Everyone knows our economy is not what it used to be, but not everyone knows how bad one industry is that affects the quality of life of almost everyone in our society: transportation funding.
Transportation infrastructure is the backbone of our economy. Not only does our transportation system get people to the workplace, it also makes possible the movement of goods and services that has dramatically fueled our economy for the last century. Unfortunately, funding for new transportation projects is woefully behind the current demand.
A vast majority of funding for roads and bridges comes from gas tax. We all pay this tax every time we fill up at the gas station. Most states local gas taxes are higher than the Federal 18.4 cent per gallon tax, so most of the taxes collected never leave the state. In Georgia, the total per gallon tax is 47.8 cents, which means 29.6 cents/gal stay in state while 18.4 cents/gal goes to DC.
The federal gas tax, which supports state transportation projects, has lost 41% of its value since it was last raised in 1993. The average state has not increased its gas-tax rate in more than a decade, and 14 states have gone 20 years or longer without an increase. But while state gas taxes remain flat, the cost of paving roads and building bridges inevitably rises almost every year, often at a rate higher than general inflation. After adjusting for construction cost growth, the average state's gasoline tax rate has effectively fallen 20% since the last time it was raised. Diesel taxes have fallen 18%. Today's state gas taxes make up a smaller portion of family budgets than at any time since the tax was first widely instituted in the 1920s. A 10 cent per gallon increase would cost today's typical driver $4.31 per month.
Unfortunately, the gas tax funding system in its current state will not allow the US to continue to sustain generations of a quality transportation system in the future. Other countries around the world such as India and China are spending many more times the amount of money on their infrastructure than the US. As it stands now, we can barely fund maintenance of our current system. We need a better way.
My home state of Georgia has an innovative idea to solve this shortfall. In 2009 the state legislature passed a law that will allow voters in 2012 to decide whether they want to add a one percent sales tax to go to transportation funding and supplement the existing gas tax.
Here is an overview of the law:
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Creates 12 special tax Districts based on Regional Commissions boundaries
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Each District can levy 1% sales tax for up to 10 years
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Individual Counties cannot opt out
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Money raised in District stays in the District
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Money is not subject to Congressional District Balancing
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Project criteria established by Roundtables
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Roundtables ultimately select projects
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Vote in July 2012 (Primary Election)
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Funds start flowing in 1st quarter of 2013
Proceeds of the tax may be used on administration, engineering, property acquisition, construction, maintenance and operations. Projects have already been agreed upon by the Regions and includes any new or existing airports, bike lanes, bridges, bus and rail mass transit systems, freight and passenger rails, pedestrian facilities, ports, roads, terminals, and all activities and structures useful and incident to providing, operating, and maintaining the same.
An education campaign will be starting this spring focusing on three major benefits of the new funding:
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Safety Improvements – funds will be used to improve safety of the traveling public in Georgia.
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Attract jobs to Georgia – without increased funding to address the transportation needs in Georgia, businesses will locate in other states.
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Local projects – funds collected in a region will be applied only to projects in that region.
Georgia currently invests less per capita in transportation than any other state except for Tennessee. Also, Georgia has one of the lowest state gas taxes in the United States. If voters in all regions approve this initiative, transportation funding in Georgia would be close to doubling the existing program. Without new investment in infrastructure, the state will not continue to enjoy the job and opportunity growth we've had in the past, nor maintain the quality of life in the future.
If you live in Georgia, will you vote yes July 2012 to pass this piece of legislation? For those living outside of Georgia, what innovative ideas have you seen that are helping solve our nation's transportation funding issues?