Is Georgia transportation plan a tax increase? Maybe

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.”