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State cuts gas tax 4 cents

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POSTED: January 2, 2009 1:18 p.m.
ATLANTA - Georgians can celebrate a reduction in the state's gasoline tax as they welcome in the New Year. But it will mean less revenue for transportation projects.

The state tax was lowered by 4 cents per gallon to 14.6 cents starting Thursday. Georgia's gas tax is adjusted twice a year based on the average price of gas. When that average price dips - as it has in recent months - the tax goes down as well. Gov. Sonny Perdue rescinded an executive order he issued in June that froze the tax as prices skyrocketed over the summer.

The reduction cuts millions of dollars for the state Department of Transportation, which had a $456 million budget deficit for the fiscal year that ended July 31, according to an audit report in September.

"Our costs are going up and our revenues are declining," DOT spokesman David Spear said Friday. "We're trying to prioritize our projects and do the things that are most needed."

The price at the pump in Georgia is the lowest in four years - an average of $1.45 a gallon for regular unleaded, a figure that hasn't been seen since spring 2004.

The state recalculates the gas tax every six months through a formula based on the average price around Georgia. Perdue suspended the recalculation of the tax over the summer, halting what would have been a 2.9 cent per gallon jump in the tax. Gas prices at the time were soaring to $4 per gallon.

The Department of Revenue estimates the suspension saved motorists $60.4 million through November.

It also marked a drop for the DOT. In November, the last month data is available, total motor fuel taxes were down 7.5 percent, from $88.6 million the previous year to $82.1 million, Spear said.

Spear said the trend began in the summer, when sales taxes started falling with the price of fuel and excise taxes dropped due to people driving less because of the previous sky-high prices.

"That's a good thing on balance," Spear said. "It reduces congestion and air pollution, but it reduces funds for us."

He said the DOT is not complaining because "things are hard all over." But whether considering projects to reduce gridlock in metro Atlanta or widen roads in rural Georgia, "we just have to come up with a more precise list and come up with things that produce more bang for the buck, so to speak."

The DOT budget for this year is about $2.3 billion, with about half coming from federal gas tax revenues and a comparable amount from the state. Spending could be padded by a "few hundred million" in bond sales, Spear said.

Transportation funding is a problem nationwide. With motorists driving less and buying less fuel, the current 18.4 cents a gallon gas tax and 24.4 cents a gallon diesel tax fail to raise enough to keep pace with the cost of road, bridge and transit programs.

In late January, the National Commission on Surface Transportation Infrastructure Financing commission is expected to urge Congress to raise the gas tax by 10 cents a gallon and the diesel fuel tax by 12 to 15 cents a gallon. It also will recommend tying the fuel tax rates to inflation.

In Georgia, a proposal to allow counties to group together and impose a regional sales tax to pay for transportation projects failed to pass in last year's General Assembly by one vote. The Legislature is expected to try to tackle a statewide transportation plan in the session beginning this month.


 

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