Get your mind around that discrepancy, and you’ll understand why Georgia’s lawmakers are talking about the need to spend more on transportation — and why a lot of Georgians are skeptical.
Georgia’s gasoline-tax rate, compared to other states, fluctuates greatly. In 2009, our rate ranked 49th nationally. The recent high was a ranking of 18th, in 2012.
Why so much variation? Our gas tax has two parts: an excise tax of 7.5 cents per gallon, and a sales tax on the purchase. How high or low that sales tax goes depends heavily on the price of gas.
Even in the relatively high-tax years, our spending on roads and bridges remains comparatively low. That’s because the state Constitution dedicates only three-quarters of the sales tax on fuel to transportation. The so-called fourth penny, worth about $180 million per year these days, disappears into the general budget. The local portion of the sales tax on fuel, which yields more than $500 million, may or may not find its way into county transportation budgets.
So, motorists in Georgia pay as much as $700 million per year in fuel taxes that aren’t actually spent on transportation. That’s about half of the annual shortfall state transportation officials say we face for maintenance and limited additions to road capacity (new lanes and rebuilt interchanges, but no new roads).
That’s the starting point. Without dedicating that level of existing funding to transportation, I see no way for legislators to ask taxpayers for more.
Now, about “more.”
I did some digging into how Georgians’ taxes have changed over time, particularly the gas tax. I found a few interesting facts.
The 3 percent sales tax on gas was added in 1981, so I used that year as my starting point to ensure an equal basis. At that time, according to figures from the Georgia Department of Transportation, all gas-tax revenues represented 0.7 percent of aggregate personal income in the state.
The latest data show that, by 2013, gas-tax revenues came out to less than 0.3 percent of personal income.
Had gas-tax revenues remained 0.7 percent of personal income since 1981, the state would have collected an additional $24.3 billion during that time.
The shortfall for the next 20 years, per GDOT: $29 billion. I was surprised the two figures were so close.
It’s not as if Georgians are paying less in taxes overall. Despite the relative reduction in gas taxes, data from the Tax Foundation show state and local taxes in Georgia ate up 6.4 percent of per capita income in the 1980s, 6.7 percent in the 2000s (there aren’t yet sufficient data for the current decade).
Still, all this does suggest a top state priority has been lagging for about three decades. Legislators shouldn’t try to make up the ground all at once, but an increase in transportation taxes accompanied by reductions elsewhere seems like a route worth mapping out.