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 impact85%213,00076%$773,000,0001,764,682,30038%Manufactured Freight Moved in GeorgiaRailIntermodalTruckAirWaterInbound23,914,8891,072,321135,135,279385,7281,129,210Outbound18,865,376820,296129,759,56918,841615,600Total42,780,2651,892,616264,894,848404,5691,744,811Modal Share13.7%0.6%84.9%0.13%0.6Source: American Transportation Research InstituteMore 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%3Future Freight Distribution

Source: American Transportation Research Institute

4Ports, Freight movement, and Economic Competitiveness

55Savannah500 Truck Sample At 24 Hours

Same 500 Trucks After 7 Days

Fuel Tax RatesSource: American Petroleum InstituteGA ranks 18th38%8State & Local Taxation of On-Highway Gasoline & Diesel Fuel in GeorgiaTHREE COMPONENTSExcise TaxPrepaid State TaxPrepaid Local Tax$0.075 per Gallon4% of Average Retail Price (less taxes)Use same sales price as Prepaid State Tax(fixed)3% - motor fuel tax - DOTapplied to local county rates1% - state sales tax (general fund)(variable)Revised Jan1 and July 1 each yearRevised Jan1 and July 1 each yearinterim revision if price changes by 25%interim revision if price changes by 25%STATE TAXESLOCAL TAXESREMITTED VIA MOTOR FUEL RETURNREMITTED VIA SALES TAX RETURNGA ranks 18thBut In Fuel Taxes Going To TransportationSource: American Petroleum InstituteGA actually ranks 47thOnly half of the sales tax on fuel is dedicated to transportation.10Diversion 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 states citizens

Diversion:Also Big Numbers, Big ImpactCars 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 benefitThe 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 DOESNT 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 loseSales 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)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 wont go to zero

Most alternative fuels can be taxes on an energy-equivalent basisFix Diversion and dont give up on fuel taxElectric 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 doesnt have-evasion issues Fix Diversion and dont give up on fuel taxDiversion 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 Georgias future growth

Thank you for your time and your considerationConclusions

Questions ?Presentation to the Joint Study committee on Critical Transportation Infrastructure Funding

Thank You

Edward Crowelled@gmta.org