The House Transportation Committee Wednesday approved legislation that would increase state spending for roads and bridges.
The approved bill removes the former provision allowing counties to levy a 6-cent fuel excise tax. Instead, local sales taxes will remain on gasoline, with the requirement that they be used for transportation purposes only.
Committee Chairman Jay Roberts, R-Ocilla, the bill’s author, said that SPLOSTs levied by county and city governments and E-SPLOSTS by school boards would remain at 1 percent. But local governments could impose a 1.25 sales tax rate on LOST programs used for property tax rollbacks, homestead option sales taxes and E-LOSTS. Those taxes would not apply to motor fuel.
“We have heard from local government officials, and we have tried to address some of those concerns,” Roberts said. “We’re not going to make everyone 100 percent happy. There’s always going to be a little bit of discomfort in every piece of legislation.”
While the Association County Commissioners of Georgia supported the previous version of the legislation allowing the 6 cent fuel excise tax, the Georgia Municipal Association and Georgia School Boards Association opposed the proposal because of lost revenues. The 1.25 rate helps make up for lost revenues.
The bill sent to the House converts the state’s present gasoline sales tax and fuel excise tax into a 29.2 cent per gallon excise tax. According to a state fiscal note, that would raise $870 million in the fiscal year beginning in 2016, rising to more than $1 billion by fiscal year 2020.
The committee voted down a proposed amendment by Rep. Ed Setzler, R-Acworth, that would have required a referendum on county rail projects. Setzler voted against the bill, along with Rep. Tom McCall, R-Elberton, and Tommy Benton, R-Jefferson. All Democratic members supported the bill, although it no longer mentions mass transit because of constitutional concerns.
Although Setzler said he supports the need to increase transportation funding, he’s concerned that the legislation broadens the scope of legislation too much. “It lists things we haven’t included under SPLOSTS before, and that breadth concerns me,” he said. “I do want to express concerns consistent with the amendment I offered that we’re broadening transportation purposes in a very significant way.”
Cigarette tax hike gaining attention: Andy Lord, who represents the Georgia Society of Clinical Oncology and the Georgia chapter of the American College of Physicians, said legislators are showing increasing interest in a proposal to raise the state’s excise tax on cigarettes from 37 cents to $1.60 per pack. The tax rate on the wholesale price of loose and smokeless tobacco would increase from 10 to 43 percent.
Lord, who also lobbies for Georgians for a Healthy Future, said he could not speculate on the proposal’s chances of passage, but emphasized “there is interest. There is curiosity. There’s growing understanding that this is a tremendous amount of money. We think the logic is gaining steam.”
The tax increase would generate from $561 million to $585 million the next fiscal year, according to an estimate by the Department of Audits and Accounts done for Sen. Chuck Hufstetler, R-Rome. Lord said that declines in smoking and revenue decreases from those traveling out of state to buy cigarettes are factored in the figures.
Lord recently presented the figures to the House Transportation Committee as a possible source of funds to maintain roads and bridges, pointing out that 18 percent of Georgians smoke but a large majority drive
But Lord said the money is especially needed for health care. “We didn’t want this Legislature to forget that there’s also a health care crisis,” Lord said, citing struggling community hospitals and Medicaid funding shortages.
Lord said that the state’s Medicaid program spends $537 million a year on tobacco-related illnesses. He said that Georgia has the 48th lowest tobacco tax in the nation and that the $1.23 per pack increase would bring the state up to the taxing average. “By going to average, we generate those millions of dollars,” he said.
But Gov. Nathan Deal told The Atlanta Journal-Constitution he would not support the gasoline tax increase.
“I have not been in favor of the cigarette tax in the past,” Deal told the newspaper Wednesday. “And I have no real reason at this point to change my mind.”
