This Act Is a Big Deal

The Georgia Transportation Investment Act of 2010, signed into law by Gov. Sonny Perdue last week, seeks to make the biggest investment in state transportation infrastructure in the last 50 years.

It could raise up to $1.35 billion starting in 2012, according to an estimate by Georgia State University.

The law establishes 12 special tax zones that correspond with the boundaries of existing regional commissions across the state. Elected officials from different counties will zero in on a list of projects.

In a referendum in 2012, voters in each zone will decide if a 1% sales tax should be levied in the zone for a period of 10 years to fund projects.

It is yet to be decided if state leaders will decide to issue debt against anticipated revenue from the tax or whether they would fund projects with the taxes as they come in, a spokesperson at the governor’s office said.

Some counties in Georgia have wanted to issue debt backed by their sales tax but a dip in sales tax collections due to the recession has made them cautious.

 The special tax could reduce the pressure on the state to increase funding for transportation needs from the general fund, according to David Sjoquist, director of the Fiscal Research Center at GSU.

The new revenue is expected to be less than the cost of the projects that are in the region’s transportation plan, he said, and addressing the worst bottlenecks could use up a very large percentage.

In the 10-county metro Atlanta area it’s estimated the 10-year tax could bring in $7 billion to $8 billion. However, there are some exemptions to the tax and some estimates put the figure closer to $6 billion to $7 billion, according to Atlanta Mayor Kasim Reed’s office.

The law also provides temporary relief to MARTA, metro Atlanta’s public transit system. It suspends for three years restrictions on how the agency allocates money between capital and operational plans. But MARTA  does not get a share of taxes raised through the new Transportation Investment Act.

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