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%213,000

76%

$773,000,000

1,764,682,300

38%

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%

FUTURE FREIGHT DISTRIBUTION

Source: American Transportation Research Institute

PORTS, FREIGHT MOVEMENT, AND ECONOMIC COMPETITIVENESS

SAVANNAH500 TRUCK SAMPLE AT 24 HOURS

SAME 500 TRUCKS AFTER 7 DAYS

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

Questions ?

PRESENTATION TO THE JOINT STUDY COMMITTEE ON CRITICAL TRANSPORTATION

INFRASTRUCTURE FUNDING

Thank You

Edward Crowelled@gmta.org