House Bill 170, which would change the way Georgia funds highway projects, is a moving target.
Local officials around the state objected to the way the bill eliminates local sales taxes on motor fuels, requiring action by boards such as county commissions and city councils to make up the difference with a new excise tax.
But that was never the whole bill, and changes are being proposed this week to address some of the concerns of local governments.
Rep. Jon Burns, R-Newington, whose district includes part of Statesboro, has his name on the bill as one of its sponsors.
"This continues to be a work in process," Burns said Friday.
Burns serves on the House Transportation Committee, whose chairman, Rep. Jay Roberts, R-Ocilla, is the bill's author. Both Burns and Sen. Jack Hill, R-Reidsville, served on a study committee that looked for ways to fund road and bridge projects, for which the Georgia Department of Transportation told them the need exceeds the available money by about $1 billion annually.
Currently, Georgia funds road maintenance and construction with a combination of sales and excise taxes on motor fuels. The excise tax on gasoline is 7.5 cents per gallon, the state sales tax is 4 percent of the price in dollars, and in most places there are also local sales taxes of 3 or 4 percent. Of the state's 4 pennies in fuel sales tax, only 3 cents go to transportation, while the other penny goes to the state's general fund.
The bill would replace this mix with excise taxes starting at 29.2 cents per gallon on gasoline and 33 cents per gallon on diesel. But local governments would not have a part in these taxes, which would go to the state exclusively for transportation.
Burns noted that the 29.2 cents is based on a multi-year average of the current revenue. Consumption rates are more stable than gas prices, he said, so shifting from a per-dollar to a per-gallon tax should stabilize the funding available for road projects.
"This will bring a consistency to the process so that DOT can do a better job of planning and implementation of a long-range plan and better serve us as citizens in making road improvements and resurfacing," Burns said.
Local tax effects
Local sales taxes would continue to be collected on other goods, just not on gasoline and diesel.
Under the bill's original wording, cities, counties and school boards could make up for the diminished sales taxes by creating additional fuel excise taxes of up to 6 cents per gallon. For the first 3 cents, a local board could enact the tax as an ordinance. For the second 3 cents, a referendum of local voters would have been required.
The shift of local sales taxes to state transportation needs became the root of objections like those voiced by Bulloch County Manager Tom Couch in an interview last week.
"The way it was introduced, it's a total distortion. The way they're doing it, it is a state tax increase," Couch said.
He noted that the bill would make future adjustments in the excise tax automatic based on national inflation and fuel economy indexes and impose a registration fee on alternative-fuel vehicles. But Couch's biggest concern is with the effect on existing local revenue.
"They're shifting the burden to local governments to create their own state excise taxes, and we're put in a position if we want to come whole, per se, we would have to increase it not once, but twice, by ordinance and referendum," Couch said.
In Bulloch County, the bill would eliminate the motor fuel portion of two local taxes when they expire in three to four years. One is the 1 percent Special Purpose Local Option Sales Tax shared by the county and cities.
On this tax, with annual revenue exceeding $10 million, exempting fuels would reduce the total by about $1.3 million. Motor fuel sales also contribute about $1.3 million annually to the 1 percent SPLOST the school system uses for building projects and other capital spending.
But in both cases, the revenue could be replaced by a local excise tax. A move to make the excise taxes easier to enact is one of the changes to the bill now being considered.
City and schools
Statesboro City Manager Robert Cheshire said he applauds the legislature for trying to do something about transportation funding. But a resolution has been proposed for Tuesday's City Council agenda.
"We're putting a resolution on the next council meeting to oppose the changing of any local taxes that would take some of our discretion out of it, or if it lessened the amount that we have locally, because we already struggle enough when it comes to transportation projects," Cheshire said.
He added that he is watching closely, aware that changes are in the works.
Bulloch County has a third 1 penny of local sales tax. Here, the basic Local Option Sales Tax is devoted to operating costs of the school system. In most counties, this tax is instead shared by cities and counties, who renegotiate their shares after each 10-year census.
But the school system's operating LOST appears not to expire, local officials say, and the bill refers only to fuels no longer being subject to sales taxes when they expire and are renewed.
Bulloch County Schools Superintendent Charles Wilson said he appreciates the thinking behind the bill.
"If what they're doing is straightening up the funding processes and trying to directly channel it back to transportation, I understand that and I respect that," Wilson said. "I think that's really got a lot of insight, vision to it."
Wilson admitted that his views might change if the school system's operating tax were affected. But as long as only future SPLOSTs for capital projects are reduced, the school system has three years to plan, he noted.
"With the fact that we're being told ahead of time, and it's not affecting the current SPLOST and the fact that we can then plan accordingly, we can deal with that in proper stride," he said.
Bill changing this week
Burns said he encouraged local officials to make their views — and possible solutions — known.
"This is the first actual legislation that has been presented, and I think the author as well as any of us that support it appreciate that this is a starting point," he said, "and there are some things in there that we know have to be worked on."
Burns' subcommittee held a second hearing on the bill Monday. One of the groups that members heard from was the Association County Commissioners of Georgia.
ACCG Communications Director Beth Brown, in a phone interview Tuesday, said that several changes "that provide a little more flexibility to local governments" were made in the legislation. One of these would allow the full 6 cents in local excise taxes to be enacted as an ordinance, without a referendum. However, the revenue must go to local transportation spending.
"We support the changes that were made," Brown said. "We're not saying outright that we support the legislation, because of course you recognize through the next steps of the process it's likely to change again."