Several Republican candidates, including candidates for governor and lieutenant governor, are using their opponents’ support for 2015’s HB 170 to assert their own “conservative” credentials.
They’re calling the transportation funding bill that changed a 40-year-old gas tax formula the largest tax increase in Georgia history and/or a billion-dollar tax increase.
They’re wrong on their facts. They’re also wrong on their politics.
In 1988, the Georgia General Assembly raised the state sales tax rate from 3 percent to 4 percent. That raised the amount of sales taxes paid to the state by one third. The state’s revenues increased from $5 billion to $6.5 billion, an 18 percent increase year over year.
In both nominal dollar amount and percentage of Georgia’s budget, the 1988 bill is the largest tax increase in history. These candidates actually know this. They’re just hoping you don’t.
Furthermore, the “billion-dollar tax increase” wasn’t one. The fiscal note prepared by the Governor’s Office of Planning And Budget for the bill noted it would raise $870 million additional revenue per year for GDOT. Not all of this money was new revenue created by replacing the Nixon-era formula.
For those saying that the state should have looked at existing revenues before raising new funds, they did. They moved the “fourth penny” to GDOT for an estimated $180 million per year. This was an amount created with the 1988 tax bill but deemed a sales tax on gasoline and not a motor fuels tax.
This allowed the state to avoid remitting this tax on gasoline to the Department of Transportation, as is mandated in the State’s Constitution. HB 170 fixed that, as part of the $870 million.
Others are saying we should have taken the money out of future budget surpluses. The 2015 legislature did that, providing $100 million in bond funding for road and bridge repair and additional bond funding for transit.
The Legislature also closed some loopholes and tax incentives, including the one that paid $5,000 to each Georgian who purchased an electric car. That wasn’t a tax increase, that was “stopping the state from picking winners and losers” – something each of these candidates claim to support.
The result of the bill is that the change from the old variable formula to the new fixed excise tax is that the state ended up charging 6.7 cents per gallon more in gasoline taxes. Most Georgians didn’t notice. The bill also added a $5 per night charge to hotel bills within the state. Most of these taxes are paid by non-Georgians. It also hasn’t hurt the hotel business, as the state has seen increases in room occupancy since the bill has passed.
HB 170 created new taxes and fees of about $576 million out of the roughly billion in increased revenue sent to GDOT. That’s not the same as a “billion-dollar tax increase”, and nowhere near the largest in history.
That sets the facts of the matter straight, but what about the politics?
At the recent bill signing for Atlanta’s transit overhaul, Gov. Deal suggested that it would ultimately be as significant as 2015’s HB 170. Gov. Deal clearly isn’t backing away from his signature infrastructure legislation.
Also, Gov. Deal has just finished his last legislative session with an approval rating of 85 percent, according to Atlanta media. He, and his legislative accomplishments, are popular with Georgians. A recent UGA poll also cited 64 percent of voters are satisfied with the direction of the state.
Not surprisingly, most of the Republican candidates that have chosen to run against the accomplishments of the past eight years are having difficulty showing strong poll numbers.
When the votes of the Republican primary are counted on May 22, we’ll likely see most of those who decided to pander to an “angry electorate” surprised that at least with respect to tough votes taken over the past eight years, the electorate isn’t that angry at all.
Charlie Harper, a Fayette County native, is the publisher of GeorgiaPol.com and the executive director of PolicyBEST, an Atlanta-based pro-business advocacy group.