Georgia hikes gas tax

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Georgia is increasing the amount of money drivers in the state will have to pay at the pump to help pay for transportation projects, Atlanta television station WSB reports

The Georgia General Assembly has approved legislation to increase the state’s gas tax to 26 cents per gallon starting July 1, according to the report. The measure would replace an existing 19-cents-per-gallon sales tax with a fuel levy that would be dedicated solely to transportation projects. 

The additional money for Georgia road projects will be collected on top of an 18.4-cents-per-gallon federal gas tax that is charged to all drivers in the nation’s to fill the federal government’s transportation funding coffers. 

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The American Petroleum Institute says the gas tax increase will keep the total amount of money that drivers in Georgia are charged at the pump to more than 46 cents per gallon because it will be offset by the elimination of other excise taxes. 

Georgia is the latest in a series of states to increase their local gas tax in recent years as federal transportation funding has dried up.  

Lawmakers are currently facing a May 31 deadline for the expiration of federal transportation funding and they are struggling to come up with a way to pay for an extension of the measure. 

Transportation advocates in Washington have pointed to the willingness of Republican states like Georgia to raise their own gas tax as evidence that a hike in the national levy would be politically palatable this year. 

Conservative groups in Washington have made clear that they would consider an increase in the federal fuel levy a tax hike, however.

The gas tax has been the main source of transportation funding for decades, but it has not been increased since 1993, sapping its buying power.

While the tax hike has backing from business associations and unions, opposition from conservative groups such as Heritage Action and the Club for Growth has caused GOP leaders in the House to suggest it is a non-starter.

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax will only bring in $34 billion annually without an increase.