A report released by a Georgia state legislative panel has found a transportation funding shortfall in excess of $1 billion per year. The best ways to fill the gap are expected to be addressed during the three-month session that begins Monday, Jan. 12.
The Joint Study Committee on Critical Transportation Infrastructure Funding has offered multiple options to help address the issue. One option touted for consideration by the group of state lawmakers who held eight public hearings across the state is a 1-cent statewide sales tax to benefit transportation.
The sales tax would generate $1.4 billion annually, which would raise enough money to fill the gap needed to maintain roads and bridges throughout the state.
However, the report found that the state would need as much as $3 billion more each year to increase interstate capacity to accommodate increased freight flows resulting from the Savannah Harbor deepening projects, boost transit options, and make other improvements.
Another option to help the state pay for a wide range of projects includes indexing the fuel tax to inflation, construction costs or the price of fuel. A similar approach would simply raise the state’s flat excise tax on fuel purchases.
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.
The panel reports that a 10-cent-per-gallon increase in the excise tax would raise an additional $600 million per year.
A separate option calls for converting the sales tax on fuel to an excise tax. The panel touts the advantages the switch would have for the state’s participation in the International Fuel Tax Agreement.
The report explains that the conversion would result in an additional $60 million to the state.
Other options expected to be addressed during the session include charging usage fees to owners of alternative fuel vehicles and ending the diversion of 1 percent of the sales tax on fuel purchases for non-transportation purposes.
The panel suggested the annual fee on alternative fuel commercial vehicles could be set at $300 while the fee on alternative fuel personal vehicles could be set at $200, and indexed to inflation.
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