Cities could get more of the taxes Georgians pay when they buy a car under legislation the House approved this week.
House Bill 779 would change the distribution of tax revenue from motor vehicle sales so cities, counties and school districts get a more equal share. Each entity gets a share of the tax revenue generated in their area; if you buy a car in Atlanta, part of the tax you pay will likely go to the city of Atlanta, Fulton County and Atlanta Public Schools.
Georgia motor vehicle taxes bring in about $2 billion annually, and 65% of that goes to cities, counties and school districts, said Joel Wiggins, a lobbyist for the Municipal Association of Georgia.
Legislation that was passed in 2018 altered the formula, and cities began to notice smaller checks than they’d been used to receiving after it went into effect in July 2019. Cities saw an average of 30% less money than they had gotten before 2018’s House Bill 329 was enacted, Wiggins said. Conversely, school districts and county governments began to notice larger payments.
“The intent was to see all of our local governments benefit,” said Rep. Shaw Blackmon, R-Bonaire, who sponsored HB 779. “Our cities were down, our counties were up and our schools were up.”
Together, the government entities decided they needed a new way to fairly divvy up the funds.
“There was an agreement between our groups that a rising tide could lift all local governments,” Wiggins said.
Under the new bill, counties would receive a slightly smaller proportion of the tax revenue and cities would receive slightly more. County school districts would receive the same proportion, and city school districts would receive a slightly smaller proportion. The plan is a “compromise” between the three parties and would help some municipalities receive the amount of money they had been used to getting.
In addition to the law, funds also hinge on the number and value of cars sold, so the new tax split would not guarantee an increase in revenue, Wiggins said.
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