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, 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. In addition to federal taxes, Georgians would pay 29.2 cents per gallon. They currently pay about 27.5 cents per gallon.
How is gas currently taxed in Georgia?
That depends 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. This amount usually changes twice a year, with inflation. Consumers are charged a sales tax of about 4 percent – 4 cents on the dollar – which is then calculated as a cents-per-gallon amount by the Department of Revenue. The last time the DOR reset it, gas was at $2.95.
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 Georgian's 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.
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