Georgia House leaders Jan. 28 announced a plan to generate $1 billion for the state’s transportation infrastructure without increasing taxes.

The proposal involves converting the state’s existing four percent sales tax on motor fuel into a 21.7 cents-per-gallon increase in the flat excise tax. Currently, three of the four percent sales tax is dedicated to Georgia’s highway trust fund, while the remaining one percent is deposited into the state’s general fund. With this conversion, Georgia’s highway trust fund would gain that final one percent being collected on motor fuel. If approved, the new excise tax would be indexed to both the Corporate Average Fuel Economy and the Consumer Price Index. In addition to providing a reliable funding stream, converting the tax would also make Georgia eligible to participate in the International Fuel Tax Agreement, which would result in the state receiving an additional $60 million.

Other aspects of the plan include:

  • Recapitalizing the Georgia Transportation Infrastructure Bank to provide loans and grants to local governments for the purpose of transportation construction projects;
  • A large bond package which would include bridges and transit; and
  • A $200 fee for non-commercial alternative fuel vehicles which do not use any motor fuel ($300 for commercial alternative fuel vehicles), dedicated to transit systems.

While new special purpose local option sales taxes (SPLOST) on motor fuel would not be permitted under this proposal, SPLOST already authorized would be permitted to continue until their expiration dates. Instead of using SPLOST, local governments would be permitted to approve additional excise taxes up to six cents-per-gallon for transportation projects by county commission or city council approval, with additional excise taxes on motor fuel permitted with voter approval.

Read the full press release about the “Transportation Funding Act of 2015.”