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Reason Foundation

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Atlanta not "Devastated" by Sales Tax Rejection

Baruch Feigenbaum
August 15, 2012, 9:19pm

Before late July’s transportation sales tax vote in Atlanta, some politicians warned Atlanta voters that rejecting the 1 percent Transportation Special Purpose Local Option Sales Tax (T-SPLOST) would lead to devastation. Atlanta mayor Kasim Reed told a national group that Atlanta would be left behind. Brookings Senior Fellow Chris Leinberger told attendees at a transportation forum that if Atlanta rejected the BeltLine it would turn into Birmingham, AL. Business leaders warned that rejecting the T-SPLOST would prolong the region’s economic hardship. 

With the tax’s defeat in 9 of the 12 regions in Georgia including Atlanta, many leaders changed their tune. The current narrative is that ambitious overhauls take time. This new messaging is much closer to the truth. Business consultants note that transportation is just one of many factors. While Atlanta traffic is congested, it is actually less congested than comparable metro areas such as Houston, Dallas and Washington D.C. In fact comparing Atlanta to Charlotte or Denver is similar to comparing apples to oranges. The Atlanta metro area has more than 5,000,000 people; the Charlotte and Denver areas each have less than 3,000,000. Education, costs of living and taxes are more important factors.

The truth is that most major transportation plans require multiple tries before they are approved. The interstate highway concept was first sketched on a piece of paper by Franklin Roosevelt during the Great Depression. Yet, it did not become law until 1956 and only because President Dwight Eisenhower was such as major supporter. The Metropolitan Atlanta Regional Transportation Authority (MARTA) plan for a 1% sales tax to fund transit required three votes before it passed in Fulton County, DeKalb County and the city of Atlanta. Many metro areas have passed transportation referendums on the second, third, or fourth try. When these initial referendums failed, area leaders made changes to improve the referendum.  

To their credit most regional leaders have worked hard to find another solution. And there are several other options. Following are three of the major challenges in solving Atlanta’s transportation problem. 

Funding: A sales tax is a problematic funding source. While it raises a large amount of money it has no relationship to transportation. Sales tax revenue varies substantially based on the economy. It is highly regressive and encourages commuters to live far from where they work. While the Atlanta region could choose another project list based on the sales tax, it may not be the best option. Gas taxes, toll-roads, value capture and other user-pay mechanisms make far better choices. These mechanisms have the added benefit of being 100% user supported.

Transit: Transit is a contentious issue in Atlanta. The T-SPLOST project list focuses heavily on three rail based lines—two of which would not move people from point A to point B. Businesses that won the rail sweepstakes—they were near a new rail line--were elated; those that lost were upset. While rail may not be dead, a better choice for the Atlanta region is bus-rapid-transit. In fact for less money than it would cost to build three rail lines, Atlanta could build a comprehensive bus-rapid-transit system. Such a system could provide transit to the entire metro area, not just a select few places. 

Regional Highway Improvements: A new plan should heavily focus on regional highways and congested interchanges. The Atlanta T-SPLOST project list made very few interchange improvements. And of the proposed improvements no more than half of the project cost was actually funded by the proposed one percent sales tax. GDOT has a managed lanes plan to encourage carpooling and transit on Atlanta expressways. Yet not a single mile of these lanes was funded by the one percent sales tax. The original plan focused a lot of resources on local highways and economic development purposes. A new regional plan should focus on regional priorities. 

Solving transportation problems is complicated. And it is unlikely that all of Atlanta’s plans will be solved immediately. However, it is welcome news that Atlanta area leaders have abandoned their sensationalist rhetoric and focused instead on future solutions. Atlanta has had phenomenal growth based on a low cost of living and great economic opportunities. Rejecting a T-SPLOST project list that relied on a questionable funding source and devoted too much funding to local road and unnecessary transit projects will not hurt Atlanta. In the long-term it will make us stronger.


Baruch Feigenbaum is Transportation Policy Analyst


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