Presentation to the Joint Study committee on Critical ...
PRESENTATION TO THE JOINT STUDY COMMITTEE ON CRITICAL TRANSPORTATION INFRASTRUCTURE FUNDING Trucking in Georgia: Big Numbers, Big Impact October 1, 2015 TRUCKING IN GEORGIA: BIG NUMBERS, BIG IMPACT 85% 76% 213,000 $773,000,000 1,764,682,30 0 38%
MANUFACTURED FREIGHT MOVED IN GEORGIA 85% Rail Intermodal Truck Air Water Inbound 23,914,889 1,072,321 135,135,27
More than 19,000,000 truck trips delivering freight through Georgia and to 100% of Georgia communities, 76% of which are served only by truck. Source: American Transportation Research Institute 76% FUTURE FREIGHT DISTRIBUTION Source: American Transportation Research Institute PORTS, FREIGHT MOVEMENT, AND ECONOMIC COMPETITIVENESS SAVANNAH 500 TRUCK SAMPLE AT 24 HOURS SAME 500 TRUCKS AFTER 7 DAYS 38% FUEL TAX RATES
Comparative State Fuel Tax Rates (cents per gallon) 50 GA ranks 18th 45 40 35 Cents 30 25 20 15 10 5 0 NY CT
I M IL W A W V RI PA OR N M
KY NE Excise Tax Source: American Petroleum Institute ID UT D M Other Tax DE CO AR
AL TX NH NM O M SC W Y State & Local Taxation of OnHighway Gasoline & Diesel Fuel in Georgia THREE COMPONENTS
Excise Tax Prepaid State Tax $0.075 per Gallon (fixed) 4% of Average Retail Price (less taxes) 3% - motor fuel tax - DOT 1% - state sales tax (general fund) (variable) Revised Jan1 and July 1 each year interim revision if price changes by 25% STATE TAXES Prepaid Local Tax Use same sales price as Prepaid State Tax applied to local county rates
Revised Jan1 and July 1 each year interim revision if price changes by 25% LOCAL TAXES BUT IN FUEL TAXES GOING TO TRANSPORTATION Comparative State Fuel Tax Rates (cents per gallon) X Only half of the sales tax on fuel is dedicated to transportation. GA ranks 18th 50 GA actually ranks 47th 45
40 35 Cents 30 25 20 15 10 5 0 NY CT I M IL W
A W V RI PA Source: American Petroleum Institute OR N M KY NE
Other Tax ID UT D M Excise Tax DE CO AR AL TX NH
NM O M SC W Y DIVERSION: ALSO BIG NUMBERS, BIG IMPACT Diversion generally costs the state more than $500,000,000 in road taxes a year (1% of state sales tax and 2% to 4% in local taxes) Georgia tax laws create an even more onerous and wasteful system for interstate trucking Hurts trucking companies of all types, fuel resellers and states citizens
THE IFTA ISSUE Cars pay tax where they purchase fuel Trucks pay tax where they operate Georgia signed into International Fuel Tax Agreement decades ago but never changed tax system to meet requirements Truck operators buying in Georgia pay effectively the highest tax in the nation, but state gets no benefit THE IFTA ISSUE (CONT.) Truck operator buys 1,000 gallons in South Carolina Uses 500 gallons in SC and 500 gallons in Georgia Reports usage to SC; receives a credit for all taxes paid in SC but due in GA SC sends a check to GA BUT IT DOESNT WORK THE OTHER WAY Truck operator buys 1,000 gallons in Georgia Uses 500 gallons in SC and 500 gallons in GA
Reports usage to GA; receives credit only for state taxes paid (not local). Trucker has to write additional check to pay the difference to SC THE IFTA ISSUE (CONT.) Results of this system? Truckers avoid buying in GA if possible Drivers penalized for GA purchases Businesses Avoid Georgia Some fuel retailers have publicly vowed no expansion in GA until this practice changes Georgia fuel resellers, convenience stores and employees lose Sales in GA lower than nearby stores on other side of borders THE IFTA ISSUE
(CONT.) Georgia is the only state in the nation with this issue but it can be fixed and it will produce increased revenue if fixed Solution(s) A. Make all taxes on Diesel excise tax only (cents per gallon) or B. Make all sales taxes collected on Diesel state sales tax (not local) Then distribute to local governments net due after IFTA debits and credits FIX DIVERSION AND DONT GIVE UP ON FUEL TAX Return fuel tax to true user fee raises money before any tax increase Diesel is in for the long haul (energy density, ease of handling, safety, etc.) Gasoline wont go to zero Most alternative fuels can be taxes on
an energy-equivalent basis FIX DIVERSION AND DONT GIVE UP ON FUEL TAX Electric vehicles can be taxed on a subscription basis (license fees) Consultant touted Silver bullets such as VMT or tolling have real negatives -far less efficient than fuel tax -suffer from lower use just as fuel tax (ITR just went bankrupt) -data and privacy issues fuel tax doesnt have -evasion issues CONCLUSIONS Diversion is major issue that costs both money and credibility It has real and negative impacts Solving it will raise more money without increasing user fees The trucking industry; which employs Georgians is ready to help and is a vital part of Georgias future growth
Thank you for your time and your consideration Questions ? PRESENTATION TO THE JOINT STUDY COMMITTEE ON CRITICAL TRANSPORTATION INFRASTRUCTURE FUNDING Thank You Edward Crowell [email protected]
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