Georgia County Government - September 2008 - (Page 31)

Feature Innovative Transportation Financing in Georgia By Terri Slack Chief Operating Officer Georgia State Road and Tollway Authority By Mary Sallach Policy and Program Consultant Georgia State Road and Tollway Authority here are many challenges that government officials face when addressing various local, regional, state and federal transportation needs. In Georgia, the population has grown by more than 1 million people in the last five years and is projected to grow by more than 3 million in the next two decades. In addition, construction costs have been rising at a faster pace than inflation due to continuously rising fuel costs. Currently, the Federal Gasoline Tax was last increased in 1993 and is set at 18.4 cents per gallon, which funds the Highway Trust Fund. Under the current federal reauthorization, SAFETEA-LU, $286 billion was authorized by Congress, but the revenue sources flowing into the trust fund were not sufficient to support the program. Therefore, if no action is taken to increase revenues, federal spending will be drastically reduced. In Georgia, there are two types of motor fuel taxes. The 7.5 cents per gallon motor fuel excise tax was adopted in 1971, and the purchasing power is continuing to decline since it is not indexed for inflation. The 3 percent Sales and Use Tax for transportation purposes was added in 1979 increasing by another 1 percent in 1989, which is directed to the General Fund. Since traditional funding such as the motor fuel tax is not keeping pace with inflation and population increases, states must find new solutions for meeting transportation needs in the future. As mentioned in the Texas Transportation Institute’s 2007 Urban Mobility Report, U.S. Department of Transportation Secretary Mary Peters stated: “The daily frustration of drivers on our roadways is ample evidence that our current transportation model is broken, and that bold thinking and leadership are needed. We’re never going to solve congestion T with higher federal gas taxes or additional earmarks; instead, we need fresh approaches.” Federal Innovative Finance Initiatives include the innovative management of funds, debt financing, credit assistance and tolling initiatives. Some examples of innovative techniques that the Georgia DOT and the State Road and Tollway Authority have considered include: Advance Construction, Flexible/ Soft Match, Toll Credits, Naming Rights, State Infrastructure Banks, Managed Lanes and Public Private Partnerships. Other innovative funding mechanisms for projects or programs may include one or more of the following: Grant Anticipation Revenue Vehicles (GARVEEs), Section 129 Loans, Toll Revenue Bonds, Transportation Infrastructure Finance and Innovation Act (TIFIA) loans, and Private Activity Bonds (PABs). However, some innovative finance initiatives such as State Infrastructure Banks require legislative approval. A State Infrastructure Bank is a revolving infrastructure investment fund, much like a bank, that can be used to offer financial assistance to state, regional and local government entities to fund needed transportation projects. In April 2008, the State of Georgia reached a significant milestone when Governor Sonny Perdue’s State Transportation Infrastructure Bank (STIB) initiative was enacted through House Bill 1019. This legislation authorizes the State Road and Tollway Authority (SRTA) to operate and manage the STIB program. Through the governor’s STIB Initiative, this program has been created and funded to provide government loans for a wide variety of transportation projects to help address the growing needs of the state. It is envisioned, the STIB may provide loans to government entities for transportation projects that demonstrate financeability as well as transportation merit, engineering merit, economic merit, project feasibility and innovative concepts. The SRTA is in the process of establishing procedures to provide for the loan application process, loan review process, and operational processes of the bank. As this program is further developed, the SRTA is gathering input from stakeholders to assess the needs of the program. Once finalized, the STIB program is targeted to launch in the spring of 2009, and the SRTA encourages local governments to apply for STIB loans. For more information, please contact stibinfo@georgiatolls.com. Another innovative financing tool, called toll credits, allows states to use credits to increase the Federal share on Federal-aid projects up to 100 percent, freeing state funding for other transportation projects. This provides states with more flexibility since the state funds that are available have less restrictions on their usage. Toll credits are earned when a state, a toll authority or a private entity funds a capital highway investment with toll revenues. The Georgia Department of Transportation applied for $75.3 million in toll credits in 2005 and was approved by the Federal Highway Administration. In 2006, the governor used $52 million in toll credits to increase the funds for the Local Assistance Road Program from $48 million to $100 million, exceeding the two highest levels of funding in the history of the program. Additional toll credits could be generated in the future through projects that are toll financed. FINANCING continued on page 32 SEPTEMBER 2008 www.accg.org 31 http://www.accg.org

Table of Contents Feed for the Digital Edition of Georgia County Government - September 2008

Georgia County Government - September 2008 Contents President’s Message County Matters Cobb County: Quality of Life is Job No. 1 Innovative Transportation Financing in Georgia Drive Your Fleet into the Next Generation of Efficiency, Profits Spotlight: Georgia Technology Authority Media Productions GEMA News: Hurricane Season Could Cause Natural Gas Spike GDEcD News: Communities Receive Funds to Develop Tourism Assets Georgia’s Grand Old Courthouses: Upson County Extension News: Radon: Georgia’s Silent Danger Research Corner: Conserving Fuel Costs in Your County Staff News County Parade Index of Advertisers

Georgia County Government - September 2008

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