Drivers paid hundreds of millions at the pump year after new gas tax

ATLANTA — Low gas prices mean drivers may not have felt it, but Channel 2 Consumer Investigator Jim Strickland calculated they paid hundreds of millions of dollars more in state taxes.

In the last 12 months, Georgia drivers pumped 5 billion gallons of gas and 1.3 billion gallons of diesel. It was the most gasoline pumped since the great recession, and just in time for a huge tax increase on fuel. Strickland asked the state for five years’ worth of Georgia fuel records to drill down on how much this tax cost drivers.

He found it was $480 million more to be exact, and an increase is already coming.

Starting July 1, 2015, the state started collecting a flat 26 cents per gallon on gas, and 29 cents on diesel.  Each was an increase of about 35 percent. Governor Nathen Deal balked at calling it a tax at all. At a news conference last January, he said “it was not a tax increase, it was a user fee.”

“Now that's what I don't understand,” driver Kevin Wilson said as he filled up his work truck, “gas is at an all-time low, but we're still paying a high amount in (tax).”

Georgia’s old gas tax system had relied heavily on gas prices, and the Governor froze the tax in 2014, rather than let it fluctuate wildly with what we paid at the pump.

Dahlonega Senator Steve Gooch chaired the study committee that determined Georgia’s highways were on the road to ruin without an influx of gas cash. He was also the Senate sponsor of the bill that created the new tax.

“We can predict more on how much money we're going to get in based on the sale of gasoline, not on the price of gasoline,” Gooch told Strickland. “We could be facing about a $200 million revenue short fall this year alone.”

The entire state gas tax now goes to transportation, unlike the old tax, which sent 25 percent to the state’s general fund.

Strickland’s figures show total additional road revenue from fuel is more than $670 million in the new tax's first 12 months. All at a time when gas prices at the pump, tax included, are at their lowest summer levels in ten years.

“The timing on this couldn't have been better,” Gooch said.

In the glow of low prices, the higher gas tax drew few gripes among drivers Georgia drivers who spoke with Channel 2.

“Who wants to drive on bad streets?” Chanice Cleveland asked. “I mean, it's going to a good cause, so why not?”

“Sounds good to me, as long as our money is being spent effectively, I’m all for it,” Stefan Ramseur said.

“If you're going to make us pay so much more, let us see where it's going,” Wilson said.

The Georgia Department of Transportation maps out where that money's going, and it’s all over the state. One project, adding a lane to GA 400 in Forsyth County, will cost the state $47 million. Fees on heavy trucks, electric cars, and even a hotel surcharge are adding to the till.

“We're going to spend an extra $800 million a year on road projects in Georgia,” Gooch said.

Not all praise the tax.

Newnan Senator Mike Crane said targeting growth in state revenues solely to roads would have been enough to pay for the work.

“Really, it is a matter of prioritization,” Crane said. “The money's there in a growing economy.”

“So you're telling me you could have provided that level of transportation spending without raising taxes?” Strickland asked.

“Absolutely,” Crane said.

Next year, the tax will be higher. Based on a formula accounting for better gas mileage and higher consumer prices, the tax in January 2017 goes up 5 percent, about 1.3 cents a gallon.

“It's cooked into the brownies,” Crane said of the increase being written into the state law. “Like most Georgians, I’m mad as heck and I’m tired of it, that's why I voted no.”

The additional $670 million dollars going to transportation is in line with the projections state budget officials made before the tax was ever passed. That included an additional 200 million gallons of gas that was taxed the last year, and government vehicles now have to pay the tax on their gas. The overall increase in tax money we paid is nearly 40 percent.

“I think people are going to say I may not like to pay more, but at least I see where my money is going,” Gooch said.

Cox Media Group