Georgia legislators approved two bills March 31 to increase funding for the state’s transportation infrastructure, including an increase in the state gas tax and large transit bond package.

A compromise bill to generate $900 million per year in new funding was approved by the Senate 42-12, and by the House 129-41. House Bill 170 includes:

  • Increasing the state gas tax to 26 cents-per-gallon (currently, the flat excise tax is 7.5 cents-per-gallon, with an approximately 11.8 cents-per-gallon generated by the state sales tax on fuel), and diesel to 29 cents-per-gallon;
  • 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 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 to 26,000 pounds, 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.

In addition, lawmakers included a $75 million bond for transit in the state’s Fiscal Year 2016 Budget Appropriations Bill (House Bill 76).

Both bills now go to Governor Nathan Deal (R) for review. In a statement released April 1, Gov. Deal said, “The benefits of these new projects will appear in full view. Georgians will soon see the road crews and the orange cones and smell the hot asphalt as it’s poured. That’s the short term. In the long term, they’ll drive on better roads and bridges, giving us not only a better ride but also peace of mind. I look forward to signing this legislation into law and seeing the Department of Transportation provide an excellent service to the people of this state.”

Read Gov. Deal’s full statement.

The Transportation Investment Advocacy Center is currently tracking 31 states and over 100 bills pending legislative action. The State Transportation Funding Initiatives Report is updated on a monthly basis to reflect the most comprehensive information. View the most current report.