Georgia Transportation Update: H.B. 170/106 The Transportation Funding Act of State Senator Steve Gooch (SD 51)
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1 Georgia Transportation Update: H.B. 170/106 The Transportation Fnding Act of th Sothern Legislative Conference Jly 9, 2016 State Senator Steve Gooch (SD 51)
2 Key Conditions for Transportation Fnding Reform & Investment Why were the fnds needed? How will the fnds be generated? What is the garantee that additional fnds will be sed on transportation? How will these additional fnds improve the transportation system in Georgia?
3 Why were the fnds needed? Historical Timeline of Efforts to Invest in Transportation 1990s to 2009 Transportation fnding gap was partially addressed with bond fnds backed by ftre state motor fel and federal transportation revenes effectively mortgaging transportation at the expense of ftre flexibility Joint Stdy Committee on Transportation Fnding identified the need for governance reform and a more developed statewide strategic plan as part of any effort for additional fnding S.B. 200: Transportation Governance Reform reqired the Transportation Planning Director to be appointed by the Governor and confirmed by the Hose & Senate Transportation Committees H.B. 277: Transportation Investment Act divided the state into 12 regions and athorized each region to pt forth for referendm a 1% T-SPLOST (located in middle Georgia) of 12 regions adopted a regional T-SPLOST while the other 9 (inclding Metro Atlanta) did not.
4 Why were the fnds needed? Historical Timeline of Efforts to Invest in Transportation March 2014 Georgia Hose and Senate approved the Joint Stdy Committee on Critical Transportation Infrastrctre Fnding with a report of findings de at the end of the year. Smmer/Fall 2014 Joint Stdy Committee met throghot the state and issed a final reporting identifying the varios levels of need and potential options: Ø Georgia s level of dependence of federal fnds as a percentage of its program (54%) was a significant liability. Ø $74 billion fnding gap over the next 20 year horizon based on the Statewide Strategic Transportation Plan for 2005 to Ø Additional $1 billion annally needed to maintain the existing system. Ø Additional $2 billion to $5.4 billion annally for medim to major system expansion.
5 Why were the fnds needed? Evalation of Crrent Conditions The Georgia Department of Transportation identified the areas of need and level of need annally by categories: $128M in additional fnding for pavements/resrfacing. $456M in additional fnding for bridge replacements & maintenance. $200M in additional fnding for rotine maintenance. $35M in additional fnding for traffic operations. $1.0B in additional fnding for capital needs. $60M to $500M in additional fnding for managed lanes. $221M in additional fnding for intermodal needs.
6 Why were the fnds needed? Evalation of Crrent Conditions There was an existing broad general legislative consenss abot the need for additional fnds based on crrent conditions and past efforts with diverse views on how best to address the shortfall and need. The Governor framed the dire circmstances in his 2015 State of the State Address: We are crrently operating at a rate that reqires over 50 years to resrface every state road in Georgia. If yor road is paved when yo gradate high school, by the time it is paved again yo will be eligible for Social Secrity. Members of the General Assembly had access to detailed information abot bridge conditions in their districts and other long-term needs to evalate.
7 How will the fnds be generated? Evalation of Options & Developing Consenss The Joint Stdy Committee report inclded the following recommendations: Emphasized that a minimm of $1 to $1.5 billion in new annal transportation infrastrctre fnding is needed to address the State s maintenance challenges. Identified 12 options for potential fnding inclding the following: Ø Debt service relief from the State General Fnd Ø Conversion of the sales tax to an excise tax Ø Index the motor fel tax Ø Implement 1% statewide sales tax Ø Increase excise tax Ø Annal fee for alternative fel vehicles Ø Additional options inclding tolls, transit, motor fel revene diversion, and grants to local governments
8 How will the fnds be generated? Evalation of Options & Developing Consenss There was strong consenss for simplifying the existing two-part excise (fixed at 7.5 per gallon) and sales taxes (3% for transportation and 1% to the general fnd) on motor fel. The Georgia Constittion reqired taxes on motor fel to be exclsively dedicated to roads and bridges ptting the 1% sales tax accring to the general fnd on qestionable gronds. The sales tax portion of the motor fel tax cold widely flctate with the price of gasoline placing an added tax brden on consmers when the inherent cost of gas was already going p. Consolidating both taxes into a single excise tax wold redce the tax impact of gas price spikes and ensre that all motor fel tax revenes were being sed for roads and bridges per the state Constittion. The bottom line for many members of the General Assembly was that motor fel taxes fnctioned more like ser fees becase of their dedication to transportation.
9 How will the fnds be generated? Legislative Positions & Consenss Thogh adopting different levels before conferencing, the Hose and Senate both recognized the need to simplify the crrent two-part motor fel tax and identify other related ser fees to ensre all transportation sers help spport the transportation fnd. Provisions Gasoline Excise Tax Rate (per gallon) Diesel Excise Tax Rate (per gallon) Index to CAFE (FelEfficiency) Index to Highway Constrction Costs Index to Consmer Price Index (CPI) AlternativeFelAnnalFee $200/$300 Eliminate Alt. Fel Vehicle Tax Credit Eliminate Jet Fel Exemption $5 per day vehicle rental fee $5 per nightmotel/hotel fee Heavy Trck Impact Fee $50/$100 $250Million in AnnalDebtRelief No LOST/HOST on Motor Fel SPLOST/E-SPLOST Dedication Limit for Local Motor FelSales Tax 10-Year Strategic Plan Conty T-SPLOST/TIA Reform Tax Reform Stdy Committee
10 How will the fnds be generated? Transportation Fnding Act of 2015 Timeline Jan 29th: Introdced in the Hose. Mar 2nd: Passed by Hose Transportation Committee. Mar 5th: Passed Hose (123 to 46). Mar 18th: Passed by Sbstitte by Senate Transportation Committee. Mar 20th: Passed Senate by a vote of (29 to 25). Mar 24th: Hose disagreed, Senate insisted. Mar 25th: Hose insisted, Conference Committee Appointed. Hose Conferees: Roberts, Smyre, & Hamilton Senate Conferees: Gooch, Williams, & Shafer Mar 31st: Conf. Report passed Hose (129 to 41) & Senate (42 to 12). Apr 6th: Transmitted to the Governor. May 4th: Signed by the Governor.
11 How will the fnds be generated? Transportation Fnding Act of 2015 Motor Fel Tax Consolidation & Rate Adjstment 7.5 (Previos Excise) (Previos 3% 1% & 4 th Penny ) (HB 170 Adjstment) 26.0
12 How will the fnds be generated? Transportation Fnding Act of 2015 Motor Fel Tax Revene Projections Tax levied on distribtors and NOT retailers. Net effect of H.B 170 = $32.16 per year OR (@ 12,000 miles/year & 25mpg) $2.68 per month Local sales tax capped and will NOT be assessed on the price of motor fel above $3.00 per gallon.
13 How will the fnds be generated? Transportation Fnding Act of 2015 Other Fee Revene Projections Hotel/Motel $5 Nightly Fee Heavy Vehicle Impact Annal Fee: $50 for 15,500 & 26,000 lbs and $100 for 26,000+ lbs Alternative Fel Vehicle Impact Annal Fee: $200 passenger vehicle/$300 commercial vehicle
14 What is the garantee that additional fnds will be sed on transportation? The Georgia Constittion binds all motor tax revene to roads and bridges ensring this revene as a bona fide ser fee and not general tax. The Transportation Fnding Act of 2015 reqires all other fees to be appropriated to a transportation prpose. If they are not, then they will be atomatically repealed and no longer collected.
15 How will these additional fnds improve the transportation system in Georgia?
16 How will these additional fnds improve the transportation system in Georgia? Dobling rotine maintenance investment to improve the condition and appearance of Georgia s roads by withot increasing headcont reqired an innovative delivery strategy. Contractors pre-qalify to be a part of pool of bidders by service type and can respond to any and all invitations to bid as they are issed maximizing competition and redcing contracting time. Since Febrary 2016, 90 service contracts totaling $148.5M have been awarded throgh this process enabling a dramatic increase in the rotine maintenance of Georgia s roadways from pavement preservation/concrete slab replacement to increased mowing cycles on interstates and state rotes.
17 How will these additional fnds improve the transportation system in Georgia?
18 How will these additional fnds improve the transportation system in Georgia? Additional fnds enabled the advancement of planned mobility and freight capital projects over the next 10 years.
19 How will these additional fnds improve the transportation system in Georgia? Additional fnds leveraged with innovative methods sch as Design-Bild and Design- Bild-Finance (P3) will enable the advancement of $14B major mobility capacity projects in the Metropolitan Area, Middle GA and at the Port of Savannah.
20 Qestions?
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