ATLANTA - Georgia legislators passed a bill during their last session, which ended in March, that allows the state to issue grant anticipation revenue vehicles, and the move could lead to roughly $2.4 billion in Garvees being issued to speed up the completion of road projects throughout the state.
Debate among state transportation officials continues on whether to spend the funds on rural roads or build highways to ease traffic congestion in the metropolitan Atlanta area; officials say they have not determined which projects will be the funded first with the bonds or when they will be funded.
Tom Turner, the director of pre-construction for the Georgia Department of Transportation, said details about completing the rural road program are scarce partly because the state is exercising caution as this marks the first time the state has issued Garvees, which would be secured by federal transportation grants made to the state amounting to about $930 million a year.
Gov. Roy Barnes announced his Garvee proposal to Georgia lawmakers in January, saying Garvees would offer the best solution to speeding up projects in the rural areas of the state, as well as Atlanta. Georgia's current 20-year transportation plan could take 17 to 22 more years to complete at the current pace using only pay-as-you-go financing. However, by using Garvees, the expected time of completion could be shortened to as few as seven years. The rural projects are estimated to cost $2.4 billion.
Turner said before projects are finalized, changes to the authority that will issue the Garvees must be made. The new law calls for the name of the state's toll authority to be changed to the State Road and Tollway Authority and for the board to be expanded to include representatives of the lieutenant governor and the speaker of the House. These changes are needed because Georgia law does not allow the Department of Transportation to issue revenue bonds. Turner noted that those additional members aren't in place yet.
One of the projects, called the Northern Arc, would help the metro Atlanta area rather than rural areas; it currently appears to be on hold. The project would entail the construction of several four-lane highways, connecting some of the state's northern counties to the Atlanta area.
Barnes has supported the proposal that would ease traffic congestion in the metro area, but the plan has faced criticism from environmentalists who say building such highways in the northern counties of the metro area would only increase the traffic and smog problems that now plague greater Atlanta.
Other opponents argue funding should be directed toward rural areas that have been ignored in deference to fueling the Atlanta economy.
Jocelyn Butler, a spokesperson for Barnes, said the governor can make recommendations as to what projects should be undertaken first, but the Department of Transportation will make the final determination. Turner said the DOT is in the process of reviewing projects, and a list should be ready within the next two weeks.
In the meantime, the state's finance and investment commission has issued a request for proposals for financial adviser in preparation for the first sale, which could be this summer, said Weyman Smith, the commission's director. He said $200 million to $300 million in Garvees could be sold in June, most likely coming through a negotiated sale.
Roughly $400 million of Garvees could be issued each year as they are needed, said Viki Gavalas, the director of communications for the DOT.
Smith said officials are confident the state's triple-A rating would not be hurt by the additional debt. The state has roughly $5.5 billion of outstanding general obligation debt.
