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Supporters of a House plan to raise at least $1 billion for transportation received a major boost Tuesday when the state’s top organization of county governments agreed to endorse the bill.
"We support the bill as passed the subcommittee yesterday and will continue to work on other recommended improvements," said Clint Mueller, the legislative director for the Association County Commissioners of Georgia.
The support comes after a unanimous vote of ACCG’s policy board Monday night, Mueller said.
HB 170 would consolidate state and local sales taxes on motor fuel into one state excise tax of 29.2 cents per gallon. The bill would phase out almost all local sales taxes on gas, add a new annual user fee for drivers of electric vehicles and end a $5,000 tax credit for buying those zero-emission cars.
The backing of the counties comes at a critical time for House Bill 170, which is expected to face a key committee vote Thursday. The bill, sponsored by Transportation Committee Chairman Jay Roberts, R-Ocilla, has found its strongest critics to be local governments. But now, with counties on board, a major obstacle has been tackled.
Roberts was pleased to have the counties’ support.
“I appreciate their willingness to work with us on this important issue,” he said.
Georgia’s cities, however, remain opposed, Georgia Municipal Association spokeswoman Amy Henderson said. Municipalities still lose money under the bill, she said.
Move to halt tax cut sparks division
The move to end the tax credit for purchasing electric vehicles has raised hackles in some corners.
The $5,000 tax credit, estimated to cost the state about $45 million, has helped make Georgia one of the top markets for electric vehicles, such as the Nissan Leaf.
But while the bill would end that tax credit as of July 1, it does not take away a tax break adopted last year that gives businesses up to $20,000 for the purchase of heavy-duty alternative-fuel vehicles and $12,000 for medium-duty ones.
Rep. Chuck Martin, R-Alpharetta, has tried for the past two years to end the $5,000 credit for electric vehicles and has filed House Bill 122 again this year to do so. The language from his bill was added to the transportation legislation on Monday.
Martin said it makes sense to end one — the consumer credit — but not the other.
The electric car tax break, he said, has turned into “an entitlement.” Buyers of Leafs, for example, also get a $7,500 federal tax credit, and with savings on gas and oil, they can almost get the car for free when the state tax break is factored in.
Plus, Martin said, there is no cap on the credit and it never expires.
Business tax credit called different
That's not the case for the business tax credit. House Bill 348, adopted last year, caps the cost to the state at $2.5 million. It is set to end on June 30, 2017.
Finally, Martin said, a $20,000 credit for a heavy-duty truck does not come close to covering its entire cost.
“We’re going to correct something that has gotten out of hand,” Martin said.
But Rep. Ben Harbin, R-Evans, says the decision to keep one and not the other doesn't sit well with him.
“It’s unfortunate that the message we’re sending to the consumers of this state is that businesses are more important than you are,” he said.
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