kyle, the expert you quote fails to analyze financial impact on citizens of being ripped off on private highways and the large profits flowing to the 1% and graft flowing to the politicians.
Tiberius - pulling the tail of the left AND right when needed
January 28th, 2013
5:14 pm
“Kyle, the expert you quote fails to analyze financial impact on citizens of being ripped off on private highways and the large profits flowing to the 1% and graft flowing to the politicians.”
And of course, you’re going to detail all that for us right now, aren’t you, yuz?
I mean, since you’re such an expert on those things. . . .
Kyle Wingfield
January 28th, 2013
5:14 pm
yuze @ 5:05: You can’t make a blanket statement about whether a PPP will mean citizens are “ripped off.” PPPs are not necessarily good or necessarily bad; it all comes down to the contract that is drawn up. This is true for any kind of privatization.
This is also true, btw, for the large number of contracts DOT already issues in which a private company is contracted to build the project. The only difference, really, is that in PPPs the private company bears more or all of the risk (of the project costing more than estimated, of the toll revenues coming in lower than estimated, etc.). There’s a trade-off there and, yes, part of it is that the company in question makes a larger profit than if the state shelled out all the upfront money and bore all the risk. Of course, part of the trade-off now is that we only get the infrastructure we can pay for now in cash; PPPs would allow us to build more, and more quickly. Is that worth letting a private company make more profit?
Say it with me: It depends on the contract.
Kyle Wingfield
January 28th, 2013
5:16 pm
“If it’s a viable private project, then somebody will build it.”
The problem with that, Hillbilly, is that a private company can’t just go out and build, say, three new reversible lanes on Ga. 400. There’s always going to be a public component to these infrastructure projects. The question is: What should the public-private balance be?
Hillbilly D
January 28th, 2013
5:29 pm
Kyle
In my opinion, it should be a government project. They can hire private companies to build it but that’s as far as it goes. Even that has enough room for shenanigans. Remember the bid-rigging scandal?
md
January 28th, 2013
6:34 pm
“Long as the Treasury can sell bonds to the Chinese @ near zero interest and the Fed can print billions of Quantitative Easing dollars the good times will roll.”
Are you not paying attention?
China is not happy with QE as it affects their holdings…..I doubt they will just keep buying as long as we keep devaluing the very item they are buying……
md
January 28th, 2013
6:40 pm
“Of 17 high-income countries looked at by a committee of experts sponsored by the National Institutes of Health, the United States is at or near the bottom in at least nine indicators. These include infant mortality, heart and lung disease, sexually transmitted infections, and adolescent pregnancies, as well as more systemic issues such as injuries, homicides, and rates of disability.”
So folks in other countries are making better choices…..and?
Heart and lung disease…..yep, those cigarettes and Big Macs just jump right up to our mouths, I have a dickens of time keeping them away from me, all day long they are just flying at me from all directions……
Homicides…..have to laugh that the south side of Chicago is shooting each other left and right and some poor soul has an agenda to include it in their healthcare data…….
Teenage pregnancies……come on man……….
STD’s…….yep, those too. Best be on guard when those little buggers come at you…….
md
January 28th, 2013
7:58 pm
And Finn, the US doesn’t have a healthcare problem, it has a culture problem…..
Tiberius - pulling the tail of the left AND right when needed
January 28th, 2013
8:25 pm
Technically, md, the U.S. DOES have a health care problem.
It’s called Obamacare.
lynnbo
January 29th, 2013
9:55 am
Pres. Obama is spending $1.6 million tax dollars to fly out to Vegas to give a speech on amnesty for illegal workers. We won’t need roads because we won’t be able to afford cars once the new Americans keep wages low and we have to pay for their welfare.
Roads do not matter if you are too poor to buy anything.
So problem solved, the rich get richer and the poor get to be democrats!
Doug B
January 29th, 2013
12:07 pm
“Few people expected Georgia’s legislators to pursue any big new transportation initiatives this year.”
Strange words from someone who said all along that there will be a plan B, Kyle.
I don’t see how PPP’s help the situation. We can tax ourselves and pay for it or have a public company charge us to pay for it. Either way, we pay for it, but one of the methods adds inconvenience and a profit margin. We just need less gutless leaders to force the public to realize that taxes have uses.