Alabama bills pursue revenue boost for roads and bridges

By Keith Goble, Land Line state legislative editor | 4/21/2016

Alabama state lawmakers have approved a bill to ensure that money from any state fuel tax rate increases would be routed to roads and bridges.

The state’s House voted 90-3 to advance a bill to Gov. Robert Bentley, which would establish the Alabama Transportation Safety Fund. The fund would specify how the available money would be spent.

Senate lawmakers already approved the new funding formula for roads and bridges clearing the way for the bill to advance to the governor’s desk.

Sponsored by Sen. Gerald Dial, R-Lineville, SB180 would designate revenues for “maintenance, improvement, replacement, and construction” of state, county, and municipal roadways.

The first $32 million in transportation revenues collected from a new tax or revenue measure would be divided equally among the state’s 67 counties. Another $500,000 each year would be sent to county commissions for road and bridge work.

Supporters have touted the need for the revenue protection while another piece of legislation still active at the statehouse calls for truckers and others fueling in Alabama to pay more than what they are used to paying in state fuel taxes.

Alabama now charges 19 cents per gallon on diesel purchases and 18 cents on gas. The tax rates have remained unchanged for nearly one-quarter century.

One bill still in the state’s House would raise the tax rates to help pay for improvements to the state’s transportation infrastructure

Awaiting a House floor vote, HB394 would raise the tax rates based on an average of the existing state rates in Florida, Georgia, Mississippi and Tennessee. Specifically, the tax rates in Alabama would increase by 6 cents per gallon to 25 cents and 24 cents respectively.

Sponsored by Rep. Mac McCutcheon, R-Huntsville, the bill includes adjustments in 2019, 2023 and 2027. The fuel tax rate increases would be based on the average of Alabama’s neighboring states.

Alabama’s state fuel taxes accounted for $414 million in revenue a year ago. The revenue is split between the state Department of Transportation and counties.

According to a state fiscal note, the bill would initially raise revenues by $160 million and grow to $192 million annually by 2018.

HB394 would also permit local governments to pursue local fuel tax rate increases of up to 2 cents per gallon, but only after a voter referendum.

The Republican governor has said he is in favor of a tax increase and that he believes residents around the state are willing to pay extra as long as they are assured the money will be used for better roads and bridges.

However, not all Republicans at the GOP-led statehouse are on board with a fuel tax increase. A group of lawmakers have taken to social media to get their message out.

Rep. Will Ainsworth, R-Guntersville, said no one argues the importance of infrastructure spending in Alabama. However, “before we can look at (raising taxes) we need to cut waste, reduce the size of government, and look at best practices in other states.”

The same concerns can be found on the Senate side of the capitol.

“Why should we raise the Alabama gas tax when we already transfer $63.5 million away from the Alabama Department of Transportation to support other government services?” Sen. Paul Sanford, R-Huntsville, asked in a video message.

Sen. Phil Williams, R-Gadsden, called a tax increase a “cheap way out” for politicians. Instead, he said the state needs to change how tax revenue is spent and distributed.

Time is running out for the bill to make its way to the governor’s desk. The Legislature is expected to adjourn for the year in the coming days and the bill still must clear floor votes in both chambers.

One more bill of note would route to roads 40 percent of the state’s $1 billion settlement with BP following a 2010 oil spill in the Gulf of Mexico.

Mobile and Baldwin counties would receive about $260 million. Another $230 million would be sent to the state DOT for road projects.

The bill, SB267, is in the House Ways and Means Committee. Senate lawmakers have already approved it.

To view other legislative activities of interest for Alabama, click here.

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