House Transportation Committee members heard testimony Thursday that was decidedly more pro than con, but they took no vote on a plan to boost transportation revenue.
Sponsored by committee Chairman Jay Roberts, R-Ocilla, House Bill 170 seeks to raise more than $1 billion in additional revenue for transportation projects. The bill would eliminate a state sales tax on motor fuels and phase out the local taxes on gas. In their place would be a state excise tax of 29.2 cents per gallon and an optional local excise tax of 6 cents per gallon, with revenue from that local tax split between county and city governments.
Lawmakers heard more than two hours of testimony, and while many in the audience expected the committee to vote, Roberts said that was never the plan. The committee is expected to meet again next week, lawmakers said, but it remains unclear whether a vote will happen then, either. Roberts said he continues to try to find ways to improve the bill, including a way to help school districts who would lose a considerable amount of their sales tax base under the bill.
Thursday’s speakers included Andy Lord of Georgians for a Healthy Future, which wants to add $1.23 to the state’s tax on a pack of cigarettes. Raising the tax to $1.60 could return half a billion dollars a year for transportation, Lord said.
“Transportation is more important than a cheap pack of cigarettes,” Lord said.
Supporters, opponents line up
Those supporting the bill Thursday included the Council of Quality Growth, the Georgia Transportation Alliance and the Georgia Economic Developers Association.
The bill has garnered plenty of opposition, from cities, environmentalists and tea party activists. It also has been labeled a tax increase by Washington-based Americans for Tax Reform, a powerful right-leaning think tank. Roberts, however, said that group’s leader, Grover Norquist, ought to mind his own business.
Norquist “isn’t from Georgia,” Roberts said. “And until he fixes Washington, I don’t want to hear from him. I don’t care what he says.”
Meanwhile, the Georgia Municipal Association suggested its own alternative. The GMA urged lawmakers to scrap the proposed 6-cents-per-gallon local excise tax and instead raise the rate of the local option sales tax from 1 percent to 1.15 percent, according to a copy of the proposal obtained by The Atlanta Journal-Constitution.
Reviving a previous plan
Also, cities want lawmakers to revisit the 2012 Transportation Infrastructure Act, which split the state into mega regions for referendums to raise sales taxes by 1 percent to fund a specific project list. That vote passed in only three regions and failed in the rest, including metro Atlanta. The GMA’s proposal would allow two or more counties within each region to band together for smaller transportation tax votes.
This plan, GMA spokeswoman Amy Henderson said, “will make city and county governments whole from the loss of revenue from taxing gas sales. This will allow them to continue funding voter-approved local projects, including transportation, and continue to (provide) property tax relief.”
As written, she said, HB 170 still blows a hole in city budgets.
The GMA, of course, is not the only critic of the bill. The Georgia Sierra Club lamented the lack of funding for transit in the bill. House leaders have committed to using money raised from a new annual user fee on drivers of electric vehicles for transit. The $200 fee for personal cars and $300 fee for business vehicles would generate an estimated $7.5 million the first year and up to $15 million in future years, sponsors said.
“The bill as currently written squanders a chance to bring long-overdue balance to state transportation funding,” Sierra Club lobbyist Neill Herring said. “Legislators should seize this opportunity to finally fix the dedication issue and open the gas tax to all transportation purposes.”
A pitch for electric cars
Another part of the bill has also sparked criticism.
On Wednesday, the Washington-based think tank Securing America’s Future Energy unveiled a study that shows eliminating the state’s $5,000 tax credit for the purchase of a new electric vehicle would cost the state $252 million over 16 years in lost gross domestic product.
Eliminating that credit, the study said, would lead more car buyers to purchase gasoline-powered cars, which means more consumer spending on gasoline and vehicle repairs. The study said the state would be more vulnerable to spikes in oil prices, as well.