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 IMPACT

MANUFACTURED FREIGHT MOVED IN GEORGIA RailIntermodalTruck Air Water Inbound23,914,8891,072, ,135, ,7281,129,210 Outbound18,865,376820, ,759,569 18,841615,600 Total 42,780,2651,892, ,894, ,5691,744,811 Modal Share13.7%0.6% 84.9% 0.13%0.6 Source: American Transportation Research Institute More than 19,000,000 truck trips delivering freight through Georgia and to 100% of Georgia communities, 76% of which are served only by truck.

FUTURE FREIGHT DISTRIBUTION Source: American Transportation Research Institute

PORTS, FREIGHT MOVEMENT, AND ECONOMIC COMPETITIVENESS

SAVANNAH 500 TRUCK SAMPLE AT 24 HOURS

SAME 500 TRUCKS AFTER 7 DAYS

FUEL TAX RATES Source: American Petroleum Institute GA ranks 18th

State & Local Taxation of On-Highway Gasoline & Diesel Fuel in Georgia THREE COMPONENTS Excise 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 rates 1% - state sales tax (general fund) (variable) Revised Jan1 and July 1 each year interim revision if price changes by 25% STATE TAXES LOCAL TAXES REMITTED VIA MOTOR FUEL RETURN REMITTED VIA SALES TAX RETURN

GA ranks 18th BUT IN FUEL TAXES GOING TO TRANSPORTATION… Source: American Petroleum Institute GA actually ranks 47th Only half of the sales tax on fuel is dedicated to transportation.

Diversion 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 state’s citizens DIVERSION: ALSO BIG NUMBERS, BIG IMPACT

Cars 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 benefit THE IFTA ISSUE

Truck operator buys 1,000 gallons in South Carolina Uses 500 gallons in SC and 500 gallons in Georgia Reports usage to SC; receives a credit for all taxes paid in SC but due in GA SC sends a check to GA BUT IT DOESN’T WORK THE OTHER WAY Truck operator buys 1,000 gallons in Georgia Uses 500 gallons in SC and 500 gallons in GA Reports 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 lose Sales 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 fixedSolution(s) A.Make all taxes on Diesel excise tax only (cents per gallon) or B. 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 won’t go to zero Most alternative fuels can be taxes on an energy-equivalent basis FIX DIVERSION AND DON’T GIVE UP ON FUEL TAX

Electric 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 doesn’t have -evasion issues FIX DIVERSION AND DON’T GIVE UP ON FUEL TAX

Diversion is major issue that costs both money and credibility It has real and negative impacts Solving 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 Georgia’s future growth Thank you for your time and your consideration CONCLUSIONS

PRESENTATION TO THE JOINT STUDY COMMITTEE ON CRITICAL TRANSPORTATION INFRASTRUCTURE FUNDING Thank You Edward Crowell