Deal unwilling to embrace cigarette tax
Gov. Nathan Deal did his part Wednesday to quash any effort to raise the state’s cigarette tax.
“I have not been in favor of the cigarette tax in the past,” he said during an interview. “And I have no real reason at this point to change my mind.”
A recent analysis by Georgia State University estimated that the state could raise $585 million in additional revenue by boosting the state’s 37-cent tax on a pack of cigarettes to $1.60, near the national average.
Some supporters saw it as a way to help pay for the state’s transportation needs. Others have said it would help deter smoking, lowering the state’s health care costs.
Critics, though, say most smokers will travel to neighboring states with lower cigarette taxes to buy their tobacco.
The governor appeared sympathetic to that argument and also questioned whether the tax could be a reliable source of funds.
“I know there are all sorts of arguments that can be made, health issues and otherwise, but I don’t think that’s an area we should depend on for any significant revenue,” Deal said. “It’s regressive and it sometimes hits those who can least afford to pay the extra cost.”
— Greg Bluestein
A plan supporters hope will generate $1 billion in new funding for transportation scored a major victory Wednesday when the House Transportation Committee overwhelmingly voted to approve the bill.
House Bill 170, sponsored by Rep. Jay Roberts, R-Ocilla, now heads to the House floor and could be considered there as soon as Thursday, although a Friday vote is more likely.
Only three committee members voted against it: Republican Reps. Ed Setzler of Acworth, Tom McCall of Elberton and Tommy Benton of Jefferson. All Democrats on the committee voted in favor.
The version approved Wednesday includes changes designed to appease local governments, who were concerned earlier versions devastated their local tax bases.
“We have heard from governmental officials that are concerned about what we were doing in the last (version),” Roberts said. “We tried to address a lot of those concerns. We’re not going to make everybody 100 percent happy. We never really set out to make everybody 100 percent happy.”
Deleted is a plan to get local governments out of the business of taxing the sale of motor fuel, instead letting them charge excise taxes up to 6 cents per gallon. The bill now would let cities, counties and school districts keep doing mostly what they’ve been doing: using local option sales taxes to fund specific priority lists.
Under the bill, special local option sales taxes levied by cities, counties and school districts would continue, but whatever percentage of the tax that comes from motor fuel would have to be spent on transportation-related projects. For school districts, that could include buses, drivers and fuel, among other items.
Other local taxes, including the local option sales tax used to roll back property taxes and Atlanta’s sales tax to fund water and sewer repairs, would no longer apply to motor fuel. Instead, those taxes would increase from 1 percent to 1.25 percent.
Left unchanged is a plan to phase out state sales taxes on motor fuel. The bill instead would create a state excise tax on fuel of 29.2 cents per gallon, plus a new annual registration fee on electric vehicles and elimination of a $5,000 state tax credit for electric cars.
The Atlanta Journal-Constitution reported late Tuesday that an official state estimate found HB 170 would raise $870 million in the fiscal year that begins 2016 and slightly more than $1 billion by fiscal 2020. The adjustments made to the bill in committee Wednesday don't appear to change that.
The committee’s vote “is a major step along the way toward meaningful action,” House Speaker David Ralston, R-Blue Ridge, told the AJC. “This brings us closer to the goal.”
Ralston said the fiscal note’s estimate is not a concern.
“We can debate that point,” he said. “At the end of the day, we have to accommodate a lot of concerns and a lot of different views. I don’t think there’s a magic number we have to be wedded to.”
Gov. Nathan Deal, too, expressed his support for the bill. In a tweet from his official account, Deal said: “The transportation bill OK’d by House committee is the right path to tackle our mobility challenges.”
But gone from the bill approved Wednesday is language designed to dedicate a portion of the money raised to fund transit. Roberts and House leaders have committed to using the money raised from the electric vehicle registration fee — estimated to raise between $7.5 million and $15 million — for buses and rail. But the Georgia Constitution prohibits that sort of dedication outside of the annual state budget.
"As much as I trust your openness and willingness to talk about transit," Rep. Pat Gardner, D-Atlanta, told Roberts, "I'm very excited transit has finally found its day in the sunshine in this state. It's hard when you don't see it."
Roberts said he understood and repeated his promise to get $100 million in bonds for transit in the budget.
“If I could have put it in this bill and showed there’s a $100 million bond sitting there for transit, I would have,” Roberts said. “I can’t do it in this legislation.”
Wednesday’s meeting came amid renewed concerns about the cost of congestion and poorly maintained roads in Georgia. A report issued Tuesday by TRIP, a Washington-based transportation policy group, found that one in 10 local and state-maintained urban roads and highways are in poor condition. Meanwhile, 16 percent of Georgia’s bridges are structurally deficient or functionally obsolete.
The report said Atlanta-area drivers each pay about $1,925 per year in increased vehicle operating costs and lost time because of delays arising from congestion, poorly maintained roads and traffic crashes where road features were a contributing factor.
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