presentation to the joint study committee on critical transportation infrastructure funding trucking...
TRANSCRIPT
PRESENTATION TO THE JOINT STUDY COMMITTEE ON CRITICAL TRANSPORTATION
INFRASTRUCTURE FUNDING
Trucking in Georgia:Big Numbers, Big Impact
October 1, 2015
MANUFACTURED FREIGHT MOVED IN GEORGIA
Rail Intermodal Truck Air Water
Inbound 23,914,889 1,072,321 135,135,279
385,728 1,129,210
Outbound 18,865,376 820,296 129,759,569
18,841 615,600
Total 42,780,265 1,892,616 264,894,848
404,569 1,744,811
Modal Share 13.7% 0.6% 84.9% 0.13% 0.6
Source: American Transportation Research Institute
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.
85%
76%
FUEL TAX RATES
Source: American Petroleum Institute
GA ranks 18th
NY CT MI ILW
A WV RI
PA ORMN KY NE ID UT
MD DE CO AR AL TX NH NM MO SC WY
0
5
10
15
20
25
30
35
40
45
50
Comparative State Fuel Tax Rates (cents per gallon)
Excise Tax Other Tax
Cent
s
38%
State & Local Taxation of On-Highway Gasoline & Diesel Fuel in Georgia
THREE COMPONENTS
Excise Tax Prepaid State Tax Prepaid Local Tax
$0.075 per Gallon 4% of Average Retail Price (less taxes) Use same sales price as Prepaid State Tax(fixed) 3% - motor fuel tax - DOT applied to local county rates
1% - state sales tax (general fund) (variable) Revised Jan1 and July 1 each year Revised Jan1 and July 1 each year interim revision if price changes by 25% interim revision if price changes by 25%
STATE TAXES LOCAL TAXES
REMITTED VIA
MOTOR FUEL
RETURN REMITTED VIA SALES TAX RETURN
GA ranks 18th
BUT IN FUEL TAXES GOING TO TRANSPORTATION…
NY CT MI ILW
A WV RI
PA ORMN KY NE ID UT
MD DE CO AR AL TX NH NM MO SC WY
0
5
10
15
20
25
30
35
40
45
50
Comparative State Fuel Tax Rates (cents per gallon)
Excise Tax Other Tax
Cent
s
X
Source: American Petroleum Institute
GA actually ranks 47th
Only half of the sales tax on fuel is dedicated to transportation.
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 state’s citizens
DIVERSION:ALSO BIG NUMBERS, BIG IMPACT
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
Truck operator buys 1,000 gallons in South CarolinaUses 500 gallons in SC and 500 gallons in GeorgiaReports usage to SC; receives a credit for all taxes paid in SC but due in GASC sends a check to GA
BUT IT DOESN’T WORK THE OTHER WAY
Truck operator buys 1,000 gallons in GeorgiaUses 500 gallons in SC and 500 gallons in GAReports 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)orB. Make all sales taxes collected on Diesel state sales tax (not local)
Then distribute to local governments net due after IFTA debits and credits
THE IFTA ISSUE (CONT.)
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 won’t go to zero
Most alternative fuels can be taxes on an energy-equivalent basis
FIX DIVERSION AND DON’T 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 doesn’t
have-evasion issues
FIX DIVERSION AND DON’T GIVE UP ON FUEL TAX
Diversion is major issue that costs both money and credibilityIt has real and negative impactsSolving 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 Georgia’s future growth
Thank you for your time and your consideration
CONCLUSIONS
PRESENTATION TO THE JOINT STUDY COMMITTEE ON CRITICAL TRANSPORTATION
INFRASTRUCTURE FUNDING
Thank You
Edward [email protected]