When the proposed transportation funding bill was released last week in Atlanta, elected officials touting the measure used various phrases that included three words: “no,” “new” and “taxes.”
But let’s be clear. If the proposed bill were enacted today, it would raise taxes at the pump substantially, and if it becomes law in anything close to its current form, many millions of dollars will be shifted annually from local tax coffers to the state.
Loyal readers might recall that I supported the 1 percent sales tax for transportation infrastructure that was soundly rejected by coastal voters. As messy as that process was, we at least knew what projects were on the list and when they would be completed.
Of course, if we had passed the so-called T-SPLOST, we’d still be seeing the current maneuvering in Atlanta. This isn’t about Savannah, after all. The vast majority of the money raised under this plan will be spent in the Atlanta metro area and in the farther flung exurbs.
In other words, if the Atlanta region had passed its T-SPLOST, we wouldn’t be faced with this proposed legislation that will hurt taxpayers, motorists and local governments statewide. Rural counties are likely to be hit especially hard.
With gas around $2 a gallon, we are currently paying about 22 cents a gallon in state sales and excise taxes. The proposed legislation would replace those payments with a single state excise tax of 29.2 cents per gallon.
That new excise tax would be subject to annual revisions, almost certainly upward, based upon changes in fuel efficiency of new vehicles and in road construction costs.
As things stand now, local governments get 3 percent in sales taxes for every dollar spent on gasoline, but that money will eventually disappear.
Current SPLOSTs and ESPLOSTs would be grandfathered, but future special purpose local option sales taxes would get no revenue from gasoline sales. The 1 percent sales tax collected by the ongoing local option sales tax (LOST) would apparently disappear.
To fill the holes created by the diversion of local tax revenue, this bill gives municipalities the right to impose excise taxes of up to three cents without a referendum.
Given the current wording, the legislation seems to leave the door open for multiple local governments to impose those 3 cent per gallon taxes. In other words, it’s possible that both Savannah City Council and the Chatham County Commission could impose those local excise taxes, which would raise the excise tax per gallon to 35.2 cents.
The bill contains other onerous elements that I’ll discuss in a future column.
City Talk appears every Sunday and Tuesday. Bill Dawers can be reached via billdawers@comcast.net. Send mail to 10 E. 32nd St., Savannah, GA 31401.
By Bill Dawers