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Transportation Sales Tax May Be a Bigger Scam than Bernie Madoff

It appears on close inspection that GDOT may have engineered a financial coup with the T-SPLOST vote.

It appears on close inspection that Georgia Department of Transportation (GDOT) may have engineered a financial coup with the T-SPLOST vote. 

Most supporters of T-SPLOST think we will get both T-SPLOST funds and
our regular state and federal tax funds for road projects. But there is a
not-very-visible term in the bill that may cost our area to lose hundreds of
millions of dollars of funds that taxpayers have paid and should be returned to
our region.

The ugly little secret is that the state (that’s GDOT) is also listed as a benefactor of the regional funds. This will be a legislative scam on a bigger scale than Bernie Madoff. This is much more than giving the people an opportunity to vote themselves a tax. This is “theft by taking.” If any elected official voted for this knowing that the regions would lose money through “redirection” of funds, they need to be held accountable for their actions.

The result of this little redirection could produce a gigantic GDOT slush fund to subsidize MARTA (500 million/year) and the other Atlanta area rail projects that are not fully funded by the “final list” that we are voting on.

After several conversations with local chamber of commerce representatives and both city council members and some state representatives it is clear that few understood how regional tax funds will be “redirected” by the GDOT to other projects both inside and outside the region.

After review of four GDOT presentations and reading their presentation on their website I thought I understood the program. However, looking at the FAQ on their website they explain in no uncertain terms how state and federal tax funds going into the region will be “redirected.”

Here are some quotes from the GDOT website under FAQ:

Why is Georgia building additional projects when we are having difficulty maintaining the current system?

…. In regions that pass the referendum, the revenues generated will supplement funding already appropriated for projects and allow Georgia DOT to redirect federal funding on maintaining our existing roadway.

Can the revenue raised from the regional sales tax be used to match federal funds? 

Yes. There are many projects in the federal-aid pipeline that are good candidates for the regional sales tax. Helping fund the required match with regional sales tax dollars will allow state and local funds to be redirected to other projects.

What happens if a project chosen for the region’s project list is already programmed with federal, state or local funding? 

If federal funds are replaced by the regional sales tax funds this will allow other projects to advance in the Statewide Transportation Improvement Program (STIP)….

The following interpretation comes from Nolan Cox of Valdosta, he says:

These quotes make it clear that regional funds will be used and state and federal funds “redirected” to other state projects. Since money is fungible, this means they will use our T-SPLOST dollars to “free up” already-committed state and federal funds to use as they wish. This can affect as much as 60 percent of the
projects.

I do not believe the mayors and county commissioners working on the Roundtable and the Executive Committee realized this. In fact, I suspect many legislators and the general public may not understand the shifting or redirection of funds.

Under GA Code 32-5-30 Congressional District Balancing our federal and state fuel tax funds are returned in equal amounts to each district over a five-year period.

Since Congressional districts and Transportation Investment Act (TIA) regions are different, the legal and most convenient way to “redirect” funds is from the TIA regions. That is why “the state” is listed as a benefactor of TIA funds on the ballot question.

If “money raised in the region stays in the region” as GDOT says, why does “the state” need to be listed as a recipient of regional tax funds? They do not, but they are.

By listing “the state” as a benefactor of regional funds, this makes it legal to “redirect” regional funds instead of federal and state funds as the FAQ explains. This means the regions lose a huge portion of the state and federal tax moneys they have paid in in fuel taxes. This makes a “bad deal” a “worse deal” for taxpayers, cities and counties. Stop the scam, vote NO on T-SPLOST.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

John Cook April 23, 2012 at 07:12 PM
You are correct. We are confused--because of the ambiguity of the new TIA legislation. But we are not uninformed. If you take the time to investigate the subject, you will discover that the budget for the DOT is restricted by GA law regarding the spending of certain funds. The TIA legislation allows these funds to be "redirected" and does not specify the appropriation of the "redirected" funds. The legislation removes funds from the Congressional District allocations and places the funds into the general account. Why? Since funds are fungible, it appears on the surface that the TIA law creates a slush fund consisting of "redirected funds." The question is whether the ambiguity in the law was deliberate, and if not, why the law is vague. The TIA legislation was re-written several times by the leadership at the GA Capitol. The lawyers who wrote the legislation are experts at getting things written the way the leadership wants things done. So, yes, the leadership has created confusion. The remaining question is "why." This year, these same leaders at the State Capitol killed legislation that would restrict the gifts that they receive from lobbyists. An informed person would ask "why" on that issue, also. There is much going on at the Capitol that the casual observer overlooks.
Chris P. April 23, 2012 at 11:29 PM
According to politifact we also have roads that are in the top 10% of the nation in terms of quality. The notion that we're suffering from crumbling infrastructure or is one promoted by the pro-TSPLOST crowd but it doesn't hold up to scrutiny. The decline in gas tax revenue is due to fewer miles driven which is in part due to the recession and in part due to demographics. Either way it doesn't make for a good argument to be raising taxes unless you are one of the direct beneficiaries, which would be mainly private contractors and government employees who stand to gain from the redistribution of wealth. Another big problem with the way this was structured by our politicians is that it is a very regressive tax and the beneficiaries don't pay for the costs. Anybody who buys something in the 10 county area will be paying for this, including people who don't drive nor use mass transit. While we probably won't convince each other on this, one thing I do agree with you is that our politicians are spineless. That is why a better option that voting yourselves a tax increase is to vote out all the bums who engineered this TSPLOST, at the county and state level.
Chris P. April 24, 2012 at 12:05 AM
In the immortal words of Speaker Pelosi "we have to pass the bill to find out what is in it!" And the more one digs into this thing worse it gets ... check out this video by a local guy who took the time to give a presentation on the details of the TSPLOST. Apparently there is language in the law establishing a new layer of regional government bureaucracy, including the power to use eminent domain to seize private property in the name of the "public good". And then there is this: "The act gives GRTA the power to build and operate, or force local governments to operate, public transportation systems. Further, it gives GRTA the power to cut off transportation funds to developments of regional impact of which it does not approve". So much for local control. http://www.youtube.com/watch?v=Nmz1FdCOuAs&feature=relmfu
Brian Davis April 24, 2012 at 08:13 PM
Are roads are not crumbling but they are over capacity. If you want new capacity more funding is needed. Without the TIA, GDOT becomes a road maintenance agency. Also- GRTA can use the power of eminent domain now, as can GDOT.
patrick May 27, 2012 at 01:14 AM
Atlanta wouldn't exist without transportation and the hub it's been for roads, rail and air. Madoff's money went to him and his lifestyle. This plan isn't the same type of scheme unless we allow lawmakers into the fray. This plan isn't perfect but we need transportation investment and we live in a shared society - we do need engineers and planners making project plans and decisions, not politicians and legislators.

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