In deep red Georgia, Republicans consider raising taxes to pay for roads

ATLANTA, GA – The Georgia Legislature is dominated by tea party Republicans and answerable to a conservative electorate that is viscerally antitax. And yet as this Southern state once again suffers through an icy winter, talk here has turned to raising taxes.

Neglected bridges and roads are in urgent need of repair, and the tough winters of this year and last have only made the problem worse and amplified the need to ease congestion.

Now, with Republican Gov. Nathan Deal having been re-elected last fall to a second and final term, a motivated and diverse coalition of lawmakers and outside groups say that it's time for Republicans — who wrested control of the state from Dixiecrats over a decade ago — to govern and do something about the problem.

“There’s a perception, not always valid, that we’re the ‘just say no’ party,” said Charlie Harper, a conservative who blogs at Peach Pundit and runs a nonprofit policy group that has advocated for more transportation funding. “When you’re in the governing party, you have to fix problems.”

There is little debate in Georgia over the need to increase the state’s investment in road maintenance and new construction. The consensus is that about $1 billion in new funding is needed, in a state where the annual budget is currently about $20 billion. The only question is how to raise those funds.

In January, the Legislature responded to pressure, and House Transportation Committee Chairman Jay Roberts, a Republican from central south Georgia, introduced a bill that would reconfigure the way Georgia structures its gas tax to bring in more money. Right now, the gas tax is a mix: part sales tax — a percentage that rises and falls with gas prices — and part excise tax, which is a fixed amount per gallon of gas sold. The plan is to convert all of the gas tax to an excise tax. The bill’s detractors have slammed the bill as a tax increase, but the bill’s backers maintain that they have enough votes to pass it through the House, which is controlled by Republicans 119 to 60. The governor has also said the House bill is the right approach.

“The fact of the matter is, we need about a billion to a billion and a half dollars,” said Ed Lindsey, an Atlanta attorney who was House majority whip until last year, when he resigned his seat to serve as a citizen appointee to atransportation study committee created by the legislature last year to develop recommendations. “You look under your couches and scrape together your coins, but this is a necessity for us.

“Republicans as a general principle are opposed to new taxes. I think that’s a good philosophy to have. But this is the kind of infrastructure need that cannot be ignored, and you just got to bite the bullet,” he said.

On Wednesday, Roberts’ bill was trimmed in a bid to appease antitax sentiments while preserving the bill. The excise tax was cut from 29.2 cents a gallon to 24 cents a gallon, and one political insider told Yahoo News that there is talk in the Senate of cutting it down to 22 cents a gallon. Instead of raising $1 billion, the revenue total from 24 cents a gallon would be about $757 million, according to the Atlanta Journal-Constitution.

The House is expected to vote on this version of the bill on Thursday.

The transportation issue has dominated Georgia’s political conversation since the beginning of the year. Even though Deal did not talk much about it as he ran for re-election last year, he has shifted his attention to it since — and away from ethics reforms he promised, which have been postponed for a year.

Deal called it “unacceptable” for the state to not find new revenue for roads and rail projects. And he mentioned the issue prominently in his state of the state address in January. But he has generally let the Legislature lead the way on the issue.

“This governor has traditionally led from the front. I’ve always respected that about this governor. I would certainly hope that by the end of the general assembly that he’s leading from the front again,” Lindsey said. “Time and time again he’s been willing to lead from the front on difficult issues, and this is another one on which his leadership is desperately needed.”

Deal’s approach so far — making general statements about the need for action on transportation and letting the Legislature fill in the details — has been strategic, observers say, because he knows there is a lot of behind-the-scenes work needed to convince conservative lawmakers of the need for action. “This is a guy who knows how to work the general assembly,” Lindsey said.

Harper, whose blog is a must-read for political insiders in Georgia, started advocacy group PolicyBEST at the beginning of 2014 out of frustration with the prevailing political culture in Atlanta, which he felt too closely mirrored that of the nation’s capital: too much gridlock, too little getting done. “I’ve grown tired of watching campaign season after campaign season where primaries are decided on consultant-driven wedge issues, with real solutions on issues of education, science and medicine, and transportation go virtually ignored or given meaningless platitudes,” Harper said.

The state of the state’s transportation infrastructure, Harper argues, should be a nonpartisan issue because its decline hurts Georgia economically. That belief has led him to spearhead a behind-the-scenes education effort inside the Legislature, while also assembling a coalition of groups that spans the political spectrum from tea party conservatives to Sierra Club liberals to press for more transportation funding.

Still, the idea of a gas tax increase, after encountering little turbulence during a quiet first few weeks of session, has become hotly debated and criticized. One Republican co-sponsor withdrew his name from the bill because it did not offset the increase in the gas tax with a reduced tax burden somewhere else in government spending.

Grover Norquist’s Washington-based group, Americans for Tax Reform, has come out in opposition, estimating that one version of the bill would have raised the gas tax in the Peach State, including the federal tax of 18.4 cents a gallon, from 45.4 cents a gallon to as much as 53.6 cents per gallon. That prompted a public spat between House Speaker David Ralston and Norquist. Harper and Norquist also went back and forth on Twitter, ending with Harper taking a shot at Norquist for his association with disgraced lobbyist Jack Abramoff.

Prominent conservative pundit Erick Erickson — who lives in Georgia — slammed the bill. The current legislation, Erickson wrote, would divert all gas tax revenue that used to go to counties to the state, forcing counties to raise their own gas tax in reaction and creating a cascade of consumer tax increases.

“They’ll pass it knowing it will force massive new taxes, but claim they did not vote for a tax increase,” Erickson wrote.

The House has tweaked its bill to allow local governments to receive some of the gas tax revenue, though the reformers insist that all local tax revenues will have to be spent on transportation alone, a discipline that has not been adhered to for years. Erickson — who supports spending more on transportation and supports changing the gas tax from a sales tax to an excise tax — has continued to criticize the bill, but he indicated that the fate of another bill working its way through the Legislature — the Religious Freedom Restoration Act (RFRA) — may dictate how loudly he opposes the transportation effort.

“A lot of conservatives, myself included, are far more worried about RFRA than transportation and have been more focused on that issue,” Erickson said in an email. “But given the Chamber of Commerce’s full throated opposition to [RFRA], a lot of us have decided we need to be more vocal against transportation, which is the Chamber of Commerce’s top project.”

But lawmakers like state Sen. Brandon Beach, a Republican, say the state has to act. Beach represents the 21st District, which includes both North Fulton County and Cherokee County, in the northern suburbs of Metro Atlanta. North Fulton includes a MARTA line and is full of middle- and lower-class workers who now heavily populate Metro Atlanta’s transit-poor suburbs and lack meaningful access to many jobs as a result. Cherokee is more dominated by tea party voters. Beach has to balance both constituencies, but he said that “we have to look at the gas tax.”

“It hasn’t been increased since the 1980s,” Beach told Yahoo News. “I had my insurance agent come up to me in church and he said, ‘I don’t want you raising that gas tax.’”

“I said, ‘I’ll make you a deal. I’ll vote not to raise the gas tax if you promise not to raise my insurance premium. Ever.’ He said, ‘Oh, we can’t do that. We’ve got costs.’”

Most people, when they talk about Georgia’s transportation challenges, discuss Atlanta and traffic. Much has been made — since last year’s ice storm that shut down the sprawling Metro region — of how Atlanta is being paralyzed by traffic that is stifling its ability to attract new business and out-of-state students and job talent, as well as making it hard for poor and working-class people to get around and seek new opportunities. Harper said that Georgia’s more fundamental problem is a lack of funding for keeping its existing roads and bridges in working order.

“Most [people] have no idea that we’ve been trying to expand our system to meet the needs of one of the fastest growing states in the country while deferring road and bridge maintenance, and facing a declining revenue curve from the current gas tax,” Harper said.

Even in Iowa, where there is far less growth, the Legislature has passed a 10-cent increase in the gas tax, which was signed into law last month by Republican Gov. Terry Branstad.

Deal focused his attention on this problem — not traffic congestion — in his state of the state speech.

“We are currently operating at a [funding] rate that requires over 50 years to resurface every state road in Georgia. So, if your road is paved when you graduate high school, by the time it is paved again you will be eligible for Social Security,” Deal said in the speech. He said that it might require more than $1 billion a year just for maintenance of current roadways.

And Deal did mention the state’s gas tax, noting that it has “remained the same since 1971,” while during that 44-year period “fuel efficiency for the average vehicle has almost doubled, which means the amount of excise tax collected for each mile driven has roughly been cut in half.” Recent federal standards will double miles per gallon in the next decade, the governor added.

“At the same time, we now have millions more people traveling on our roads,” he said.

If no new revenue is found, Deal said, “new capital projects will have to wait as we tend to our existing transportation network.”

Besides changes to the gas tax, other possible sources of new revenue include eliminating tax loopholes for corporations and big businesses and increasing the cigarette tax, though Deal has signaled that he does not favor the latter.

As they have tried to win over the most antitax conservatives, some Georgia Republicans are resorting to an anti-federal government message. In his state of the state speech, the governor set up reliance on the federal government for transportation funding as a greater evil than the state increasing its own taxes. Others have made the same case.

“We are much too dependent in Georgia on the federal government and that gas tax program,” said Georgia’s former Department of Transportation commissioner, Keith Golden, in remarks to lawmakers.

More than half of Georgia’s transportation budget, about 54 percent, was paid for with federal dollars in 2014, according to Politifact. And the state's share of the money coming from the U.S. Highway Trust Fund declined from 2008 to 2013 by around 12 percent.

There is debate at the national level over raising the national gas tax from its current levels of 18.3 cents a gallon on gasoline and 24.4 cents a gallon on diesel fuel. Georgia Republicans don’t want that, but they have tried to convince their most conservative supporters that someone is going to raise taxes to pay for a growing population and expanding road system, and it should be them rather than the feds.

After the excise tax in the bill was knocked down by several cents on Wednesday, Harper told Yahoo News that even though the revenue increase under such a plan would be less than what the state needs to pay for its infrastructure, “it is a good start toward letting Georgians know that the taxes they pay will be tied to a certain and specific use.”

“The plan maintains intact the concept that money taxed on motor fuels will go to pay for transportation. The plan ends the practice of the state diverting almost $200 [million] from motor fuel taxes into the state's general fund. It establishes the principle that local gas taxes will be used for transportation purposes going forward,” Harper wrote in an email.

As for the prospect that Georgia will likely fall short of the $1 billion set by key legislators and the governor as a revenue target?

“Eventually all plans have to live in the realm of what's possible,” Harper wrote.