In week three of the 2015 Georgia General Assembly, the House of Representatives passed the mid-year budget and began standing committee meetings. On Wednesday, House leadership introduced the Transportation Funding Act of 2015, also known as House Bill 170 (HB 170). Because HB 170 addresses road and bridge funding in our state, it affects every Georgian. I anticipate HB 170 to be very controversial because it proposes significant changes to the tax collection and allocation of motor fuel related revenue.
Why is the General Assembly addressing this issue now? The Georgia Department of Transportation does not have adequate funding to maintain the road system in Georgia. We have 2300 deficient bridges in the state. The current repaving cycle for state routes is at 50 years.
I want to give you a brief overview of the current system of transportation funding so that you may better follow the debate on HB 170. Currently, when you buy a gallon of gas, you pay the Georgia “gas tax” (which includes an excise tax and a sales tax) and you also pay local sales tax. HB 170 proposes to replace the three taxes currently charged with one fixed excise tax. It is important to understand the difference between excise tax and sales tax, as they pertain to motor fuel. Excise tax is a fixed per gallon tax collected. Sales tax is a percentage of the total dollar amount of a fuel purchase. The Georgia gas tax is currently comprised of an excise tax of 19.3 cents per gallon and a 4% sales tax. This 4% sales tax has 3 pennies of every dollar going to transportation needs and the fourth penny going into the state general fund. HB 170 would do away with the 4% sales tax component of the state gas tax, as well as the local sales tax. All monies collected on motor fuel would be in the form of an excise tax. The Georgia state constitution clearly states all excise tax collected on motor fuel will be used for the purpose of providing an adequate system of roads and bridges in the state. The current practice of redirecting motor fuel sales tax revenue to non-transportation related spending will end.
Many Georgians have said that a use tax, like a fuel tax, is one of the fairest taxes. You pay the tax in direct proportion to how much you use the roads. The overarching purpose of HB 170 is to make sure that every penny collected on motor fuel goes directly to transportation related funding. For many years in Georgia, this has not been the case.
Anyone with questions about this issue or any other issues before the General Assembly may reach me at 404-656-0325 or [email protected].
Rep. Dan Gasaway (R-Homer) represents the 28th GA House District. His district includes Stephens and Banks Counties and the southern end of Habersham.
