Charlie’s Monday Column: Some Running Against Accomplishment

Charlie’s Courier Herald column for this week:

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% to 4%. 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% 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 last week’s bill signing for Atlanta’s transit overhaul, Governor Deal suggested that it would ultimately be as significant as 2015’s HB 170. Governor Deal clearly isn’t backing away from his signature infrastructure legislation.

Also, Governor Deal has just finished his last legislative session with an approval rating of 85% according to Atlanta media. He, and his legislative accomplishments, are popular with Georgians. A recent UGA poll also cited 64% 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 8 years are having difficulty showing strong poll numbers. When the votes of the Republican primary are counted on May 22nd, 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 8 years, the electorate isn’t that angry at all.

6
Leave a Reply

Please Login to comment
3 Comment threads
3 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
5 Comment authors
bethebalanceDave BearseRaleighEllynnMattMD_actual Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
MattMD_actual
MattMD_actual

What is sad is that is where the moronic MAGAts have taken conservatism. It is like nobody should have to pay for anything in society.

The state needed a way to better fund infrastructure. The bill wasn’t perfect (I still think $5 room tax was a dumb way to raise revenue), I would have favored more of a user-based system. And I own an SUV which swills gas.

Dave Bearse
Dave Bearse

It’s not “was a dumb way”. It is a dumb way.

Ellynn
Ellynn

I had a nice heated debate Monday over dinner with the diehard GOP backer and Trumpter in my world who was going on and on over the huge transit tax hike. I pulled out the phone and let him read this. The tone changes to ‘but, but, but and that’s not what candidate so and so or candidate whoever is running on…

Thanks Charlie for the help.

Raleigh
Raleigh

The $5000 loophole for electric cars wasn’t all and if I remember it correctly it did not come directly out of the state allocation to GDOT . Owners now have to pay $250 each year when they buy their tag’s to pay their portion of the road tax. No matter how you slice it that is a new tax.. Counties did lose a portion of the sales tax which they made up with backdoor tax increases on property owners as they promised to do. I forgot about the bond was that included in the 870 million figure? If not, then… Read more »

Dave Bearse
Dave Bearse

GA 400 tolls were collected by SRTA, the State Road and Tollway Authority, as are tolls currently on I-85 and I-75.

bethebalance
bethebalance

I would say that it’s OK to note any downstream effective local tax increases, although there are many intervening factors between state and local taxation decisions. But I can’t see how you could include any bond issuances as taxation. Not sure which bond issue you’re talking about, but bonds aren’t taxes.