A taxing change
This article is the sixth in our weeklong series outlining possible tax changes.
Saturday: Cigarette taxes would almost double, moving from 37 cents to 68 cents per pack.
A tax reform council has recommended changing the formula for Georgia's motor fuel tax - the bread and butter of the state's transportation budget.
The state taxes gasoline in two ways: one is a flat 7.5 cents per gallon charge and the other is a 3 percent "prepaid state tax" that the Department of Revenue adjusts every six months based on current gas prices.
"Because this component of the fuel tax is based on the price of gasoline, this causes significant fluctuations in the sole source of state revenues that are dedicated for transportation purposes," the Council on Tax Reform and Fairness for Georgians wrote in its report. "The Tax Council recommends converting the current 3 percent motor fuel tax on gasoline to a cents per gallon rate."
The council suggests this charge in tandem with the current 7.5 cents per gallon rate, adjusting this total rate annually to reflect costs for road construction.
Georgia has one of the lowest gasoline taxes in the nation.
When combined with federal and other sales tax, the total taxes charged on gasoline was 39.2 cents per gallon as of Jan. 1.
According to the American Petroleum Institute, California has the nation's highest gas tax at 66.1 cents per gallon.
Teri Pope, a spokeswoman for the Georgia Department of Transportation, said the department's budget is almost completely dependent on fuel taxes collected at the federal and state level, making Georgia's low tax level troubling.
The last time Georgia's gas tax was increased was in 1971.
"We have grown exponentially since then in population as well as costs of building roads has increased significantly," Pope said.
Pope did not comment on the tax council's proposal but said that overall, the motor fuel tax is not a sustainable funding source for the future of transportation.
"Nationwide the problem with gas tax is our cars are getting more fuel efficient, more miles to the gallon. And people are driving less. They're buying less gas overall," Pope said. "So we're not bringing in as much money from the gas tax because of those two factors."
The 10-member tax council was appointed during the 2010 legislative session by Gov. Sonny Perdue, Lt. Gov. Casey Cagle and House Speaker David Ralston.
The council held six months of public hearings and drafted a report with several recommendations to overhaul of the state's tax code.