Georgia Gov. Nathan Deal has signed into law a $900 million-per-year transportation funding bill that includes a fuel tax increase and a new fee on trucks.
“The steps taken were tough but necessary, and I appreciate the hard work on all sides of the aisle in order to boost our ability to do business and keep Georgians safe,” Deal said in a news release.
The state’s fuel tax now 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.
Previously HB170, the new law converts fuel tax collection in the state to a pure excise tax.
The governor said the state faced obligations that could no longer be ignored, and available resources were “simply not enough to preserve the infrastructure we need … to keep the lifeblood of our economy pumping.”
Starting July 1, the gas tax rate will be set at 26 cents per gallon. The diesel rate will become 29 cents.
The tax increase is expected to raise $700 million for transportation work.
Rep. Jay Roberts, R-Ocilla, says the funding plan will help the state cover a transportation funding shortfall in excess of $1 billion per year.
“We now have a sustainable and reliable revenue source that will allow our state to prioritize the necessary maintenance, improvements and growth of our transportation infrastructure,” Roberts stated.
The change in how fuel tax revenue is collected will also result in about $180 million being rerouted from the state’s general fund to transportation.
In addition, fuel tax rates will be adjusted to inflation. Roberts said the indexing component of the law provides a reliable, predictable source of transportation funding.
A protection included in the deal also ensures that fuel tax revenue is applied solely for transportation purposes.
Roberts said it represents “a fundamental shift” in the state.
“We’re saying as we go forward any and all money collected off motor fuel will be spent on transportation.”
Truckers will also be responsible for paying an additional tax, dubbed the “highway impact fee.” Commercial vehicles weighing between 15,500 and 26,000 pounds will be assessed a $50 annual fee. Trucks heavier than 26,000 pounds will be charged $100 per year.
An annual fee on electric vehicles will also be assessed. Affected commercial vehicles will be charged $300 while the registration fee on electric-run personal vehicles will be set at $200.
Another new fee will be collected on visitors to the state. Specifically, a new $5-per-night hotel/motel tax estimated to raise $200 million per year will be routed for transportation purposes.
Local governments will also be allowed to place transportation sales tax proposals of up to one penny on their ballots.
To view other legislative activities of interest for Georgia, click here.
Copyright © OOIDA