Who would win, who would lose in new transportation plan
WINNERS
Chamber of Commerce types who have been pushing the Legislature to act.
Big corporations who say traffic is costing them money.
Road builders and engineers who benefit from increased road construction.
Georgia gas stations and truck stops that truckers now skip because gas taxes in surrounding states are more attractive.
Advocates of transit would get a dedicated stream of money and the promise of funding through bonds that would be included in the state budget. It’s not all they wanted, but it’s more than has ever been proposed before.
LOSERS
Cities, counties and school districts who would lose an estimated $516 million a year and be forced to pass new taxes to replace that revenue.
Drivers of electric and alternative-fuel vehicles who would have to pay an annual user fee of $200 for personal cars and $300 for commercial vehicles.
Those who dreamed of a more robust package of taxes that would generate enough money — read billions of dollars a year — for construction of new passenger rail and new highways.
State budget writers, who would have to fill a $170 million hole in the budget that the bill would create by taking the so-called “fourth penny” of the state sales tax on gas and giving it to the Department of Transportation.
A TRANSPORTATION PLAN FAQ
Georgia House leaders have introduced a plan that would raise almost $1 billion a year to fund transportation projects. Here’s how it would work and affect Georgians at the gas pump:
How would the transportation funding plan work?
At this time, several different taxes are assessed at the gas pump. One is flat and others are based on price per gallon of gasoline. Some of these taxes fund state transportation projects, and others fund local projects such as schools, sewers, parks or roads. Under the House plan, all these taxes would flow into one state transportation fund.
Would my taxes rise?
It’s complicated, but Georgians would pay more at the pump. House leaders say they’re not raising state taxes. The plan says this is to account for the rise in the average price of gas during the past four years. Georgians would pay 29.2 cents per gallon in state taxes. They currently pay about 27.5 cents per gallon.
How is gas currently taxed in Georgia?
That depends on where you live. Generally, Georgians pay about 27.5 cents per gallon in state tax. Here’s how it currently breaks down:
• Excise tax: A flat rate of 7.5 cents per gallon.
• State sales tax: 11.8 cents per gallon. Consumers are charged 4 percent based on the price set by the Department of Revenue, which is currently $2.946.
Of this sales tax, three-quarters of it funds transportation and one-quarter goes to the general fund.
• Local option sales tax: Up to 8.9 cents per gallon. Drivers pay up to 3 percent. These taxes are approved by voters at the city or county level and must be used for special projects such as building schools, parks or transportation projects. These taxes end after five years. Some Georgians pay less than the full amount.
How would this new plan work?
There would be one state gas tax: A 29.2 cents-per-gallon excise tax that would be used solely for transportation, and it would be subject to inflation.
Where did that figure of 29.2 cents come from?
The state decided to base the new gas tax on a price of $3.39, which is the average cost per gallon the past four years.
Can the tax rise to exceed 29.2 cents?
Yes. According to the proposal: "This excise tax will be indexed to Corporate Average Fuel Economy (CAFE) standards as well as CPI (consumer price index) and adjusted annually to ensure that it keeps pace with the ever-increasing fuel efficiency of vehicles. This provides a reliable, predictable funding source dedicated to transportation."
What about those local option taxes that fund schools and local government projects?
They would be honored but would not be allowed to renew after their five-year term ends. In the last fiscal year, local governments collected $516 million in sales tax from gasoline sales – with $172 million of that funding schools. Local governments and the Georgia School Boards Association will likely be studying this plan very carefully.
Can local governments and their voters approve new gas taxes?
Under the plan, cities and counties could each levy an excise tax of 3 cents by simple ordinance and an additional 3 cents each by referendum. Any new taxes would have to be dedicated to transportation purposes.
Can I see how much my local government collects in local gas taxes?
Yes. Click here.
What’s the deal with electric vehicles?
They would be assessed a tax of $200 for noncommercial and $300 for commercial vehicles each year. The thinking behind this is that they use roads but don’t pay for their maintenance through the gas tax. That amount of tax for a personal electric vehicle is equivalent to buying an average of 13.2 gallons of gas per week. The registration fee is indexed to the CPI and can increase or decrease.
What about federal taxes?
The feds currently collect a tax of 18.4 cents per gallon, and that will remain.
— Isaac Sabetai
Comprehensive coverage
The Atlanta Journal-Constitution has Georgia’s largest team at the Gold Dome for this year’s legislative session. To find the most expertise on issues that matter to taxpayers, go to myAJC.com/georgialegislature.
When House Speaker David Ralston, R-Blue Ridge, unveiled the GOP's plan to generate $1 billion in new transportation funding on Wednesday, he was careful to make clear the plan does not raise any statewide tax.
What he didn’t say, however, is that it almost certainly would result in an increase in local taxes.
House Bill 170, filed late Thursday afternoon, is a complicated measure that supporters say will offer a bold plan for meeting the state’s need for new money for roads, bridges and transit.
"This plan will provide more than $1 billion annually in new transportation dollars," Ralston said. "It does not result in an increase of state taxes on Georgians. It will move us forward as a state, all over the state, to addressing a subject we can no longer afford to ignore or kick down the road."
But, as is often said in the Capitol, the devil is in the details.
The bill would transition the state from one excise tax and several state and local sales taxes on motor fuel to one state excise tax of 29.2 cents per gallon of gas.
But this is a problem for local governments: They would lose $500 million in tax revenue that the state would absorb under the plan. To make that up, cities and counties would have to take the political hit to impose new taxes.
Here’s how it would work: Nearly ever local government in the state levies three different special option sales taxes — one for general use, one for education and one to offset property tax cuts. All those taxes have an end date. Under the House plan, those taxes would continue until they expire.
At that point, each city and each county government could choose to impose a local excise tax of 3 cents per gallon of gas. All that money, however, would have to be dedicated to transportation. In addition, the cities and counties could ask voters to adopt an additional excise tax of 3 cents per gallon
So, if a city and its county both impose an additional 6 cents per gallon in taxes, motorists will pay 41.2 cents per gallon of gas in state and local taxes. There’s also a federal tax.
Thus far, local officials are keeping quiet about the bill’s impact until they have time to analyze its effects. But at least one organization has already sounded the alarm.
The Georgia School Boards Association warned local school boards late Wednesday that the plan would cut revenue substantially at the local level, according to a copy of the email obtained by The Atlanta Journal-Constitution.
The House plan would allow local governments to enact new special option sales taxes, but it would exempt motor fuel from the tax. In fiscal 2014, local governments brought in $516 million from local gas taxes, according to the Georgia Municipal Association. The school boards association said about $172 million of that went to school districts.
“Those of you who are in areas with little retail would be especially hard hit,” the school boards association told its members. “You need to figure out how much of your SPLOST dollars are coming from motor fuel and let your legislators know what the impact would be and how it would affect your future plans.”
Analysis of the bill after it was made available shows the depth of locals’ pain. A Georgia Municipal Association review shows the new excise tax of 3 cents would not come close to generating the same amount of revenue as the existing 3 percent local sales tax.
Cobb County, for example, collected $20.9 million in gasoline sales taxes in the fiscal year that ended June 30. The GMA said a 3 cents-per-gallon excise tax would generate $11.5 million. In Fulton County, the difference is more stark. There, the local gasoline tax produced $36 million while the excise tax would only bring in $13.9 million.
Still, there is a sliver of good news for locals in the bill. While it requires that any new local excise tax levied be used for “transportation purposes,” it says that includes “roads, bridges, public transit, rails, airports, buses, seaports and all accompanying infrastructure and services necessary to provide access to these transportation facilities.”
That means, for example, that a school district can use the excise tax money to buy buses, fuel and drivers and put the money it would normally use for that toward something else. Cities could buy police cars and firetrucks and the gas to run them, etc.
It still would require local councils and commissions to vote to levy a new tax, which is often controversial.
Also, a close reading of the bill suggests that MARTA would not affected by it. While the legislation would end any local sales tax on motor fuel, the 1 percent sales tax that funds the Atlanta-area transit system was created by constitutional amendment, which means HB 170 would have no impact on it.
MARTA CEO Keith Parker said the bill shows promise.
“As the metro Atlanta region continues to grow, the MARTA board and I are encouraged that lawmakers recognize that transit should be a statewide transportation funding priority,” Parker said.
In addition to not having its tax source affected, MARTA and the other 127 transit systems in the state could benefit from other parts of the House plan.
The bill says it is the “intention” of the Legislature that a new user fee levied on owners of alternative-fuel vehicles such as the Nissan Leaf be dedicated to transit. That fee would start at $200 a year for personal vehicles and $300 a year for commercial vehicles and could increase or decrease each year with inflation.
Also, Transportation Committee Chairman Jay Roberts, R-Ocilla, said Republican leaders intend to add a "significant" bond package to the upcoming 2016 state budget that would include borrowing $100 million for transit.
Still, Tea Party Patriots leader Debbie Dooley labeled the plan a “scheme” that would raise gas prices by 7.7 cents per gallon.
“House Republicans are causing everyday Georgians to be burdened with higher taxes/gas prices while they give large corporations massive tax breaks and are helping fund a parking deck for the new Atlanta Falcons stadium,” Dooley wrote in an alert to supporters late Wednesday.
Lawmakers, however, were being cautious in their reaction. The bill wasn't available for study until Thursday afternoon. State Rep. Scot Turner, R-Holly Springs, said earlier in the day that he was optimistic.
“I’m pleased with what I’ve heard,” Turner said.
House Minority Leader Stacey Abrams, D-Atlanta, had also not seen the bill when she congratulated Roberts for getting the ball rolling.
“I think it is an important first step,” she said. “The chairman, Jay Roberts, has done a good job on opening this conversation.”
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