Newspaper Page Text
PAGE 10A
Opinion
Dump fed road fund
and empower states
By Benita M. Dodd
For the Forsyth County News
With traffic congestion a
growing quality-of-life and eco¬
nomic challenge in a fast-grow¬
ing Georgia, it is no surprise
that one solution routinely pro¬
posed is a hike in the state gas
tax. At 7.5 cents per gallon, it’s
the lowest in the nation.
The state Department of
Transportation estimates that
meeting Georgia's forecasted
travel demand through 2025
will cost $66 billion to $77 bil¬
lion, but the DOT is only certain
of $36 billion in funding, leav¬
ing a gap of at least $30 billion.
State motor fuel tax revenues
are projected to raise $13 billion
through 2025.
At the same time as Georgia
and other states explore their
options, the federal government
is signaling them not to rely on
federal funding. Federal and
state governments are facing
serious budget deficits and "a
demographic tidal wave where
mandatory spending for Social
Security and Medicare will
command a greater share of the
nation's resources, overwhelm¬
ing the funding available for
discretionary programs such as
transportation,” the General
Accounting Office warns.
State legislators took a
promising step toward shrinking
Georgia's transportation funding
gap by passing the Public
Private Infrastructure Act in
2003, which allows public-pri¬
vate partnerships for infrastruc¬
ture financing, design, construc¬
tion and operation.
To further close the funding
gap for Georgia, however,
requires an even more coura¬
geous step: eliminating the feds
from the transportation funding
equation. Georgia is among 25
"donor" states that get back less
than 100 percent of the federal
gas tax dollars they send to
Washington. The federal tax on
gas is the main source of funding
for the Federal Highway Trust
Fund, established in 1956 to
build the interstate highway sys¬
tem. Gas is taxed at 18.4 cents a
gallon and diesel at 24.4 cents a
gallon, and 2.86 cents of the tax
on each gallon are allocated to
the "Mass Transit Account."
The Transportation Equity
Act (TEA-21) of 1998 guaran¬
teed each state a return equal to
at least 90.5 percent of its con¬
tribution, but not on all pro¬
grams. When all programs are
considered for fiscal 1998-2003,
Georgia got back 85 cents on
the dollar. The state fared even
worse in the Mass Transit
Account, getting back just 67
cents on the dollar.
Now that the interstate sys¬
tem is largely completed, states
have little need of a federal
funding intermediary. The fund¬
ing process has devolved into a
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FORSYTH COUNTY NEWS —
political popularity contest in
Congress, which controls allo¬
cations and has the ability to
divert highway funds to the
General Fund, allocate to pow¬
erful lawmakers and withhold to
enforce agency regulations.
With federal funds meeting up
to 90 percent of the cost of proj¬
ects they support, the potential
for abuse and misuse clearly is
high, producing inefficient and
unfair allocations. Lawmakers
produce inflated requests to take
home funds for expensive,
ambitious projects with little rel¬
evance to consumer demand.
As the U.S. House debated
its $275 billion, pork-laden sur¬
face transportation reauthoriza¬
tion bill this month, U.S. Rep.
Johnny Isakson (R-Ga.) pro¬
posed an amendment to relieve
the equity imbalance among
states. Isakson, a member of the
House Transportation and
Infrastructure Committee, wants
the congressionally earmarked
so-called high-priority projects
and projects of regional and
national significance to apply to
a state’s total funding level, and
he wants to guarantee states a
95 percent return on their contri¬
bution. Five percent of the total
should be more than adequate to
handle the funding shortfall for
"recipient" states’ reasonable
projects.
The amendment was defeat¬
ed 254-170, resisted by recipi¬
ent states and lawmakers pro¬
tecting $11 billion in 3,000 pet
projects. The House bill increas¬
es projects from 7 percent of
funds to nearly 16 percent, and
would put Georgia’s rate of
return at a dismal 76 cents on
the dollar. The House and
Senate versions of the bill are
being reconciled in conference
committee; the president has
threatened to veto anything over
$256 billion.
While Georgia’s lawmakers
and policy-makers should, of
course, acknowledge the need to
help support reasonable projects
in less populated states, they
must also highlight and vocally
protest the federal role in state
congestion: an unfair, deteriorat¬
ing rate of return to Georgia’s
taxpaying motorists that hinders
solutions to our growing trans¬
portation needs.
More than that, state and
local transportation issues are
best resolved and prioritized
close to home. The goal should
be to abolish the Federal
Highway Trust Fund altogether
and give highway financing
authority to the states, which
can then work independently or
regionally to customize conges¬
tion solutions with flexibility
and prioritize them realistically
according to local demand, not
according to pork.
Benita M. Dodd is vice
president of the Georgia
Public Policy Foundation.
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State economic disaster?
Georgia faces tough eco¬
nomic times in the immediate
future. Too bad some of our
elected leaders and even our
top commercial execs are too
busy studying other matters
(indigent defense, gay wed¬
dings, futuristic streetcars,
etc.) to warn us — or to help
construct safety nets to break
our fall when one or both of
the following economic catas¬
trophes strike.
— Closing major military
installations. Suppose Robins
Air Base is shut down in the
coming round of government
base closings. The loss would
be devastating to Middle
Georgia, which is already
struggling economically as
existing industries move away.
Chamber of Commerce
sources say that closing
Robins is unlikely; the base is
too valuable. Washington
sources say otherwise.
Georgia has lost much of its
influence in high government
circles, and Robins’ less-than
favorable comparison to simi¬
lar installations makes it ripe
for the shut-down list.
— The possible demise or
even drastic downsizing of
Delta Air Lines. The death or
near-death of Delta would
shatter Hartsfield-Jacksor,
Airport and create an econom¬
ic earthquake that would rip¬
ple in every corner of the
state.
"Delta is going through
some tough times, but it will
be OK," some business lead¬
ers tell us. "And Hartsfield is
growing by leaps and bounds.
Just look at that new $1.3 bil¬
lion fifth runway and all the
traffic it will be able to han¬
dle.
Dream on.
Not one of our supposedly
Bill k
Shipp
COLUMNIST
all-knowing leaders dares list
publicly the collapse of Delta
as a shattering possibility that
would drive a stake into the
heart of Atlanta’s economy. A
barely used fifth runway could
become a billion-dollar
reminder of what might have
been.
If you believe Delta’s
downfall can’t happen, think
back. Remember Eastern
Airlines? Everyone said EAL
would be OK when problems
surfaced in the late 1970s.
Delta’s present condition is
eerily similar: mismanage¬
ment from the top combined
with a single-minded union
determined to play chicken
with the airline’s existence.
Reading some old headlines,
you could replace "Eastern”
with "Delta" and think you
were scanning today's news.
Georgians, especially
metro Atlanta residents, take
for granted Delta’s nearly
1,000 nonstop flights launched
from Atlanta each day to every
market in the country. We
don’t stop to think that Delta's
use of Atlanta as a hub creates
two-thirds of that Atlanta traf¬
fic. Hartsfield-Jackson’s hustle
and bustle are not generated
by a huge local demand for air
passenger service.
Atlanta’s availability of air
transport to any place at any
time has been marketed skill¬
fully for years. To this day,
convenient air travel is most
often mentioned as a reason
for a company’s decision to
relocate to the Atlanta region.
Our continuing economic
progress, not only as a city but
as a state, owes much of its
economic progress to the
aging Atlanta hub.
However, airline trans¬
portation realities changed
dramatically with deregulation
and accelerated with the suc¬
cess of Southwest, Air Tran
and other point-to-point carri¬
ers. These airlines are taking
advantage of new, efficient
aircraft that c,an operate eco¬
nomically with smaller pas¬
senger loads between two
points without depending on
hubs. More importantly, the
smaller carriers’ costs are
lower.
The point-to-point airlines
can sell tickets for less than
what it costs a hub carrier to
fly the same customer.
(Indeed, Delta’s per-seat mile
costs are the highest in the air¬
line industry.) As a result,
almost all major hub-and
spoke carriers either have
gone into Chapter 11 bank¬
ruptcy or are approaching it.
Delta’s long-term pros¬
pects for avoiding bankruptcy
reorganization are not encour¬
aging. In the early 1990s Delta
departed from its longstanding
tradition of promoting in
house employees to the execu¬
tive suite. Instead, Delta
recruited high-priced execu¬
tives from out of town, with
disastrous results.
These hired guns were
dumb enough to think they
could pay themselves lavish
salaries, bonuses and perks
while asking the average
employee to make financial
sacrifices. The suits are now
reaping the whirlwind as they
ask ALPA, the airline pilots’
union, to take pay cuts to keep
the company solvent. On
paper, that does not seem
unreasonable. The average
mid-career Delta pilot makes
more than $200,000 a year for
working less than 40 hours a
week, although their responsi¬
bilities are enormous.
At this writing, however,
Delta’s pilots appear willing to
take the airline down with
them rather than agree to cuts
that might save their jobs and
the company. One would think
the Delta guys would talk with
their former Eastern brethren.
For those of us not directly
involved in Delta’s inside
baseball problems, the,eco¬
nomic future of our region is
what really matters. The pros¬
perity created by Hartsfield
airport and its big airline
clients has lifted more
Georgians out of poverty than
all the combined governmen¬
tal programs in the state’s his¬
tory.
Trace Atlanta’s develop¬
ment. At all stages, you will
find one constant: We are a
transportation center. We have
built a brave and beautiful
capital city around this
bedrock strength, a foundation
block that is now at risk. No
responsible public official
seems to understand or dare
move to preserve the most
essential element in metro
Atlanta’s economic vitality.
If the Hartsfield hub falls
flat and/or Robins AFB goes
away, Georgia’s once high¬
flying economy will be lan¬
guishing on the tarmac — and
the draft to get it airborne
again will be a long time in
coming.
Bill Shipp’s column
appears each Sunday and
Wednesday. His e-mail
address is bshipp@bell
south.net.