Georgia governor to sign bill that ties gas tax to fuel-efficiency gains

Georgia Gov. Nathan Deal said he will sign legislation enacting an estimated $900 million transportation funding bill that includes higher gas taxes.

Georgia will be the first state in the nation to tie its gas tax rate to fuel-efficiency gains, according to Carl Davis, senior policy analyst at the Institute on Taxation and Economic Policy.

The governor noted the state’s gas tax has stayed the same since the early 1970s. “Over that period of time, with inflation and the significant increase in fuel-efficiency, drivers are paying significantly less per mile traveled,” he said in a written statement. “We not only lacked the resources for new transportation projects, but had also reached the point where we couldn’t afford to maintain the roads and bridges we already have."

Under the bill, the state portion of the gas tax will rise by 6.7 cents on July 1. Until 2018, the rate will rise each subsequent July based on growth in both vehicle fuel-efficiency and inflation, after which point the inflation factor will be dropped and the rate will be determined based on fuel-efficiency changes alone.