A House subcommittee on Monday adopted a revised transportation funding bill that significantly changes plans for local governments to collect taxes on motor fuels.
The Transportation Committee panel voted largely along party lines to advance House Bill 170 to the full committee, which could take up the measure as soon as Thursday. The vote came after representatives of cities and school boards raised concerns that even the rewritten bill leaves them with holes in their budgets.
HB 170's sponsor, Rep. Jay Roberts, R-Ocilla, said the bill will continue to change.
“This is still a process,” Roberts said. “We’re still working through it. We’ve made a lot of progress from when we first introduced it.”
As adopted Monday, HB 170 still would levy a new state excise tax of 29.2 cents per gallon on all motor fuels, although Roberts said afterward that he is still waiting for an official state estimate of how much money the bill would raise.
Another new component: The $5,000 tax credit the state offers buyers of electric vehicles would be eliminated. Separate legislation has been filed that would do the same thing, but Roberts said it was suggested he incorporate Rep. Chuck Martin's HB 122 into his own. That would give the state about $45 million more to work with.
Leaders in the House and Senate have all said the state needs to generate between $1 billion and $1.5 billion a year in new revenue for transportation. HB 170 is the first stab at doing so. If that state fiscal estimate shows the bill missing the mark — as many fear — the excise tax could exceed 29.2 cents per gallon.
The revised version scraps plans that would have allowed cities and counties to each adopt their own local excise taxes of 3 cents per gallon on fuel. Instead, the latest plan would be to allow counties to enact taxes of 6 cents per gallon, with the money being distributed among the county and any municipality that chooses to participate.
Those taxes would replace existing local sales taxes on gas, diesel and aviation fuel — and that has raised alarms for many local governments.
Tom Gehl, the governmental relations director for the Georgia Municipal Association, said in some cases the impact on local governments would be “very drastic, very severe.”
Instead, Gehl asked lawmakers to consider allowing cities to levy a higher sales tax rate. He said instead of a 1 percent sales tax, cities could replace revenue lost to HB 170 with a rate of around 1.15 percent.
The problem for cities and counties, he said, is that while HB 170 replaces lost sales tax revenue with money from the excise tax, the bill requires that money only to be spent on “transportation purposes.” Local governments currently use proceeds from local option sales taxes on a variety of things, including property tax rollbacks, parks, police and health clinics.
“Give us instead an adjustment to the sales tax rate that keeps our flexibility in spending an option just like we’ve got currently,” Gehl said.
For school districts, the issue is different. School boards now can levy a special education sales tax to use for capital projects. If HB 170 passes, those education taxes can be renewed, but the tax would not apply to motor fuel, which severely cuts the return.
“I would say please let’s find a way to fix this so that the school districts are not losing something out of their tax base,” said Angela Palm, the director of policy for the Georgia School Boards Association.
Roberts said he was working to find a solution for school districts and said he welcomes constructive criticism and suggestions. But he warned opponents he wasn’t interested in mere complaints.
“If you truly want to figure out how to make this better, then we’ll listen,” he said.
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