HB 170 is the most significant attempt by the State Legislature to address funding of transportation infrastructure at the state level following the widespread defeat of the T-SPLOST in 2013. We anticipate that this legislation will change as it goes through the legislative process. While it would provide over $1 billion for state transportation, there are concerns that the move from local and state sales tax to an excise tax eliminates more than $500 million that currently goes to local governments. The bill does allow local governments to levy their own excise tax, but essentially pushes the challenges of raising tax revenue to local governments.
A good summary of the legislation is provided by the Council for Quality Growth:
- Conversion of the Sales Tax on Motor Fuel to an Excise Tax, adjusted annually to keep pace with fuel efficiency of vehicles;
- Continuation of current SPLOSTS approved by voters until their planned expiration dates;
- Allowing counties and cities to levy an excise tax up to 3 cents each (6 cents total) for local transportation projects, by approval of county commission or city council;
- Allowing additional excise taxes on motor fuel beyond 3 cent limit would be subject to voter approval;
- Instituting a user-fee of $200 for non-commercial alternative fueled vehicles and $300 for commercial alternative-fueled vehicles;
- Recapitalizing of the Georgia Transportation Infrastructure Bank to create a revolving, self-sustaining loan and grant fund is created to incentivize local governments, CID’s, authorities, etc. to provide matching funds for local construction projects.
Most of the resistance to the bill has come from local governments who collectively stand to lose the $520 million they currently receive from local sales taxes on motor fuel (Georgia is one of the few states that allows local governments to tax motor fuel for non-transportation purposes). Current SPLOST, E-SPOLST, etc. taxes would be grandfathered in (allowed to continue to collect sales tax on motor fuel) until they come up for renewal. If renewed by local voters at that time, they would no longer be permitted to collect sales tax on motor fuel.