HB 170 is a tax increase in excess of
700 million dollars - I understand the single largest tax increase in Georgia
history. The break-even point at which there is no tax increase for consumers
at the pump is around $5.30 @gallon (unless you assume that there will be a
local tax "rollback" which would move the break-even point to around
$4.25@gallon). Those prices are pre-tax, so for the "what the customer
sees at the pump total" the break-evens are near $5.70 @gallon and
$4.63@gallon respectively.
The increase in diesel will further Georgia's competitive disadvantage with our neighboring states. Georgia will now be in the top tier of states on the list of states with the highest gas taxes. HB 170 also increases all allowable local sales taxes rates for items other than motor fuels. In addition, Section 5.1 authorizes an increase in the cap on hotel/motel taxes.
This tax increase affects Georgia's second largest industry (tourism) and was neither vetted nor explained.
Before embarking on a tax of this magnitude, actual evidence of additional need is needed. Governor Deal outlined this process in his State of the State address. Some regions passed TSPLOST ("Plan A") having identified a list of needs approved by voters. There were projects identified by the executive branch prior to the session and the needs were met without any tax increase ("Plan B"). The General Assembly needed to get to work to address whether or not there were other identifiable needs and develop an approach to satisfy those needs. ("Plan C"). The Governor explained that according to industry experts, the need is at least 100 million.....some industry experts suggest it is over 1 billion. However, no such need for an additional 1 billion dollars was demonstrated. In fact, as many House members continually and repeatedly requested documentation of actual needed projects, the narrative shifted to maintenance with no corresponding detail. My position is simple: any need was demonstrated during the FY 2016 budget process. GDOT operates with a budget of $1,003,353,791 of projected motor fuel funds, of which $891,496,632 was allocated to operations and $156,679,813 was allocated to debt service. The total funds budgeted for GDOT (exclusive of the bond package) in the FY2016 budget was $2,546,819,211, which includes federal money coming back to the state from taxes PAID by Georgians. Identifiable and documented need was met in the budget process with an additional 210 million in the bond package and an additional 55 million above the Governor's recommended budget for the DOT, which included by my calculations over 1 million dollars in DOT employee raises and approximately 27 million in total state employee raises. Transportation needs were met without even appropriating the full amount of the revenue generated by the so-called "fourth penny" and the FY16 process conclusively proves that the State of Georgia can fund transportation NEEDS by budgeting and planning.
A certain level of documentation was not forthcoming despite requests. The financial accountability problems in GDOT uncovered and reported in 2012 are well documented. In my efforts to educate myself on the issues, I learned (among other things) that the State Road and Tollway Authority (SRTA) has failed to file the annual report required by OCGA 32-10-133 for 2009, 2010, 2011, 2012 and 2013. Based upon my inquires directly with SRTA, a document was then posted to the website for 2014 which frankly raised even more questions regarding the operation and functions of the Georgia Transportation Infrastructure Bank (GTIB). I then met with SRTA officials and obtained a detailed project list. Projects such as trails and pedestrian streetscape improvements have been funded with precious transportation dollars which may even include motor fuel funds in violation of the Georgia Constitution. Prior to May 2014, the GTIB was used primarily for grants - a virtual "piggy bank" for North Metro Community Improvement Districts (CIDs) as opposed to loans to counties and cities. States with successful Infrastructure Banks (like Florida) use monies for loans so that the fund becomes self-sustaining. In fact, I understand that Florida no longer requires any appropriations from other state funds for the operation of the Florida infrastructure bank. Prior to May 2014, there was money in GTIB, so I can only assume that no pressing "need" was demonstrated at least prior to the "crisis" newly discovered and publicized beginning in the summer of 2014. I also learned that the State Auditor had failed to perform the audit of SRTA and review the GTIB records as required by OCGA 32-10-62. Let me be clear - the required State audit has NEVER been performed in any year since 2009 nor has the State Auditor directly reviewed the GTIB records for compliance with the Georgia Constitution as required by law. HB 170 does not address issues with GTIB at the same time the budget appropriates more money there. The FY2015 amended budget alone appropriated an additional 5.6 million to GTIB. I have now filed a comprehensive open records request with the Georgia DOT and am still compiling data.
Most importantly, I cannot support a "tax first" approach to problem solving. There are three ways to generate revenue for necessary projects: 1) budgeting using natural growth, 2) eliminating special interest tax breaks and credits which serve no policy purpose and 3) taxation. (As one example, the natural gas vehicle income tax credit which some voted to provide UPS and other large companies remains intact. There are many others). In FY16, there was 223 million in new income from which transportation needs could have been prioritized and funded had need been demonstrated. No one sent me to Atlanta to "tax and spend" without demanding fiscal accountability from unelected bureaucrats and therefore I was a "NO" on HB 170.
The increase in diesel will further Georgia's competitive disadvantage with our neighboring states. Georgia will now be in the top tier of states on the list of states with the highest gas taxes. HB 170 also increases all allowable local sales taxes rates for items other than motor fuels. In addition, Section 5.1 authorizes an increase in the cap on hotel/motel taxes.
This tax increase affects Georgia's second largest industry (tourism) and was neither vetted nor explained.
Before embarking on a tax of this magnitude, actual evidence of additional need is needed. Governor Deal outlined this process in his State of the State address. Some regions passed TSPLOST ("Plan A") having identified a list of needs approved by voters. There were projects identified by the executive branch prior to the session and the needs were met without any tax increase ("Plan B"). The General Assembly needed to get to work to address whether or not there were other identifiable needs and develop an approach to satisfy those needs. ("Plan C"). The Governor explained that according to industry experts, the need is at least 100 million.....some industry experts suggest it is over 1 billion. However, no such need for an additional 1 billion dollars was demonstrated. In fact, as many House members continually and repeatedly requested documentation of actual needed projects, the narrative shifted to maintenance with no corresponding detail. My position is simple: any need was demonstrated during the FY 2016 budget process. GDOT operates with a budget of $1,003,353,791 of projected motor fuel funds, of which $891,496,632 was allocated to operations and $156,679,813 was allocated to debt service. The total funds budgeted for GDOT (exclusive of the bond package) in the FY2016 budget was $2,546,819,211, which includes federal money coming back to the state from taxes PAID by Georgians. Identifiable and documented need was met in the budget process with an additional 210 million in the bond package and an additional 55 million above the Governor's recommended budget for the DOT, which included by my calculations over 1 million dollars in DOT employee raises and approximately 27 million in total state employee raises. Transportation needs were met without even appropriating the full amount of the revenue generated by the so-called "fourth penny" and the FY16 process conclusively proves that the State of Georgia can fund transportation NEEDS by budgeting and planning.
A certain level of documentation was not forthcoming despite requests. The financial accountability problems in GDOT uncovered and reported in 2012 are well documented. In my efforts to educate myself on the issues, I learned (among other things) that the State Road and Tollway Authority (SRTA) has failed to file the annual report required by OCGA 32-10-133 for 2009, 2010, 2011, 2012 and 2013. Based upon my inquires directly with SRTA, a document was then posted to the website for 2014 which frankly raised even more questions regarding the operation and functions of the Georgia Transportation Infrastructure Bank (GTIB). I then met with SRTA officials and obtained a detailed project list. Projects such as trails and pedestrian streetscape improvements have been funded with precious transportation dollars which may even include motor fuel funds in violation of the Georgia Constitution. Prior to May 2014, the GTIB was used primarily for grants - a virtual "piggy bank" for North Metro Community Improvement Districts (CIDs) as opposed to loans to counties and cities. States with successful Infrastructure Banks (like Florida) use monies for loans so that the fund becomes self-sustaining. In fact, I understand that Florida no longer requires any appropriations from other state funds for the operation of the Florida infrastructure bank. Prior to May 2014, there was money in GTIB, so I can only assume that no pressing "need" was demonstrated at least prior to the "crisis" newly discovered and publicized beginning in the summer of 2014. I also learned that the State Auditor had failed to perform the audit of SRTA and review the GTIB records as required by OCGA 32-10-62. Let me be clear - the required State audit has NEVER been performed in any year since 2009 nor has the State Auditor directly reviewed the GTIB records for compliance with the Georgia Constitution as required by law. HB 170 does not address issues with GTIB at the same time the budget appropriates more money there. The FY2015 amended budget alone appropriated an additional 5.6 million to GTIB. I have now filed a comprehensive open records request with the Georgia DOT and am still compiling data.
Most importantly, I cannot support a "tax first" approach to problem solving. There are three ways to generate revenue for necessary projects: 1) budgeting using natural growth, 2) eliminating special interest tax breaks and credits which serve no policy purpose and 3) taxation. (As one example, the natural gas vehicle income tax credit which some voted to provide UPS and other large companies remains intact. There are many others). In FY16, there was 223 million in new income from which transportation needs could have been prioritized and funded had need been demonstrated. No one sent me to Atlanta to "tax and spend" without demanding fiscal accountability from unelected bureaucrats and therefore I was a "NO" on HB 170.
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