Georgia fuel tax increase clears first committee

By Keith Goble, Land Line state legislative editor | 2/19/2015

An effort moving forward at the Georgia statehouse is intended to make sure the state does not get left behind in the push among states around the country to address concerns about transportation revenue.

The House Transportation Committee voted on Wednesday, Feb. 19, to advance a bill that includes a fuel tax increase and changes to IFTA fee collection.

Committee Chairman Jay Roberts, R-Ocilla, said the funding plan will help the state cover a transportation funding shortfall in excess of $1 billion per year.

Georgia’s fuel tax is a two-part tax. A percentage portion of the tax is calculated twice annually and is based on the average price per gallon of fuel in the state at the time. The excise portion of the tax adds 7.5 cents per gallon – a rate that has remained unchanged since 1971.

Roberts’ bill, HB170, would end the collection of the 4 percent sales tax at the pump. In exchange, the excise tax rate would rise to 29.2 cents. The rate would also be adjusted to inflation.

He said the indexing component of the plan would provide a reliable, predictable source of transportation funding.

A protection included in the bill would ensure that fuel tax revenue is applied solely for transportation purposes.

Roberts said the state needs to act now to address transportation needs throughout the state.

“If we don’t move forward … we’re going to send the wrong message,” Roberts told committee members before the vote. “Other states around us and throughout the U.S. facing the same issues either addressed them or are addressing them.”

He has also touted converting the sales tax on fuel to an excise tax because of the advantages the switch would have for the state’s participation in the International Fuel Tax Agreement. It is estimated the change would bring another $60 million to the state.

Another provision in the bill calls for overhauling the collection of local taxes on fuel purchases. In exchange, counties and cities could increase the local sales tax rate from 1 percent to 1.5 percent.

The annual fee on alternative fuel commercial vehicles could also be set at $300 while the fee on alternative fuel personal vehicles could be set at $200, and indexed to inflation.

The full House could take up the bill for consideration as soon as Friday, Feb. 20. If approved there, it would move to the Senate for expected changes.

Roberts said he understands that committee passage is the first step along a long road for the bill before it can emerge as a finished piece ready to submit to Gov. Nathan Deal for his possible signature.

“In the end, hopefully we can come together in the House and Senate and bring forth a bill that gives us some sustainability for the future of transportation here in the state of Georgia.”

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