BRADENTON, Fla. — Voters across Georgia head to the polls Tuesday to decide whether to raise their sales tax by 1% over the next decade to pay for transportation projects.
It is estimated that the tax would raise more than $18 billion over 10 years if approved in every region of Georgia.
Just how the tax hike will be received by voters is unknown. It has become controversial in some areas, particularly the Atlanta region.
Though the vote is statewide, there will be 12 distinct referendums in regions that match the boundaries of the state’s regional planning commissions. Special tax districts will be created for regions that pass the measure so that revenues raised in a region will be spent there.
The tax can be spent on new or existing roads, airports, bike lanes, bridges, mass transit systems, freight and passenger rail, pedestrian facilities, and ports, as well as operations and maintenance of those facilities. The revenues cannot be leveraged to sell bonds, notes, or other kinds of financings, according to state officials.
The tax has the potential to create a positive impact in the triple-A rated state, said Standard & Poor’s analyst John Sugden.
“I think to the extent that it provides additional revenue for new infrastructure, it could be a positive for the economy in the state,” he said.
A majority of tax revenue will be used to construct specific transportation projects that have already been approved in each region.
A smaller amount of the revenue — 15% in the 10-county Atlanta region and 25% in the other 11 regions — will be divided among local governments for discretionary use on any transportation project.
“The extent that local governments use these revenues for that, and provide relief for the general fund, could be a positive,” Sugden said. “I think some of these projects would not be constructed unless there’s an alternative source of revenue. I don’t see a downside.”
Various economists have said that getting voter support in this economy and anti-tax environment could be difficult. Some opponents do not support the tax because they believe transportation projects were chosen to benefit landowners or developers.
Gov. Nathan Deal and Atlanta Mayor Kasim Reed were scheduled to pitch the tax to voters in a joint press conference Monday.
Last week, Deal said that he would end tolls as soon as bonds were paid off on a state road known as Georgia 400, a limited-access expressway in and out of Atlanta.
The announcement was seen largely as an attempt to ameliorate concerns of voters who cited the toll road as an example of over-taxation and political distrust when discussing their opposition for this week’s referendum.
Former Gov. Sonny Perdue, shortly before leaving office, worked with the State Road and Tollway Authority to extend the tolls another 10 years in order to sell $40 million of privately placed bonds to finance additional work.
Before that, state officials promised the tolls would abolished once previous debt was paid off.
Deal said he would have the state pay off the bonds on Dec. 1, 2013, and remove the tolls by the end of that year.
“Georgia 400 commuters have paid more than their fair share already, and this is the earliest we can bring [the toll] down without paying a penalty for early repayment of the bonds,” Deal said. “When the Georgia 400 toll went up, the state of Georgia promised commuters that it wasn’t forever. If we don’t keep that promise, we lose the faith of the people.”
