By Mary Sell and Caroline Beck, Alabama Daily News
Alabama’s more than 400 cities and towns currently share about $22 million a year from the statewide gas tax. They’ll get an additional $26 million a year under a proposed 10-cent-a-gallon increase.
Alabama’s counties now receive a combined $176.5 million; if House Bill 2 becomes law, they’ll receive an additional $80 million.
“It’s enormous,” said Greg Cochran, deputy directory of the Alabama League of Municipalities, about the potential impact of the gas tax.
That local impact was used by proponents to sell Alabama House members on the tax hike that’s expected to general $320 million a year. Representatives passed the bill on an 83-20 vote Friday evening. It moves to the Senate where at least some Republicans say they want changes.
About 66 percent of new revenue will go to the state. But a different distribution formula means municipalities get more of the new money than they do with the current 18-cent tax. Each town and city will get a base amount $14,109, then additional money based on population.
“Some communities don’t receive $14,000 now,” Cochran said. “(The tax increase) will give small communities some money to pool for local projects.”
Birmingham, Huntsville, Montgomery and Mobile would all get more than $1 million in new money.
Rep. Terri Collins, R-Decatur, said more money for local roads, and major roadways in area, was part of the reason for her support of the bill.
The bill dedicates about $11.7 million a year in gas tax revenue to improvements and expansions at the Port of Mobile. The state money would be used to match even more federal dollars.
“Our businesses will benefit from a bigger port,” Collins said.
The infrastructure plan is Gov. Kay Ivey’s No. 1 priority and last week she called a special session of the Legislature in order to fast-track the bill and make it easier to pass.
House Bill 2 also place an annual fee of $200 on electric vehicles and $100 on “plug in” hybrid vehicles.
The increase would be phased in over three years and then in 2023, it could increase or decrease by 1 cent every two years based on construction costs.
That indexing is a dealbreaker for Sen. Larry Stutts, R-Tuscumbia. His district includes portions of the Shoals and Lawrence County.
Sen. Tim Melson, R-Florence, said there are good things in the bill for his district, which includes portions of Lauderdale, Limestone and Madison counties. He said there could be money for the Port of Florence in a final version.
But he doesn’t like the indexing either. He said he understands the argument that without it, the state in 20 years could be in the same position it is now, needing to pass an increase. Still, he doesn’t want to sign off on an open-ended increase.
Stutts also wants a corresponding decrease in another tax on Alabamians.
“I guess my first choice is the grocery tax,” Stutts said.
The conservative Alabama Policy Institute has lobbied for a tax cut elsewhere too.
“It is the poor and middle class that will bear the brunt of the gas tax increase,” said Phil Williams, director of policy at the institute. “Why don’t we offer them a modest reform to offset it and to show them that we care about them in the process?”
Meanwhile, Melson said he doesn’t want to see Education Trust Fund money moved to the General Fund. That transfer isn’t in the gas tax bill, but Ivey has said she planned to fix concerns over about $63 million that’s currently diverted from ALDOT every year to fund other agencies by moving about half that amount from the separate education budget.
Late last month, the Alabama Republican Party passed a resolution opposing any gas tax increase.
Also in the bill are:
An annual allocation of at least $10 million in grants that cities and counties can apply.
It’s for projects that are beyond local governments’ abilities to address, Harris said.
A congestion relief program that will require ALDOT to develop a prioritization plan to allocate funds to increase capacity on crowded state, U.S. and interstate routes. Tony Harris, a spokesman for ALDOT, said I-565 in the Tennessee Valley is an example of a potential project.
An economic development roads program requiring ALDOT to develop a prioritization plan to allocate funds for economic development road projects “with priority give to projects in economically underserved areas.”
“We believe there are about a dozen counties that do not have a four-lane route to an interstate highway,” Harris said. “So we want to address that.”
An annual allocation between $30 million and $50 million for “projects of local interest on the state maintained highway system, which may also include local roads and bridges essential to such projects.”
The bill also says the new revenue can’t be spent on salaries, equipment or property.
This year, ALDOT had total appropriations of about $1.5 billion. About $785 million comes from state revenue; $720 million comes from federal and local sources, according to the Legislative Fiscal Office.
The bill will be in a Senate committee Monday afternoon.
Dollars and cents
Under House Bill 2, the gas tax increase bill, municipalities would receive an additional $26 million, bringing their total to $48.7 million. Counties would receive an additional $80 million, bringing their total to $256.4 million
How much would local counties and the municipalities within them receive under the gas tax increase?
Lauderdale County: $1.38 million
St. Florian: $16,904
Colbert County: $1.02 million
Muscle Shoals: $103,098
Franklin County: $824,040
Phil Campbell: $21,880
Red Bay: $35,486
Lawrence County: $841,061
North Courtland: $18,387
Town Creek: $21,555
Morgan County: $1.62 million
Limestone County: $1.36 million
Madison County: $3.71 million
New Hope: $33,130
Owens Cross Roads: $24,405
Shelby County: $2.41 million
Indian Springs Village: $30,105
Jefferson County: $6.53 million
Center Point: $128,652
County Line: $15,855
Mountain Brook: $152,290
North Johns: $15,090
Pleasant Grove: $82,546
Sylvan Springs: $24,547
Vestavia Hills: $244,488
West Jefferson: $16,397
St. Clair County: $1.32 million
Pell City: $100,045
Walker County: $1.13 million
Carbon Hill: $27,790
Etowah County: $1.47 million
Hokes Bluff: $43,122
Rainbow City: $79,108
Reece City: $18,529
Sardis City: $25,466
Walnut Grove: $18,834
Source: Alabama Department of Transportation, Association of County Commissions of Alabama