10-cent gas tax increase signed into law

March 15, 2019 chris
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By Sarrah Peters, News Editor

On Tuesday, March 12, Governor Kay Ivey signed the proposed 10-cent gas tax raise into law after the bill passed in the state House and Senate.

The current tax is 18 cents a gallon for gasoline and 19 cents a gallon for diesel. This bill will incrementally increase the tax over three years, with the first raise of 6 cents taking place on August 31 of this year. The gas tax will rise another two cents on October 1, 2020 and two more cents on October 1, 2021.

While legislators overwhelmingly supported the bill, others expressed concern about how fast the bill was passed without considering other options first.

“It was disturbing that they slammed this down the people’s throat without a vote on the lottery,” said former state representative Craig Ford. “We need a vote on the lottery before we pass this tax. Why not a voluntary tax instead of one forced on the people?”

The bill will impose additional fines on economically-friendly vehicles, with the purpose of taxing those that use less gas for use of the roads. Ford expressed that it was unfair that environmentally conscious people be penalized.

The State Senate passed the bill with a vote of 28-6. Local District 10 Senator Andrew Jones voted for the bill but could not be reached for comment.

The tax is estimated to produce around $320 million dollars in revenue, which will be dedicated to infrastructure improvement projects. About $12 million dollars of the funds will be dedicated to improve the shipping channel at Mobile Bay port. District 28 State Representative Gil Isbell said that the Mobile port handles exports for businesses throughout the state of Alabama, so this project will benefit industry for all Alabamians.

“Because U.S. Senator Richard Shelby is Chairman of the Appropriations Committee in Washington, he has successfully secured a 75 percent match for some of our projects bringing in billions of dollars,” said Nordgren. “One of the major projects is increasing our port of Mobile that will make it the largest in the Gulf and the fourth largest in the nation. These port improvements will also allow our poultry and timber producers from Northeast Alabama to ship directly overseas. This will also allow super tankers in our ports that carry oil and the easier and quicker shipping arrangement is projected to lower the cost of fuel thus reducing any negativity from a gas tax.”

The remaining revenue will be divided, with the Alabama Department of Transportation (ALDOT) receiving about two-thirds of the money to be spent on infrastructure projects only, not overhead. Isbell said that the law would allow the ALDOT to bid out projects, in the hopes of reducing costs further.

“In addition, almost everyone has complained about accountability as it pertains to ALDOT and the first bill, HB1 provides the very best accountability we’ve ever had with separate accounts, auditing, annual reporting and mandatory annual plan,” said Nordgren. “We can see who gets the money, how much, what projects get done, what doesn’t, no waste, no abuse, no fraud, only roads and bridges funded, no administration all open to the public and inspected by the Joint Transportation Committee.”

However, Ford remained concerned that the ALDOT-controlled revenue would not be fairly distributed.

Counties will receive about 25 percent of the remaining funds, and municipalities will receive about 8 percent. On Tuesday, March 12, the Etowah County Commission voiced its support of the bill.

Ford said that this would not be very beneficial locally because there are “not enough pieces to go around.”

Isbell, Nordgren and State Rep. Craig Lipscomb, District 30, voted for the bill. The bill passed in the House with a vote of 84-20.

Nordgren cited overwhelming support from the business community as one of the reasons she decided to support this bill, despite her reluctance to raise taxes.

“Every major industry supports this, including the Business Council of Alabama, The Farmers Federation, all chambers of commerce, county commissions, municipalities, retail associations, Clean Water and most of all, the Truckers Association, even though the truckers pay 43 percent of our gas tax revenue,” said Nordgren. “No one wants to increase taxes of any kind! However, Alabama ranks 50th in the nation for tax revenue, meaning our state has the lowest state taxes in the nation. Even with the passage of this gas tax, we will still rank as the lowest taxed state in the nation. In addition, the projected increase per vehicle is around fiver dollars per month or $1.25 per week.”

Ford said that the gas tax would cause businesses to raise prices on their goods and services.

“Businesses are going to pay more for tax, and it’s not going to come out of their bottom line,” said Ford. “It’s going to be passed on to the consumer and the citizen.”

Nordgren said that while the government has been successful in reducing costs, more revenue was still needed.

“For over the last eight years we have been tackling our infrastructure problem. We have exhausted all avenues to increase dollars for our infrastructure, and although we have increased economic development while we have reduced state government by 15 percent, we still have more cars on the road, yielding the state less tax dollars due to more efficient gas mileage vehicles.

“Over the last eight years, we have reformed the state’s pension system saving 345.6 million dollars annually and reformed the number of state employees, saving 160.7 million dollars per year. We repealed the drop program, saving 58.5 million dollars per year. We have refinanced bonds, saving 20.4 million dollars per year, and much more. There isn’t much, if any, more ‘fat’ to cut, so we are looking for a solution.”

Isbell said that good roads are necessary for the state to grow its industry and will help the state in the future. Nordgren echoed his statements.

“Government is tasked with infrastructure; this is our responsibility,” said Nordgren. “Keeping our roads safe, ready for economic development and opportunities is our responsibility.  Our roads are one of our most valuable assets. Republicans have cut waste for eight years. We promise that we also want and demand transparency and accountability. I am taking all facts into consideration as well as comments from my constituents.”

Ford said that legislators need to get to work if they hope to show the supposed benefits of this gas tax hike by the next election.

“They better start moving dirt fast! The election is in 2022 and we know how long it takes to build highways.”