Georgia Governor Nathan Deal (R) on May 4 signed into law a bill to increase transportation funding by $900 million per year, making it the fifth state in 2015 to increase recurring transportation revenue.
The bill, approved by the legislature March 31, includes:
- Increasing the state gas tax to 26 cents-per-gallon (currently, the flat excise tax is 7.5 cents-per-gallon, with an additional 11.8 cents-per-gallon generated by the 4 percent state sales tax on gas), and diesel to 29 cents-per-gallon (from the current 7.5 cents-per-gallon flat tax and additional 13.8 cents-per-gallon generated by the 4 percent state sales tax on diesel);
- Indexing the new state gas tax rate to both the Corporate Average Fuel Economy and the Consumer Price Index (the latter of which will sunset after July 1, 2018);
- Removing the current 4 percent sales tax on all motor fuel;
- Instituting an annual $200 fee for non-commercial alternative fuel vehicles ($300 for commercial alternative fuel vehicles);
- Eliminating the current $5,000 tax credit for new purchases or leases of electric cars;
- Creating a new annual highway impact fee for heavy trucks—$50 for vehicles 15,500- 26,000 lbs, and $100 for greater weights;
- Continuing Special Purpose Local Option Sales Tax (SPLOST) on motor fuel (capped at $3 per gallon), as long as the generated revenue is dedicated to transportation. Local governments would also be permitted to approve a sales tax up to 1 percent for transportation projects;
- Recapitalizing the Georgia Transportation Infrastructure Bank to provide loans and grants to local governments for the purpose of transportation construction projects; and
- Instituting a $5 per night hotel fee.
Upon signing the bill, Gov Deal stated, “Each day, Georgians set out in the pursuit of a brighter future, and it is our roads and bridges that bear the weight of our success. We’ve reached the point where we can no longer keep up with the growing infrastructure demand that encourages job creation, maintains our businesses’ bottom lines and takes us home to our families. This investment reflects our modern-day population and current infrastructure usage. Today, we are ensuring that Georgia’s economic engine will remain running for generations to come. I commend the courage of the General Assembly for tackling this issue head-on and prioritizing public safety and future growth over politics.”
Georgia joins Idaho, Iowa, South Dakota and Utah as states that have increased or changed the formula for their state gas tax this year to generate new revenue for transportation projects. Several states are also pushing to pass transportation funding measures before wrapping up their 2015 legislative sessions.