Articles

Georgia Bank For Transit Projects Proposed

Duane D. Stanford, AJC Staff
Atlanta Journal-Constitution
December 10, 2003

Desperate for cash to relieve traffic congestion, Georgia transportation officials want to create a state bank to speed up construction of highway and mass transit projects.

Modeled after similar programs in states such as South Carolina and Florida, the bank would loan money to local governments and other state transportation agencies to help finance road widenings, bus system improvements or other projects that otherwise might sit unfunded for years.

As much as $100 million would be needed to open the bank, said state Transportation Department Treasurer Earl Mahfuz. The start-up capital could come from the state general fund or federal transportation grants. Once running, the bank would be financially self-sufficient. Interest earned would be reinvested into new loans.

The bank would be managed by an authority and overseen by the Transportation Department, Mahfuz said.

Members of the state Transportation Board's legislative committee signed off on the idea Tuesday but acknowledged it will be a challenge to fund during the current financial crunch.

"I guarantee it will come from dedicated revenue," said committee Chairman Harry Dixon, hinting that the bank could come at the temporary expense of other state programs or transportation projects.

Like any private bank, the state bank would make loans to qualified borrowers or issue investment bonds.

For example: Local governments that couldn't afford to move utility lines or pay their share of costs for a scheduled road widening could borrow money from the state bank rather than put off the project. The county might choose to repay the loan with local option sales tax revenue.

A spokeswoman for Gov. Sonny Perdue said he is interested in the bank and evaluating the idea. The full Transportation Board will decide Thursday whether to ask the General Assembly for permission to create the bank. The 2004 legislative session begins Jan. 12.

The bank proposal was among a package of initiatives being considered for the upcoming session, including proposals to:

• Exempt interstate highways from a law requiring the state to divide certain transportation funds equally among its 13 congressional districts. The House ignored similar legislation in the 2003 session. The Metro Atlanta Chamber of Commerce has been the most vocal opponent of the balancing formula, which it says funnels too much money away from traffic-choked metro Atlanta, where it's needed most. Rural legislators say the law is fair and protects the rest of Georgia from the cash-hungry metro area.

• Shift gas tax collections further up the supply chain and away from distributors, who truck fuel to retailers. Proponents believe the change would help limit gas tax evasions and mistakes, capturing millions of dollars a year in lost tax revenue that could be used for roads.

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