DEPARTMENT
OF
AUDITS
AND
ACCOUNTS
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
Russell W.
Hinton
State Auditor
(404) 656-2174
State Auditor
(404) 656-2174
February
4, 2009
Honorable Doug
Stoner
State Senator
State Capitol, Room 121-E
Atlanta, Georgia 30334
SUBJECT: Fiscal Note
State Senator
State Capitol, Room 121-E
Atlanta, Georgia 30334
SUBJECT: Fiscal Note
Senate
Bill (LC 28 4439)
Dear
Senator Stoner:
This
bill would provide an exemption from motor fuel excise taxes for the sale of
motor fuel to public school systems when such fuel is used in operating school
buses and is paid for by the school system.
The
Georgia State University Fiscal Research Center (FRC) provided the following
narrative on the revenue impact of this bill:
The
proposed legislation would allow for a motor fuel excise tax exemption to school
systems operating buses when the fuel is purchased and paid for by the school
system.
In
fiscal year 2007 (September 2006 to September 2007), Georgia Department of
Education’s transportation energy expenditures were $70 million. In
September 2006, the Department of Education faced a motor fuel price of $2.067
per gallon and in September 2007, the motor fuel price increased to $2.506 per
gallon. The average fuel price is $2.287 per gallon and is used to estimate the
total gallons used in FY 2007: 31 million gallons. To forecast motor fuel usage
in the future, FRC assumes that schools will need to expand their bus services
based on the growth of students enrolled at public schools. Enrollment data for
Georgia is collected from the National Center for Education Statistics and
between FY 2003 and FY 2007 the average annual growth in students enrolled at
public schools was 2.16 percent. Using this average growth rate FRC forecasts
future motor fuel usage (gallons) for 2008 through 2012.
The
motor fuel tax rate levied in O.C.G.A. §48-9-3 is $0.075 per gallon;
however O.C.G.A. §48-9-14 levies a second motor fuel tax (prepaid state
tax) at 3 percent of the price of fuel net of the 7.5 cent per gallon tax and is
also subject to the exemptions outlined in O.C.G.A. §48-9-3. Therefore,
public school systems will be exempt from the 3 percent prepaid state
tax.
Effective
February 1, 2009, the 3 percent prepaid state tax rate for diesel fuel is $0.077
per gallon and when combined with the $0.075 per gallon motor fuel excise tax
results in a total tax rate of $0.152 per gallon. FRC assumes that all buses
use diesel fuel and the prepaid motor fuel tax rate for diesel remains at $0.077
per gallon.
Based
on these assumptions, Georgia’s estimated tax revenue loss in 2009 is $4.8
million and increases 2.16 percent annually to $5.2 million in
2012.
|
Georgia
Tax Revenue Loss
|
|||
|
2009
|
2010
|
2011
|
2012
|
|
$4,834,199
|
$4,938,391
|
$5,044,829
|
$5,153,560
|
Sincerely,
/s/ Russell W.
Hinton
State Auditor
State Auditor
/s/ Trey Childress,
Director
Office of Planning and Budget
Office of Planning and Budget
RWH/TC/eb/bb