Sales tax revenue intended to pay for voter-approved transportation projects isn’t rolling in as estimated, raising questions about how projects will be funded within the legislated 10-year period.
Through July, collections for the 13-county region encompassing Richmond County were 18.3 percent below projections calculated by the state’s economist when lawmakers and the Georgia Department of Transportation pitched the plan to voters.
Just three of 12 regions across the state approved the tax referendum in July 2012. The two other regions are centered on Albany and Vidalia. The 1 percent tax collections started in January.
Region 7 – which includes Augusta – collected $33.9 million through July. The projection was $41.5 million. August numbers won’t be released until the end of September.
Collections got off to a weak start because some vendors did not report the new tax. January’s collections were 28 percent below projections, according to Diana Pope, the director of the financing division of the Georgia State Financing and Investment Commission. Later months were better, but still not near estimates.
“We haven’t had a month when we were in the positive to get a gain yet,” Pope said.
State economist Ken Heaghney said the variance can largely be explained by House Bill 386, which added tax breaks for agriculture and replaced the ad valorem motor vehicle tax with a one-time title tax due when someone buys a new vehicle.
“Anecdotally, we have heard the agriculture exemption has seen a much bigger take up in usage than expected,” Heaghney said.
Typically, economic forecasts are based on historical data. Because the transportation tax was new, Heaghney used comparable 1 percent sales taxes such as the education local option sales tax used in some cities, he said.
Augusta isn’t the only region struggling to collect the tax as projected. The River Valley (Albany) and Heart of Georgia (Vidalia) regions are 13.5 percent and 18.5 percent below forecasts.
Transportation Department spokeswoman Jill Goldberg said every project promised to voters will be completed but that the weak collections have slowed down construction starts.
By law, a project cannot begin until all the money needed to fund it has been collected. Goldberg said the slow start is giving road planners extra time to ensure projects stay within budget.
“We’re looking at keeping every project as lean and clean as it can be,” she said.
Don Grantham, the District 12 transportation board representative, said no changes are being made to the program yet, but some projects might be scaled back. For instance, instead of paving 10 miles of road just five miles could be paved, he said.
Who knows? Maybe the second, third and fourth years we will be overbudgeted,” he said.