Local Communities Speak Out Against Proposed Transportation Bill

Local governments are weighing in on the impact the passage of a controversial transportation bill could have on their budgets.

State House Bill 170 or the Transportation Funding Act would take sales tax revenue from gasoline sales that normally goes to local governments and give it to the state for transportation and road improvements.

If it passes, the measure would provide another $1-billion for state transportation by moving from a state sales tax on fuel to an excise tax.

While it would provide over $1 billion for state transportation, there are concerns that the move from local and state sales tax to an excise tax eliminates more than $500 million that currently goes to local governments. The bill does allow local governments to levy their own excise tax, but essentially pushes the challenges of raising tax revenue to local governments. – See more at: http://georgiaplanning.org/georgia-planning-news/hb-170-transportation-funding-act-of-2015/#sthash.ceHOXou2.dpuf

City and school representatives who opposed earlier versions of the bill have said the original proposal would take millions in sales taxes on gasoline from their budgets as the state shifted to a 29.2 cent per gallon excise tax dedicated for transportation spending.

The measure passed in committee last week with significant changes, but Lavonia City manager Gary Fesperman said his town still stands to lose a significant amount of sales tax revenue if the bill passes as currently written.

“The impact to the City of Lavonia, the way it’s written right now, the impact would be a loss of about $80-90,000 in sales tax revenue,” he said. “We rely heavily on the gas tax revenue which is a large part of our General Fund budget.”

Most of that revenue Fesperman said would be lost from sales of diesel fuel to trucks coming off the Interstate.

Speaking at last Saturday’s Eggs & Issues breakfast in Hartwell, State Representative Alan Powell said the net effect is an 8-cent per gallon increase on excise tax and a quarter percent sales tax increase on everything from fuel for local governments.

But Powell still holds to the opinion that a blanket tax is not the way to go.

“I don’t think a sales tax is the proper way to fund transportation,” Powell said. “It needs to be on the specific category that causes the problem; that’s cars, motor fuel and things like that.”

Powell believes there are other ways for the State to garner extra revenue for the Transportation Dept.

“What about toll roads? Let the user pay. That’s the idea behind a user fee,” he said.

The Bill has not been withdrawn and has gone back to the Transportation Committee for more review.