Alabama drivers will see a 6-cent state gas tax increase starting Sept. 1, the first increment of the 10-cent hike approved this year by lawmakers and Gov. Kay Ivey.
When fully implemented, the increase will generate about $320 million a year for road and bridge projects. The first five state projects have already been identified, including two in Limestone and Madison counties.
“On top of the state dollars, all 67 counties and every municipality will receive additional revenue to be used for roads and bridges,” Ivey told Alabama Daily News. “The additional dollars from Rebuild Alabama are intended to be spread throughout the state and not just for one particular area or project.”
The tax increase was a priority issue for the Republican-led Legislature this year after other attempts failed in recent years. The state’s 18-cent gas tax has remained unchanged since 1992. Of the 140 state legislators, 111 of them voted for the increase. Money for local road projects was a big incentive for them.
“For years and years, all across the state, we’ve had demand for capacity projects just like what is happening on (U.S.) 82 in Prattville,” Sen. Clyde Chambliss, R-Prattville, said. “And there are projects like that all across the state, so the gas tax is going to be a real help to everyone and people should start seeing improvements all across the state in the coming years.”
Alabama cities and towns will get an additional $26 million a year when the tax is fully implemented. Counties will receive an additional $80 million.
The Projects
The five announced projects include two in the Tennessee Valley.
The first is resurfacing lanes on I-565 from I-65 to County Line Road and adding an additional lane in each direction, making it six lanes.
The second is the expansion of the interchange on I-65 at Tanner, widening Browns Ferry Road, and extended Browns Ferry westward to US Highway 31.
Ivey has said these projects are needed to increase access to the Mazda Toyota assembly plant currently under construction in Limestone County, and to relieve congestion on I-565, which sees nearly 60,000 vehicles traveling on it daily.
The third project will be to expand the right-of-way of McFarland Boulevard (U.S. 82) in Tuscaloosa from State Route 69 to Rice Mine Road.
Ivey said it will provide safer and more efficient travel for that particular section of U.S. 82, which is one of Alabama’s busiest four-lane roads. She also explained that more than 50,000 trips are made daily on the main east-west corridor through Tuscaloosa.
It is a two-phase project, with the right of way acquisition in the first year, and construction beginning in the second year.
Rep. Chris England, D-Tuscaloosa, voted for the gas tax increase because he liked how it would bring a boost to the local and state economy. The tax increase legislation says the new revenue can’t be spent on salaries, equipment or property.
“Your money is going to be used to fix our roads and bridges and improve our infrastructure, period,” England said.
The fourth project will be to widen U.S. 82 in Prattville and to complete the Prattville Bypass.
Ivey said this project has been in the works for more than 60 years and will improve access for loggers traveling to the International Paper plant, as well as ease the work commute for as many as 600 workers from 23 counties in Alabama.
The fifth project is to widen U.S. 411, which will help drivers in Cherokee and Etowah counties. Cherokee County is one of 16 counties in Alabama that currently does not have a four-lane route to an interstate.
Autauga County will receive an additional $1.02 million dollars and Cherokee County will see an additional $750,000 when the full gas tax increase is implemented.
The gas tax legislation includes an annual $200 fee on electric vehicles and a $100 annual fee on hybrid vehicles. The bill also sets aside $11.7 million of the revenue to be used for a bond issue for improvements at the Port of Mobile.
The official start date for these projects has not been released yet but Tony Harris, the government relations manager for ALDOT, said the revenue from the gas tax will need to accumulate first.
Harris said a possible starting date could be mid-summer or early-fall of 2020.
Dissenting Votes
Some lawmakers who voted against the increase were first-time lawmakers and saw that they had to make a difficult choice for their first official vote in the Legislature.
“I had just run a successful campaign on smaller government and less taxes,” said Rep. Jamie Kiel, R-Russellville. “I often make a correlation with how at home, my wife and I have a budget and we must live within our means and that government should operate the same way. I went to Montgomery and the very first vote was to raise taxes. I could not in good conscience vote to do the very thing that I had just run against.”
Rep. Andrew Sorrell, R-Muscle Shoals, said he’s opposed to raising taxes.
“I’m a small-government conservative and a low tax Republican and I didn’t run on the platform of raising taxes so I intend to keep my campaign promises,” he said.
Sen. Larry Stutts, R-Tuscumbia, said he had to vote against the tax raise because of a possible automatic increase in the future.
“I still think that raising taxes should be painful, deliberate and require someone to vote on it,” Stutts said. “So, to have a built-in increase that goes up every two years from now on, with no limit, I think that’s fundamentally wrong.”
What Makes Up Your Gas Price
Alabama’s current 18-cent state gas tax is one of the lowest in the nation. After the full 10-cent increase is fully implemented in 2021, it will then be adjusted up or down with the National Highway Construction Cost Index and could increase up to a penny every two years.
Besides the state tax, you pay a federal tax on gasoline, which is currently 18 cents, and possibly city and county fuel taxes of varying amounts.
Each municipality’s gasoline tax revenue is available to view at the Alabama Department of Revenue.
For example, Decatur and Florence have a local tax of 2 cents. Montgomery has a tax of 7 cents and Mobile has a local tax of 4 cents.
Some of the counties with the highest average gas prices in the state are Wilcox, Clarke and Greene Counties. The counties with the lowest average prices are Cherokee, Etowah and Calhoun.
The current average price of gas for the state is $2.249, while the U.S. national average is $2.602, according to the American Automobile Association.
The joint House and Senate Committee from Transportation is scheduled to meet Oct. 3 where they will likely discuss future plans for the gas tax revenue after the first year.