GA: Localities forced to hike taxes under transportation plan, GMA says

GA: Localities forced to hike taxes under transportation plan, GMA says

By Louis Mayeux –

Georgia’s cities on Monday stepped up their opposition to the House transportation plan, saying the proposal would force them to raise taxes to pay for local roads and bridges.

Tom Gehl, the Georgia Municipal Association’s director of governmental relations, told InsiderAdvantage Georgia that “cities, counties and schools will be stuck holding the bag” under House Bill 170, which would convert Georgia’s 4-percent gasoline sales tax into the state’s motor fuel excise tax, which would total 29.2 cents per gallon after the change.

The legislation would require cities and counties to replace their gasoline sales tax with an excise tax of 3 cents per gallon. Gehl said that the 29.2 cent state excise tax “essentially precludes the fiscal capacity of cities and counties to use an excise tax to fund transportation because they would be the only players in that proposal to raise taxes.”

House Transportation Committee Chairman Jay Roberts, R-Ocilla, and House Speaker David Ralston, R-Blue Ridge, when introducing the tax package last week emphasized that the program would not raise “state taxes.”

But local governments say the plan would force them to raise taxes to make up for a loss in gasoline sales tax revenues, in opposition to the House leaders’ claims.

According to the Georgia Municipal Association, counties, schools and cities collected approximately $516 million from July 1, 2013, to June 30, 2014, the last period for which data are available. Gehl said that the sales tax on the total amount of gas sold “is going to generate a whole lot more than 3 cents on the sale of a gallon of gas.” The legislation allows counties and cities to raise the excise tax up to 6 cents, if voters approve.

Rep. Stacey Evans, D-Smyrna, said that she hadn’t yet studied the legislation in depth, but on first glance it appears to create problems for cities, counties and schools. “I’m concerned about that,” she told InsiderAdvantage Georgia. “I want to invest more in infrastructure, but I don’t want to do so in any way that’s going to hurt our counties and cities.”

Clint Mueller, legislative director of the Association County Commissioners of Georgia, said the organization has not yet taken a position on the bill and is looking at the legislation further. In an initial reaction last week, Mueller said the bill wasn’t as objectionable as the commissioners had first feared.

But Mueller told InsiderAdvantage Georgia Monday that the organization “wants to get more information from the House.” He said the bill “does a lot of things that they intended not to do.”

He said the association will take a position on the legislation later this week. “We want to know what we’re dealing with before we ask people to take a position.”

The Senate Transportation Committee Monday afternoon held a meeting to gather information on transportation funding in the state, without discussing the House bill. Chairman Tommie Williams, R-Lyons, said the Senate would let the House go through the legislative process before considering the legislation.

Vice Chairman Sen. Steve Gooch, R-Dahlonega, quipped before the meeting ended, “we want to thank the local governments for giving up that half million dollars.”