Georgia Governor Stops Gas-Tax Increase

Cites improving economy for another suspension

Georgia Governor Nathan Deal (CSP Daily News / Convenience Stores / Gas Stations)

Georgia Governor Nathan Deal

ATLANTA -- Georgia Governor Nathan Deal has stopped a scheduled increase in the state's gasoline excise tax, which was supposed to have taken effect in July.

Every six months, the Georgia Department of Revenue adjusts the state motor fuel tax against an average of gas prices. With gas prices in Georgia trending upward--from $3.21 per gallon in January to $3.66 per gallon in early June--the motor fuels tax was set to increase in July by 15%. According to state law, however, the governor can suspend collection of a tax until the General Assembly reconvenes--in this case, Jan. 2015. The assembly must then vote to ratify the suspension.

Deal cited the state's stronger economic climate for his decision to suspend the tax increase.

"We're seeing a steady rebound in Georgia's economy, with our unemployment rate going down and state revenues heading up, but Georgians are still paying gas prices that are high by historical standards," Deal said. "To remove this financial burden on Georgia taxpayers and businesses, I signed an executive order suspending the motor fuel tax increase set for next month. This will help cut costs for families and keep us the No. 1 place in the nation for business."

Deal has stopped the gas-tax increase in June for three of his four years in office, according to a report in The Atlanta Business Chronicle.

Georgia has the second-lowest gasoline excise tax in the country at 7.5 cents per gallon (cpg)--Florida has the lowest tax at 4.0 cpg--however, when other taxes and fees are added, Georgia ranks 20th in size of total tax rate at 28.5 cpg, according to the American Petroleum Institute (API). In addition to the excise tax, Georgia levies a 4% tax on the retail price of fuel.

As the federal Highway Trust Fund borders on bankruptcy and transportation projects across the country see their funding imperiled, some have suggested that Georgia take another look at increasing the state gas tax. According to estimates by the Georgia Department of Transportation, the state would need to hike the excise tax by 6 to 7 cpg to fill the hole left by declining federal revenues.