Ga. transportation plan’s impact on local governments still a question

Legislation aimed at raising $1 billion in revenue for transportation continued to generate confusion a day after it was introduced in the state House.

One of the big questions that remained unanswered: Would it be funded on the backs of local governments?

House Bill 170, filed in the House on Thursday, switches the state from a series of local and state sales taxes on gas to a 29.2 cents-per-gallon excise tax. By doing that, it takes more than $500 million a year that local governments had used for schools, transportation, sewers and more, and gives it to the state.

Revenue gained from motor fuel purchases through local option sales taxes, commonly known as SPLOSTs, would be phased out when those taxes expire. While the bill would then allow cities and counties to levy their own excise taxes — up to 6 cents per gallon each — analysis of the plan shows most counties would end up losing money.

DeKalb County, for example, brought in more than $31 million in sales taxes on all forms of motor fuel in fiscal 2014, according to the Georgia Municipal Association and the Department of Revenue. A single excise tax of 3 cents per gallon would bring the county just under $10 million. Doubling that — should the county adopt both available excise taxes — would produce just under $20 million.

The municipal association on Friday warned its members that the bill “would create a substantial funding shortfall for cities, counties and schools, and would shift the burden to raise taxes to local elected officials.”

Supporters, however, urged local officials to be patient, and they pointed out that counties currently share much of their sales tax revenue from motor fuel with municipalities. In the House plan, the counties would keep all they collect and each city could levy its own tax of 3 cents per gallon.

“It is our understanding that the intent of the legislators who introduced this measure is that no harm is done to local governments and that they in fact come out whole or even better off than they are today,” said Joselyn Baker, a spokeswoman for the Georgia Chamber of Commerce. “We appreciate the attention being paid to Georgia’s communities and will be watching the process closely to make sure that the benefits of increased funding — including economic growth — are experienced throughout our state.”

The bill’s sponsor, House Transportation Committee Chairman Jay Roberts, R-Ocilla, said he will happily meet with local officials but makes no promises.

“I’m willing to listen to what they have to say,” Roberts said in a Friday interview. “At the end of the day I’m about what’s best for Georgia and best for transportation. I don’t know we’ll ever make everybody whole.”

Gwinnett County Commission Chairwoman Charlotte Nash is willing to learn more before deciding whether the bill is good or bad.

“This is early in the process,” she said. “We’re going to see lots of discussion. I anticipate there will be adjustments to the legislation.”

Nash wasn’t too worried that the bill would require counties and cities to use excise tax money on transportation projects. She said most of Gwinnett’s current sales tax is already used for transportation projects. Voters could still approve future sales taxes on purchases not involving gasoline for parks and other nontransportation priorities, she said.

Though the county might receive less revenue, “there is still a substantial amount of money available.” Nash said. “We still have flexibility.”

Clint Mueller, the legislative director for the Association County Commissioners of Georgia, said his organization has not yet taken a position on the bill.

“We still have some questions about some areas of the bill, if that’s what legislators truly intend or not,” Mueller said. “There’s a lot of variables here that are in place.”

Already, some county leaders have publicly slammed the bill and then softened their position as more information came to light.

Cobb County Commission Chairman Tim Lee said Thursday at a town hall meeting in Acworth that he could not support the bill.

“They’re trying to do it revenue-neutral, but how (it’s) revenue-neutral for the state is they shifted it around the state,” Lee said, according to The Marietta Daily Journal. “But then they take it from us, meaning that they basically want to remove the sales tax from gasoline and shift it over to another source that goes to the state, but that revenue comes from us.”

On Friday, Lee issued a more conciliatory statement. He applauded the Legislature for “taking a serious approach to examine all options” and said he is studying the proposal.

“My comments in Acworth yesterday were simply to state my concern that the restructuring of state revenue not be a burden to our schools and local governments,” Lee said. “However, I also want to remain a constructive partner with the Cobb delegation to seek solutions on this important issue.”

Others also expressed concerns. Fulton County Commission Chairman John Eaves said he’s worried about provisions that would allow local governments to use the excise tax only for transportation projects. He said he’d like to have the flexibility to use the money for other types of capital projects.

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