So is our best chance of raising the gas tax on a state level (which we all know needs to be done) to carve up each state, and let the smaller regions decide on the tax for themselves? Officials in Georgia are putting a similar idea to the test.
The Economist reports that Georgia, a state that houses drastic urban diversity (there’s Atlanta, home of Dante-esque traffic, and then a smorgasbord of tiny rural towns surrounding it) is dividing up and letting regions set gas taxes based on road use. Their reasons for doing so are logical — while Georgia was the third fastest-growing state between 2000 and 2006, it’s infrastructure spending is 49th out of 50 in infrastructure spending per capita, while its gas tax is the second-lowest in the country. And, as with most states that have a staunch urban-rural divide, the legislature has been bitterly divided over which infrastructure projects to spend money on — and how to pay for them.
As such, Georgia governor Sonny Perdue found himself looking for a compromise, which he eventually signed into a transportation bill. The Economist describes the bill as follows:
[It] divides Georgia into 12 regions, and gives each the power to decide on its own transport projects. Voters in each region will decide by referendum whether to approve a one-cent increase in the sales-tax to pay for those regional projects. Atlanta stands to see as much as $790m through the new tax.
The bill will also help MARTA, Atlanta’s woefully inadequate urban-rail system. It is the largest in the country to receive no state funding; it relies instead on passenger revenue and a 1% sales tax in the two counties it serves. It has long been required to spend half its sales-tax revenue on capital projects, which has starved its operating budget. The bill removes that requirement for the next three years. That will not make MARTA any more effective, but it may stave off some of the service cuts it faces.
While it’s not a boon for public transit, it is a start — and a move that makes a lot of sense when you consider that more and more people are moving to urban areas, necessitating more infrastructure investment in those high-population regions. Meanwhile, the political structure can stonewall urban regions from getting the funding they need, by voting against state-wide measures — like tax raises. So why not allow high-population regions of a state to legislate transportation as they see fit?
Granted, Atlanta residents may have an objection — the urban areas of a state are key economic drivers in the state’s GDP, and provide economic benefits for every resident of the state whether or not they pay Atlanta’s higher gas tax. But the alternative is to keep letting Atlanta lag behind in infrastructure development, and funding.
UPDATE: This post has been appended. We originally stated that the new bill would allow the state subdivisions to raise their gas tax if they saw fit. It does not. Still, would it be so bad if high-traffic urban areas were allowed to collect a higher gas tax if they so chose?
June 28th, 2010 at 12:53 pm
Is there any concern about the negative incentives this creates? For example, a lower gas tax in rural and exurban areas would conceivably encourage those people that drive the most already to not reduce their use or provide any incentive to take public transit? Additionally, the encouragement of sprawl into those areas, where people will be able to routinely fill up their gas tank near their home before or after their commute?
I’m not saying that this is a bad idea by any means, but it seems, contrary to the fact that this will boost a particular region’s coffers for sorely needed infrastructure improvements, that the mid-term and long-term incentives actually work against the overall goal. To have the desired effect, they would want to tax rural and exurban areas at an even higher rate, as those are the people that do the most commuting.
Of course, if the regions are large enough so that it is unlikely that someone would live in one region and commute to another because of sheer distance, then I’m just plain wrong.
June 28th, 2010 at 1:00 pm
This article is slightly misleading. The new law in Georgia allows a 1% regional sales tax to be implemented on nearly everything, however one key exemption is this new tax will not be applied to gasoline. The new tax is also not based on road use, some funds will be distributed to local governments based on formulas that includes road mileage, otherwise there is a prioritization and selection process laid out in the law that each reagion must go through to select projects.
June 28th, 2010 at 2:39 pm
Corey is correct.
The article didn’t get it wrong, but the Infrastructurists interpretation is wrong.
Georgia’s new transportation bill will have absolutely no effect on gas taxes. It will simply allow voters in each region to vote for a 1% regional sales tax to fund specific transportation projects within that region, and this tax specifically will NOT be applied to gasoline.
I *wish* Georgia would raise it’s gas tax to fund transportation projects, but for now it remains one of the lowest gas taxes in the nation.
June 28th, 2010 at 8:25 pm
In fact, this new law seems to be the opposite of what they should be aiming for. By increasing the sales tax, theyre forcing everyone to pay for more roads, regardless of whether they drive or not.
June 29th, 2010 at 6:37 am
I’m not sure that raising the gas tax would help. I know my home state and I believe most around it have raided the transportation trust fund (the recipient of the gas tax revenue) to pay general fund shortfalls leaving no money for transportation projects. Then they cut the portion of the gas tax sent back to local jurisdictions by 90+% leaving large shortfalls in local transportation maintenance funds
June 29th, 2010 at 3:02 pm
I’ve been hoping you’d do an article on Atlanta’s transit problem. This needs to be pushed so much. And you’re absolutely right about the urban/rural power play; that’s probably the biggest issue standing in the way of progress in GA. It filters into everything here.