Freezing gas tax will save drivers up to $80M


The Atlanta Journal-Constitution
Published on: 06/02/08

It may seem like only pennies at the pump, but Gov. Sonny Perdue's decision Monday to stomp the brakes on a gasoline tax hike could collectively save motorists $70 million to $80 million over the next year.

Perdue's decision on an increase due to take effect July 1 will save most motorists 2.9 cents per gallon. The Department of Revenue recalculates the state gasoline tax every six months. The tax rate is based on the price per gallon, so as fuel costs rise, so does the tax.

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"I don't think we can justify raising taxes on gasoline in a time of economic stress for many families," Perdue said during a Capitol press conference. "I hope we can send a clear signal to Georgia's families that we understand the strain on their budgets brought on by high gas prices.

"We are doing all we can from a state's perspective to address that."

If the governor hadn't acted, the state tax on a gallon of gas would have jumped to 21.4 cents, including an excise tax. The combined tax is now 18.5 cents.

House Democrats applauded the Republican governor's move. They have been calling on Perdue to take some action to help with gas prices for several weeks.

"We're glad the governor has agreed with us and decided to suspend the gas tax increase, which Democrats called for in the middle of May," Rep. Rob Teilhet (D-Smyrna) said in a release.

The savings for Georgia drivers will take away money that would have been spent for road construction and maintenance next fiscal year. That's how gas tax proceeds are used.

The governor's office estimated the $70 million to $80 million in savings for drivers based on how much gas they currently use.

Already, gas consumption has dropped as Georgians cut back at the pump.

Through the first 10 months of the fiscal year, which started July 1, drivers had bought 132 million fewer gallons of fuel than in the same period the year before, a decline of 2.4 percent, according to the state Department of Revenue. Figures for May should be coming out in the next few weeks.

Perdue's suspension also freezes state taxes on other categories of motor fuel, including diesel, aviation gasoline, liquid propane gas and "special fuels," which includes compressed natural gas.

For instance, state taxes on diesel used in vehicles, including the excise tax, were set to rise 4.2 cents a gallon to 24 cents on July 1.

Georgians also pay 18.4 cents per gallon of gas in federal taxes and a local tax that varies from county to county. Those taxes won't be affected by the governor's decision.

Perdue last month suspended all state taxes on fuel for off-road vehicles used by farmers and timber workers.

The governor said the state can't afford to give the same tax break to Georgia drivers. The state is expected to collect about $1 billion in fuel taxes during fiscal 2009.

Perdue's action Monday will freeze taxes until the Georgia General Assembly meets again next January. He will then re-evaluate the situation and may continue the freeze if prices haven't fallen, officials said.

Perdue suspended gasoline taxes for all Georgians briefly in 2005 after Hurricane Katrina brought a run-up in prices at the pump.

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Comments

By JD

Jul 2, 2008 6:33 PM | Link to this

The article is misleading: It's not going to save motorists $70-$80 million; rather, it's going to save motorists a few dollars and cost the state $70-$80 million. How are we going to fund transit and maintain the roads if we keep making foolish, meaningless choices like this. The gas tax should be raised and the money should be spent on improving the alternatives so that we can reduce congestion, pollution, and dependence on foreign governments.

By Steve

Jul 2, 2008 3:56 PM | Link to this

Howcum, since our gas tax is supposed to be the lowest in the country, that everywhere I went in Ala, Miss, and La on vacation last month, prices were lower than here. I filled up for 3.76 in Alexandria, La.

By Mark

Jun 6, 2008 12:05 AM | Link to this

It is amazing to some of us that keep up with our "total tax bill", from sales taxes, gas taxes, local option taxes, property taxes, and state income taxes, that some morons think a 3 cent a gallon tax cut on a future tax increase will actually hurt the state.... Georgia has some of the highest taxes in the whole nation....and don't sell me the line we need it for the growth....let the rich investors and developers start paying their fare share and you can have road inprovements. Quit looking to the average Joe's pocket for a new tax increase we've had enough!
Another thing, some of you need to take your know-it-all liberal attitudes back to the overtaxed depressed democratic jobless states you came from.

If sonny and our reps were worth their weight...they would suspend taxes on gas all together... enough is enough! Build refineries and drill off Georgia's shores...if we don't China will show us how.

By Jim

Jun 3, 2008 12:00 PM | Link to this

How will this affect the transporation budget?

By Steve

Jun 3, 2008 9:48 AM | Link to this

I just laugh at people down here who continue to vote Republican. Don't whine about our issues here - you voted these idiots in.

Still driving your SUVs around?
LMAO

A Southern Progressive

By Chris

Jun 3, 2008 8:54 AM | Link to this

Great job, Sonny. People are really going to notice 2 cents when gas prices jump more than that overnight.

By Joey

Jun 3, 2008 1:10 AM | Link to this

This is the most irresponsible thing you could have done, Sonny. Instead of 2c per gallon for us all to share, the whole state goes further into debt. You could have used that $80 million to improve my gas efficiency by rebuilding congested intersections and adding lanes to interstates throughout the state. No backbone whatsoever. You're a moron. Thanks.

By Joey

Jun 3, 2008 1:10 AM | Link to this

This is the most irresponsible thing you could have done, Sonny. Instead of 2c per gallon for us all to share, the whole state goes further into debt. You could have used that $80 million to improve my gas efficiency by rebuilding congested intersections and adding lanes to interstates throughout the state. No backbone whatsoever. You're a moron. Thanks.

By pfc

Jun 2, 2008 9:39 PM | Link to this

THANK YOU BUSH AND CHENEY FOR BAMBOOZLING SO MANY PEOPLE.

By GaLiberal

Jun 2, 2008 8:53 PM | Link to this

Typical Rethuglicon stupid symbolism. Instead of addressing the root cause of this problem (Bush running the country into the ground), the Laughing Fat Man stoops to cheap politics that will actually cost the state $80 million. The Rethuglicon mentality must be to find stupidest short-sighted thing to do and that's the solution. Not to mention this will simply increase consumption my making gas artificially cheaper.

When you vote Rethuglicon, you vote against your own best interests. And the LFM's delaying a tax increase of less than $0.03 is living proof.

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