Case Study #3: Georgia’s Winning Strategy to Upgrade Its Roads

peachtree street

If you’ve ever driven around Atlanta, Georgia, you’ve likely noticed two things: #1) Almost every street seems to be named “Peachtree,” and #2) The city has some of the worst traffic in the nation. These observations are pretty accurate. By the latest account, 71 streets are named some variant of Peachtree, and Atlanta ranks 15th in the nation for traffic with the average driving wasting 80 hours per year stuck in traffic jams.

The snarling traffic plus a long list of deferred maintenance and structurally deficient bridges led the state’s Republican leaders to approve a package of new funding for transportation upgrades and expansion. Georgia is just one of six states with both Republican governors and legislatures that have raised the gas tax so far this year. The others are Idaho, Nebraska (non-partisan yet conservative legislature), North Carolina, South Dakota, and Utah.

The package passed by the Georgia Assembly in April increased transportation funding by $1 billion using a variety of mechanisms.

  • Raised the state gas tax by about 6.7 cents per gallon to 26 cents per gallon.
  • Restructured the per gallon sales tax to an excise tax that fluctuates with inflation (Consumer Price Index) and changes in fuel efficiency.
  • Enacted three new fees dedicated to transportation:
    • $200 fee on electric vehicles
    • $5 per night hotel and motel fee
    • Weight-based fee on heavy trucks between $50 and $100
  • Retained the option for cities to enact their own gas taxes.

This new approach tackled two of the most challenging issues facing the standard gas tax methodology. First, the tax does not keep pace with inflation which means the purchasing power declines over time. Second, vehicles are becoming more fuel efficient. As cars use less gas, their drivers pay less in gas taxes. This leads to lower revenue coming in to the system. As more hybrids and electric vehicles come on to the roads, this conundrum will only get worse. Georgia’s new system hits these issues head on by making all drivers contribute to the cost of maintaining the roads.

Raising taxes is never politically easy. So how did Georgia’s conservative leaders get this legislation passed? They started with the business community. At the beginning of the legislative session, Governor Nathan Deal along with House and Senate leadership announced the plan at the Georgia Chamber of Commerce. Business and industry had long expressed concerns over the deteriorating condition of the state’s roads and highways and were willing to step out in front supporting the necessary revenue increases.

The next part of the strategy clarified the needs that existed in each legislative district. The planning director for the Georgia Department of Transportation, Jay Roberts, provided each member of the legislature with a packet detailing the structurally deficient bridges in their district. Roberts, who was a former state representative, understood the importance of explaining how transportation infrastructure directly impacted constituents in each member’s district.

This strategy proved successful. The new fees and tax increases went into effect on July 1. Atlanta will be working its way down the list of cities with the worst traffic. As for all those Peachtree streets… we out-of-state drivers better keep relying on our GPS systems when we visit.

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