Estimates are it would take about $500 million to eliminate the tag tax on personal vehicles. There are more than 8 million vehicles taxed each year in Georgia, and most of the revenue goes to counties, cities and schools. A House study committee will review the details of such an idea when it meets this summer. It will recommend whether to cut the tax in one year, phase it out or do nothing.
One thing is certain. If the state eliminates this tax, it must be done in a way that doesn’t harm cities, counties or school boards. To prevent local governments from taking a financial hit, we would reimburse local car tag revenue with state surpluses. That’s exactly what the Legislature did a few years ago when it enacted a homestead exemption on residential property. We used state surpluses to reimburse local governments for the tax credit.
I’m no budget guru, but relying on state surpluses to make up for the losses at the local level concerns me. At some point we’ll again face lean budget times, and those surpluses aren’t going to be there. That being said, I certainly hope the study committee can find a way to make this work – it will make my birthday much more pleasant.