It is critically important as a state that we move forward from the TSPLOST debate. I had good friends who I trust and respect on both sides of the debate. No one should be vilified for their position because as we said in our study, there were good reasons to be opposed to the plan and good reasons to be in favor of the plan. We should learn from our mistakes and move forward. What we want to present today is a framework for moving forward. It is not a full plan, but specific ideas where we believe a broad consensus can be developed. Many of these ideas are not new. We want to build on the good work that has already been done over the years – including the TIA.

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It is very evident that we must build trust. We believe we need to build trust though Transparency, Reform and Performance. One simple way to increase transparency is to broadcast the GDOT board meetings on the Internet, just as many other state board meetings are made available to the public. We need reform. We’ve heard many ideas and we’re not sure which are the best. One common complaint is we need to do something about the “alphabet soup of agencies.” We believe there is an opportunity to simplify governance by consolidating some of these agencies. The gas tax is a short-term solution – not just for us but for every state and for the nation. We have 5-10 years before we have to make some fundamental decisions about how to fund transportation. That window gives us an opportunity to build trust through performance. Actions speak louder than words. The GDOT was #1 and #2 in the nation last year in bringing projects in 1) on time and 2) on or under budget. That’s the kind of performance we need to continue.

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For the 1996 Olympics we built a state-of-the-art Intelligent Transportation System (ITS). We have continued to build on that foundation, winning many awards. An ITS is good for users of the road network as well as the transit network. Getting real-time road information to commuters enables them to delay or reroute their trip. (Over 50% of the congestion in metro Atlanta is caused by non-recurring incidents.) Intelligent traffic intersections can synchronize signals and dynamically react to accidents and other traffic events. We should focus this effort on our critical arterial roads – Roswell Road is a good example of success. Finally, think of large, dense cities with successful transit systems – Tokyo, London, NYC, Washington, D.C. – what do they have lots of? Taxis. The last mile is critical to transit. In low-density Atlanta it doesn’t make economic sense for taxis to drive around waiting for fares, but technology can help. Most of us carry smart phones. Imagine exiting the transit station and your phone tells you: You are one mile from your final destination. It is approximately 15 minutes on foot / a free shuttle bus will arrive at your location in 5 minutes (you can track the shuttle on your phone because it has GPS) / a ZipCar rental area is one block away – there is one car available – click here to reserve the car – the cost is $10 per hour / there are 3 taxis within two miles – the estimated fare is $4 – click here to hail a taxi and track it to your location. Such “apps” would attract many more people to transit; people hate uncertain wait times and the threat of being stranded if they leave their car at home. We have a technology industry and research universities that can create the premier ITS in the world. Who knows what will happen in 10 years? Google already is testing automated, “autonomous” vehicles in traffic. We can be ahead of the game.

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If your car breaks down and you can’t get to work, you don’t have a work problem. You have a transportation problem. Transit can play an important role in economic opportunity – getting people to work and education – as well providing mobility to the disabled or elderly. And yes, if done correctly, it can reduce traffic congestion. In addition to focusing on the goals above, transit must be: Efficient – low capital and operating costs Effective – meet customers’ travel needs and attract many riders Affordable – as cost-effective as possible for both customers and taxpayers

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In addition to having very low density, Atlanta’s commuters are not primarily traveling to one central destination, but often from one suburb to another. This makes a rail-based network unaffordable. We find it very frustrating that the Georgia Public Policy Foundation is often referred to as “anti-transit.” We are not anti-transit, we are “anti” wasting money. We believe a rail focus is a lose-lose scenario. Those not politically connected are unable to get rail lines in their neighborhood. The cost prevents the creation of a true interconnected network that fits our commuting patterns. Plus it hurts low-income residents: We’ve seen in many cities that the bus routes the poor depend on are eliminated in order to shore up the operating costs of expensive heavy and light rail lines. So if not rail, what do we do? Rubber-tired transit.

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Some say buses have a stigma. But experiences with the commuter buses run by GRTA – the Xpress buses – show that if you provide a good customer experience they are popular. Xpress offers a premium experience with comfortable coaches, friendly operators, responsive customer service and stations with light rail-like amenities.

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But even better is Bus Rapid Transit.

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BRT looks and feels like a light-rail vehicle, but it has rubber tires. It can use the HOV, HOT or managed lanes on the interstates to escape traffic and dedicated lanes on arterial routes or virtual dedicated lanes (controlled by an ITS) that offer very competitive trip times. Because this offers a high quality experience at a much lower cost than rail, we can afford to build out a true network.

The stations are much nicer than just offering a bench and a partial shelter.

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They can be built on a small footprint.

And connected to the ITS so every vehicle is tracked and you know exactly when the next vehicle will arrive. This is a station in Rio, a much denser city (pop. 6.3 million) than Atlanta, where the mayor has realized that BRT is far more superior than rail. (See video starting at 4:00 minute mark: http://www.ted.com/talks/eduardo_paes_the_4_commandments_of_cities.html)

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This is an old map. Don’t focus on the details, but focus on what a true network would look like. Note the yellow lines that represent BRT on major arterial routes, especially between suburbs. An expanded Xpress bus network (red lines) reaches to the edges of the region. We envision opportunities for private providers such as Megabus or Groome Transportation shuttles to provide high quality connections between our major cities.

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We propose that the state allocate $65 million per year to transit. This would come from the 4th penny on motor fuels, which we will talk about later. This includes matching grants for every existing transit system in the state. (Many people don’t realize we have fairly extensive rural transit and para-transit services.) We propose funds for expansion of the successful Xpress service, which is directly relieving traffic congestion on our interstate highways. We propose support of MARTA because of its critical importance. And we propose building out high-capacity BRT service on the HOV, HOT and managed lanes and major arterials. This, we believe, is a solid first step on transit. Obviously, with a very tight state budget, this will need to be phased in over time.

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For roads and bridges, there are several quick fixes that should be addressed immediately to maximize the capacity of existing infrastructure. Synchronizing lights (Atlanta has some of the worst signalized arterials of any major metro area in the U.S. so this needs to be a priority. GDOT should have the responsibility for setting and maintaining traffic signals on all state roads, including in local counties or cities.), adding shoulder bus lanes to highways without HOV/HOT lanes, expanding programs to clear accidents or incidents more quickly, and enhancing major arterials by adding median turn lanes or turn restrictions, adding raised medians and adding acceleration and deceleration lanes. However, we need more than quick fixes. We should start with the regional TSPLOST lists. It is our belief that in every region, roughly the top third of projects were not controversial and would have had broad support. Who thinks addressing the GA 400 / I-285 interchange is a bad idea? We must prioritize projects based on which will have the greatest impact on traffic congestion. Good places to start are interchange projects like GA 400/I-285 that address critical bottlenecks and the Northwest Corridor project that will provide congestion insurance through the addition of managed lanes. We would add a project of statewide significance that takes advantage of the fact that building capacity outside Atlanta and diverting unnecessary through traffic is much less expensive than adding capacity in metro Atlanta – the Statewide Freight Network.

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US 27 runs along the western border of Georgia, from Chattanooga through Columbus through Bainbridge to Tallahassee. With the project that GDOT announced last week, almost the entire length of US 27 will be four-laned. (http://www.dot.state.ga.us/informationcenter/programs/roadimprovement/GRIP/Documents/Facts/US27FactSheet.pdf) Both the Georgia Public Policy Foundation (mms://mediam1.gpb.org/GPB-TV/2009/GPPF-1.9.09.wmv) and a study by McKinsey and Co. have proposed creating a bypass around Atlanta by connecting US 27 to the Macon area. (McKinsey and Co. study – see page nine, http://www.it3.ga.gov/Documents/Meeting-Georgias-Mobility-Challenges.pdf)

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The Fall Line Freeway is 80% complete and connects Columbus, Macon and Augusta. (See Fall Line Freeway fact sheet at http://www.dot.state.ga.us/informationcenter/programs/roadimprovement/GRIP/Documents/Facts/FallLineFreewayFactSheet.pdf. )

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This could divert from 30-60% of the truck traffic out of metro Atlanta, removing the equivalent of up to 100,000 cars per day from the metro interstates. (See McKinsey and Company study, page 11, http://www.it3.ga.gov/Documents/Meeting-Georgias-Mobility-Challenges.pdf.) This move could create growth in a part of the state that has plenty of room for growth. It could enhance tourism as families heading to Florida choose to take an alternate route. Not only is Macon a rail hub, but the Macon airport could handle air cargo, which would free up air space at Hartsfield Jackson. This would enhance the inland port in Cordele as well as the competitiveness of our ports in Brunswick and Savannah. Shippers care about getting their products to market quickly; if trucks continue to get stuck in Atlanta traffic, shippers will be incentivized to move their business to other ports.

So what would a prioritized list of projects look like? This is a sample; clearly not a final list because it is not balanced in terms of population. We asked those who worked on the TSPLOST effort to give us the projects in each region that they felt had broad-based support. We have also included the Statewide Freight Network. This totals $2.8 billion of new projects. But can we pay for it?

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We first questioned whether Georgia was under-investing in infrastructure.The latest Census data show our state and local per capita infrastructure spending as the 22nd highest in the nation. That is particularly high, considering Georgia typically ranks very low in most spending categories. What we found is that infrastructure spending is not very balanced, with K-12 spending on bricks and mortar ranking in the top 10 in the nation, while transportation investment (roads, bridges and transit) ranks in the bottom 10.

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Georgia did invest significantly in transportation through the 1960s, ‘70s and ‘80s, but then we stopped. Our latest transportation plan describes this as “coasting on our past success.” (See Statewide Strategic Transportation Plan: 2010-2030, Page 5, http://www.it3.ga.gov/Documents/Final-SSTP.pdf.)

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Are we taxing enough? The American Petroleum Institute produces an apples-to-apples comparison of motor fuel taxes in terms of cents per gallon (http://www.api.org/oil-and-natural-gas-overview/industry-economics/fuel-taxes.aspx). The blue area represents excise taxes. Georgia has one of the lowest excise taxes, 7.5 cents, in the nation. The red area represents sales taxes. This portion is very volatile, going up and down with the price of gas. As you can see, Georgia ranks 18th highest now, but ranked 49th as recently as 2009.

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But this graph is very misleading because it counts motor fuel taxes collected, not how much of the tax is dedicated to transportation funding. In Georgia, the state sales tax rate is 4% and the local sales tax rate is typically another 2% - 3%. However, less than half of these sales tax revenues are dedicated to transportation. One penny of the state sales tax levied on motor fuel disappears into the general budget and all of the local sales taxes on motor fuel disappear into local general fund spending. If you consider only the gas taxes that are allocated to transportation, Georgia ranks 47th ... even with gas prices at historically high levels.

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We believe the best policy on transportation funding is not to put all your eggs in one basket, so we have identified several sources of revenue. The TSPLOST passed in three regions and will provide nearly $2 billion of revenue over 10 years. Second, we believe all new capacity should be funded by tolls, where possible. The Northwest Corridor project is a good example. This is a potentially large source of funding from a user fee, where those who pay benefit directly and everyone voluntarily chooses whether or not to pay. Using tolls for congestion pricing also creates routes that are congestion-free even during rush hour, which helps commuters and transit riders at the same time.

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The 4th “penny” (percentage point) in gas taxes is a user fee that is being charged to drivers but is being misdirected to other uses. This will have to be done over time to minimize the impact on the general fund budget, but it will provide flexible dollars for both transit and road projects.

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This chart shows retail gas prices going back to 1990. On the right axis is the 3% sales tax on motor fuel converted to cents per gallon. At $4.00 per gallon, the 3% sales tax yields 12 cents per gallon. At $3.00 per gallon, it declines to 9 cents. Every one cent tax yields about $60 million in revenue.

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If the price of gas were to drop by a dollar, that would reduce the amount of money available to invest in transportation by approximately $180 million. One option would be to lock in the current rate.

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Converting the 3% sales tax to a flat excise tax would be a calculated risk. If gas prices continue to rise, revenue from the 4th “penny” (percentage point) of sales tax would go up, but the revenue from the excise tax would not. However, if gas prices stay flat or decline, we would be able to rely on a predictable revenue stream. (This addresses gas price volatility, but does not address the long-term decline in gas tax revenues due to increased fuel efficiency and alternative fuel vehicles. This will require a much more comprehensive solution in the next 5-10 years.)

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The last option is to allow counties to voluntarily choose to replace their ESPLOST with a fractional sales tax. The tax could be as much as 1 percentage point or any fraction. It may be used for K-12 capital spending (just as the ESPLOST) and/or transportation spending. This would provide local governments with a way to rebalance their infrastructure spending. In addition, two or more counties could join together to fund a specific project. This solves a problem with the TSPLOST. In some respects the TSPLOST regions were too small to encompass statewide projects like the Statewide Freight Network. But they were also too large in some respects, with urban counties being matched with suburban counties that did not share similar interests. This would allow cooperation on a sub-regional level.

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This framework outlines several new sources of revenue to supplement existing gas taxes, TSPLOST and toll revenues. This doesn’t mean other options are off the table, such as diverting general sales tax revenues to transportation projects or funding general obligation bonds for transportation projects with general budget funds. This includes funding for a first-class Intelligent Transportation System, state investment in transit and $2.8 billion in new investment.

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Questions?

kmccutchen@georgiapolicy.org Georgia Public Policy Foundation

3200 Cobb Galleria Parkway Suite 214

Atlanta GA 30339 404-256-4050

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