The Georgia Legislature’s Transportation Committee has approved a new version of its transportation bill, which now heads to the Rules Committee.
Here are some highlights from various articles as to what’s changed and what’s stayed the same in this version of the bill.
- Local SPLOST and HOST funding won’t come from gas tax, but rate increases – From the Atlanta Business Chronicle. “…in a tradeoff aimed at addressing complaints from local governments, the bill would increase some of the hodgepodge of sales taxes charged at the local level – including Atlanta’s sales tax financing the city’s ongoing sewer system overhaul – from the current 1 percent to 1.25 percent. The increase would help offset the financial impact of a provision in the bill prohibiting local governments from collecting sales taxes on gasoline.”
- Specifics on the “hodgepodge” referenced above from the AJC ” HB 170 would leave alone SPLOSTs and similar taxes levied by school districts but require any revenue raised from motor fuel go to a wide variety of transportation uses. Any municipal option sales tax or local option sales tax used to roll back property taxes, however, would no longer apply to motor fuel and the rate would increase from 1 percent to 1.25 percent. The bill would still abolish existing state sales taxes on motor fuel and implement a new excise tax of 29.2 cents per gallon of gasoline and 33 cents per gallon of diesel fuel.”
- $5000 Electric car state income tax credit axed – From the AJC – The bill would “also would end the state’s $5,000 income tax credit for the purchase of electric vehicles and create a new annual registration fee for electric cars. The fee would be $200 for personal vehicles and $300 for commercial cars, trucks, vans and buses.”
- Airline tax break on gas eliminated – The bill “strips Delta and other airlines of a tax break on the purchase of jet fuel.” The airline industry has benefited from the tax break for over a decade according to the Atlanta Business Chronicle.
- Gas tax to increase 20 cents a gallon – A WABE article adds that the original and revised bill increase the state tax on gas by 20 cents a gallon.
Back in late January, we spoke with City Manager Peggy Merriss about the potential impact of lower revenue from HOST. Here’s her thoughts on what it would mean for Decatur…
If the HOST sales tax is reduced by redirection to a state excise tax, we would either have to do fewer HOST projects, use more property tax revenues or repave fewer local streets. And the local projects that are funded by sales tax revenue will not be funded by the state excise tax, as that will go to state projects. There is no win for local governments in this equation.
We’ve followed up with the City Manager for her thoughts on the recently revised bill, which increases the tax rate from 1% to 1.25% to offset the loss of gas taxes. We will update this post when we receive a reply.
UPDATE: Decatur City Manager Peggy Merriss says that based on their rough estimates, the new proposal to exempt motor vehicle fuel, but up the % levied from 1% to 1.25% should be a “revenue neutral proposition”.
Photo courtesy of Chad
As an electric car owner, I think the axing of the $5,000.00 credit is a bad idea. It is a very progressive policy moving our state towards a cleaner future. And then to make us pay $200.00 on top of that every year is BS too. I am fine to pay something since I don’t pay gas taxes but that is too much.
I disagree on both points. There is absolutely no legitimate explanation for Leaf owners/lessees driving free cars at the taxpayer expense, and every Leaf driver I know agrees. We can argue all day about whether the government should use subsidies to influence consumer behavior and/or help pay R&D costs of promising technologies, but the credit is just way too large.
And the $200 is based on the amount of gas tax paid by the average driver of a gas car. If you want to use the roads, you have to pay for their construction and maintenance.
But, from a fiscal POV, I do understand why you would want to continue to be a freeloader.
Personally, my commitment to the environment is SO STRONG that I refuse to buy an electric vehicle unless the government picks up a big part of the tab. I mean, if the government is not going to reward my virtue with cash benefits, then I’m not going to bother being virtuous.
On a somewhat more serious note, I would love to know the portion of these tax credits being awarded to households with incomes over $100k/year. I would bet it’s way north of 70%. In that sense, the policy is about as regressive as it gets.
How about flipping this tax credit around, so that it doesn’t benefit high earners, but is made refundable after the manner of the earned-income tax credit? Those Nissan Leaf leases are ideal for the working poor (especially those in the burbs) who need to get to work, with the added benefit of the low maintenance and operational costs of the cars. Of course, there is the issue of leases and credit-worthiness, but surely the costs would be more manageable for the purchaser than those associated with sub-prime lending for gas guzzlers.
Even worse. Upper income Leaf owners are at least getting their own money refunded. Making the credit refundable a la the EITC would reward low-income buyers not with their own money, but with others’.
If we want to dole out welfare to the needy, why make it contingent upon their choice of car?
“If we want to dole out welfare to the needy, why make it contingent upon their choice of car?”
Because it’s likely a better choice than one they would or could make on their own. Yeah, I know that’s a patronizing statement, but it’s one based on some experience. I’d rather see welfare money going toward an electric vehicle than cable tv, cigarettes, gambling, etc.
I think you can guess that I am not at all interested in using the tax system to co-pilot people’s lives. But it’s interesting to me that — as far as I understand you — you think that these people make sub-optimal decisions if left alone, but will respond in a predictable way to somewhat complex tax incentives. I’m not so sure. But again, I have no interest in nudging people into certain types of cars, food, what have you.
“you think that these people make sub-optimal decisions if left alone, but will respond in a predictable way to somewhat complex tax incentives. ”
I was really just throwing the idea out there and wasn’t all that serious about it. I recently read the detailed article in CL about the tax credit for EVs, and it got me to thinking how in many ways a car like the Leaf is ideal for low income people but for the fact that the lease would likely be a barrier because of credit requirements. Then my wife reminded me that the tax credits wouldn’t apply to low income people anyway because they aren’t refundable. So that sparked the idea.
My general point is that most “welfare” is contingent on it being spent in a certain way (food stamps are for food only and not all food qualifies etc,), but the EITC can be spent in any fashion. But I take your point regarding incentives.
DawgFan – It is a tax credit. I paid less tax to the state of Georgia which was awesome. And I don’t have a problem with the credit being daylighted in several years but not at one time. As for the $200.00, that comes out to 690 gallons used in a year or 13 gallons a week. That was not my use when I drove an ICE car. So it is unfair. And as for being a freeloader, between my business and personal, I pay way more than my fair share of taxes. So get off your damn high horse.
Not taking sides on this one, but on a percentage basis, that $200 doesn’t make much of a dent in the cost of a Tesla!
No, but $7,500 does, which (I believe) is the combined federal/state incentive for buying a Tesla.
“As for the $200.00, that comes out to 690 gallons used in a year or 13 gallons a week.”
Agreed that’s too high. I’m guessing there will end up being a compromise, in which the tax credit is phased out over a few years and the user fee is cut in half.
I was totally ok with the concept of $200 a year until I saw it broken out like that. Driving my 2002 Saturn from Decatur to Conyers during the work week usually only takes about 10 gal/week. And nevermind the 3 weeks I’m not driving to work and using my part of Delta’s fuel subsidy or paying gas tax in some other state. Kinda a bummer that my shiny new Telsa is going to cost me more in road maintenance fees/taxes than my Saturn does.
So ok, what about the new Chevy Volts? They are supposed to get like 60 miles on one plug in charge before it kicks on the gas engine. I could pretty much make my daily commute on just electricity. Would I have to pay $200 a year since the state would be getting next to nothing from me on gas taxes?
I think you guys seriously underestimate how much gas people in (mostly) the Burbs go through for their commutes. We in-town people with in-town or work from home jobs are the vast minority of commuters in GA. I would guess that the $200/13gal per week is on par for the largest percentage of vehicle users.
True. When I lived OTP, I filled up 2x per week with a 12 gallon tank driving nearly 80 miles per day.
But the range limitations on the Leaf and other EVs means that those vehicles rarely match the miles traveled of their gas counterparts.
I have put 2,600 miles on my EV since November. I drive maybe 20 miles per day via one road and it’s usually parked on the weekends. Should I pay a comparable rate or fee to the state as someone that drives on multiple interstates over 40 miles of roads twice daily? No, because if I were driving a gas car and I reduced my miles driven I would see a cut in my gas spending. So the $200 is completely arbitrary.
It seems pretty high to me. If you assume 12,000 miles per year is average (I think it’s pretty standard) and a typical car gets 25 mpg, that’s 480 gallons purchased annually. At 29.2 cents per gallon, that’s $140 in gas taxes.
Something better get passed at the state house. Our roads and bridges and infrastructure are worn out and in need of serious repair.
Since this is the beginning of what are surely permanent, ever-increasing gasoline price hikes, it seems a good time to daydream about how beautiful MARTA is going to look in the suburbs when their gas guzzlers finally realize how much they need comprehensive public transportation.
If by beautiful you mean covered in graffiti and smelling like vomit then I agree with you. But enough about the East Lake station.
… and here comes the knee jerk anti-MARTA venom from the person who rarely rides.
So while we are killing EV tax credits and assessing user them user fees, maybe we should close the door on the ability to get your Suburban tagged as an alternative fuel vehicle so you can use the HOV lanes while driving solo?