A new video from PolicyBEST tries to explain how transportation, especially roads and bridges, is funded in Georgia. Breaking down how the tax money Georgians pay for motor fuel is spent is important as the legislature considers House Bill 170, the Transportation Funding Act.
The video explains how 40% of the excise and sales taxes collected at the pump is spent on non-transportation related purposes. While the state collects a 7.5 cent per gallon excise tax and a 3% sales tax, totalling around 16.3 cents per gallon, the fourth percent of sales tax, or fourth penny, and local LOST and SPLOST taxes account for 11.2 cents per gallon.
When you add in the federal excise tax of 18.4 cents per gallon, Georgians pay 45.90 cents per gallon of gas, compared to the U.S. average of 48.29 cents per gallon. At the surface, Georgia’s tax is less than neighboring states Florida and North Carolina, and more than Tennessee, Alabama and South Carolina. But, when you take out the money not spent for transportation purposes, the effective rate of 34.70 cents per gallon is lower than Tennessee’s 39.80, Alabama’s 39.27, and South Carolina’s 35.15 cents per gallon.
The $1 billion actually raised by the state excise and sales taxes is supplemented by $1.2 billion from the federal Highway Trust Fund. The $2.2 billion the state spends on roads and bridges is far less than Florida’s $5.1 billion and North Carolina’s $4.3 billion. And while per-capita highway spending in the United States is $491, in Georgia it’s $296, making the Peach State dead last in the amount we fund surface transportation.