Georgia House Speaker David Ralston waves after being re-elected on the first day of the legislative session in the House Chamber of the State Capitol in Atlanta on Jan. 12.
ATLANTA — Leaders in the Georgia House of Representatives on Wednesday revealed their proposal to increase state funding for transportation by $1 billion annually through a combination of changes to the state’s gas tax and a usage fee for owners of alternative fuel vehicles.
The plan, announced by House Speaker David Ralston (R-Blue Ridge) and House Transportation Committee Chairman Jay Roberts (R-Ocilla), would also add $100 million in bonds to the fiscal 2016 budget to be used to rehabilitate bridges and roads, though Roberts said it has yet to be decided how the bond revenue will be distributed around the state.
In Georgia, motor fuel is taxed in two ways. First, there is a 4 percent sales tax levied by the state. Of the 4 percent, 3 percent goes to the Department of Transportation. The other 1 percent goes into the state’s general fund budget.
The other tax is an excise tax levied at 7.5 cents per gallon regardless of the price of gas.
The plan announced Wednesday would do away with the sales tax on motor fuel, raise the excise tax to 29.2 cents per gallon, and tie the tax rate to fuel efficiency standards and the consumer price index, which measures inflation.
Roberts said the 29.2 cents per gallon figure “approximates the average sales tax collected on a gallon of gas over the last four years.”
As a result, Roberts explained, consumers would not end up paying more at the pump, as the increase in the excise tax is equivalent to the decrease in the sales tax. The plan would essentially move the “fourth penny” that currently goes into the general fund into the DOT’s budget, Roberts said, and would generate about $175 million in new money for the DOT.
Ralston stressed the importance of increasing transportation funding but emphasized the proposal would not force Georgians to pay more in taxes.
“This is a quality of life issue, it is a public safety issue and it is an economic development and job creation issue,” Ralston said. “This plan will provide more than $1 billion annually in new transportation dollars. It does not result in an increase in state taxes on Georgians.”
Debbie Dooley, state coordinator for the Georgia Tea Party Patriots, said her organization will be opposing the bill. She said Georgia House Republicans are trying to “deceive voters,” who she said will be paying more at the pump.
“They’re hitting everyday Georgians the hardest while giving massive tax breaks to corporations like Delta and are spending tens of millions of dollars to help build a new parking deck for the Atlanta Falcons stadium,” she said. “They are not spending our tax dollars wisely now, and instead of going after all the corporate tax breaks and other areas, they’re raising new revenue.”
For counties like Cobb that have voter-approved special purpose local option sales tax programs, the plan would allow for those sales taxes to continue to be collected on gasoline until the SPLOST programs expire.
The sales tax in Cobb is 6 percent. Four percent goes to the state, 1 percent goes to fund county government capital improvement projects and another 1 percent goes to capital improvement projects in the Cobb and Marietta school districts.
“The people voted for them, we’re going to allow them to continue,” Roberts said.
Future SPLOST programs would not collect taxes on motor fuel if the bill is passed, he added.
Additionally, the bill would allow local governments to levy their own excise tax on gasoline with the proceeds mandated for transportation projects. Roberts said counties and cities could each levy up to 3 cents in excise tax for a total of 6 cents in local gas taxes. For instance, Cobb County could levy a three cent tax and the city of Marietta could levy a three cent tax, putting the excise tax on motor fuel in the city limits at 35.2 cents per gallon.
An increase in the excise tax would have to be approved by the voters, Roberts said.
“Local governments will be able to collect up to 6 cents excise tax — 3 for counties, 3 for cities — for transportation once their local SPLOSTs expire,” he said. “They will vote on that, and if they vote to approve it, then that will be added for transportation purposes.”
Clint Mueller, legislative director for the Association of County Commissioners of Georgia, said if the bill is passed, local authorities would lose any revenue they were receiving through SPLOSTs or E-SPLOSTs levied on motor fuel, but they could regain those funds if they enact the extra excise taxes the bill allows for.
“They can make that up by levying this 3 (cent) excise tax; however, the 3 (cent) excise tax obviously is dedicated only to transportation,” he said.
Mueller said the ACCG would have to consult with its members before announcing whether the organization would support the bill.
“County governments are a big component of the transportation network. In fact, 70 percent of the lane miles in the state of Georgia are maintained by your county governments — not the state, not anybody else. Because we’re such a big component of the network, this is a very important issue to us.”
The ACCG has worked with lawmakers on the issue of transportation funding in the past, and Mueller said his organization would continue its efforts.
“Everybody agrees on the problem, it’s just, how do we all work together to find a solution to the problem,” he said.
The usage fee for alternative fuel vehicles would apply to those that run on electricity, propane or natural gas, but would not be levied on drivers of hybrid vehicles, Roberts said. The fee would be $200 per year and $300 per year for commercial vehicles and would raise about $7.5 million for the DOT annually.
More details of the plan are expected today when it is filed as legislation. Additionally, Ralston said more details will come as the bill moves through the House.
“I expect the bill to be thoroughly vetted as it goes through the legislative process,” Ralston said. “We welcome constructive discussion and debate, but the time to begin the process is now.”
Rep. Ed Setzler (R-Acworth) proposed similar legislation in the House during the first week of the legislative session. His proposal would also eliminate the sales tax on motor fuel, but would only raise the excise tax to 22.5 cents per gallon. Setzler plans to offset the increase in the gas tax by lowering the state’s income tax rate.
Setzler said he’s familiar with Ralston and Roberts’s proposal, but hasn’t studied it in enough detail to comment.
“I’ve not had an opportunity to look over the specific language of the bill or the numbers, and I know there’s going to be a number of things adjusted in it, so I’m still in study mode,” Setzler said.