Gas Tax increase on the fast track in Montgomery

By Brandon Moseley
Alabama Political Reporter

A number of powerful special interests spoke in favor of House Bill 487, which would raise taxes on the gas and diesel fuel that Alabamians purchase every day to commute to and from work, church, school, and play.

HB487 is sponsored by state Representative Bill Poole (R-Tuscaloosa). Rep. Poole spoke at a public hearing on HB487 in the Transportation, Utilities & Infrastructure Committee.

Rep. Poole told the committee, “This is a very important public policy piece of legislation. I ultimately came to the conclusion that this is the right thing to do for the economy of Alabama.”

Poole said, “We know we are falling behind neighboring states. The American Society of Engineers rate Alabama roads a D+. Over 15 million vehicles a day cross over bridges that are structurally deficient or are functionally obsolete. Driving around these bridges cost schools $2.5 million a year in additional costs to drive around those bridges.”

Rep. Poole said that the fatality rate has doubled on rural roads and claimed that 1 in 3 fatal traffic accidents in the State are due in part to road conditions. Alabama last raised its gas tax in 1992. Fuel efficiency has improved 17.9 percent since 1990. That is a good thing but they are still traveling our roads. Meanwhile the cost of doing roadwork has gone up. Poole said that the State has coupled decreased revenue with increased costs of road construction.

Rep. Poole said that Alabama trails seven other southeastern states in funding for roads. “It is important that we invest in our success. We have a lot of road miles in relative to our peers and yet our funding trails other states.”

Poole said that his bill would also increase the price of a gallon of fuel four cents, effective September 2017, and two more cents, effective Sept 2019. Additionally, it would raise gas prices three cents per gallon, effective Sept 2024. The legislature can opt out of the third tax increase by a joint resolution of the legislature.

The Chairman of the Board of the Alabama Clean Fuels Coalition Phillip Wiedmeyer spokesman said we certainly the bill but not the details of the year tax it places on possessing an alternative fuel vehicle. The owner of a commercial alternative fuel vehicle would have to pay $150 a year under the bill. He said that the Committee needed to give them more time to settle this issue.

Former candidate for Congress Steve Raby was there as a lobbyist representing the City of Huntsville. Raby said that there are problems with the local portions. No municipality in a county can use more than 20 percent of the funding for that county. Montgomery has 90 percent of the residents of Montgomery County. Raby said that while he supports an infrastructure bill that Huntsville, Montgomery, and Birmingham are not being treated fairly in the distribution of the money. “We need to look at a more equitable split. This formula was put together in 1964.” 50 years ago and passing this bill would lock in place for another 25 years.

President and CEO of West Alabama Chamber of Commerce and President of the Alliance for Alabama Infrastructure (AAI) spoke in favor of the proposal. He said that it was a quality of life issue. The process that has gotten here the last few weeks has produced this bill from different proposals. We came together as a broad coalition. Rep. Poole has created a hybrid proposal. All the stakeholders gave a little to get this. This proposal addresses accountability first and foremost, it affects every single county and municipality in the state, and does not just address the needs of the major population centers.

Alabama League of Municipalities spokesman Greg Cochran said that he supports the concept but not locking all the proceeds into this formula which he called totally inadequate.

The spokesman for the Alabama Trucking Association said, “Trucks move 80 percent of the freight in Alabama. We pay more than 40 percent of the roads taxes in this state and we are willing to pay more.”

The Executive director of the Association of County Commissions of Alabama Sonny Brasfield said that he has been here since 1983 and any effort to change the distribution formula has failed. “We need to honor the existing distribution formula.”

David Cole with the Alabama Farmers Federation said that he is here speaking for 350,000 member families and we encourage you to vote yes.

The President and CEO of the powerful Business Council of Alabama (BCA) Billy Canary told the committee: “We have a decision to make. If you vote no what is your plan? We have tried to work in this broad coalition. If not now, then when? There are four things that bring jobs to our state: education and education reform, infrastructure, healthcare and healthcare reform, and right to work.”

The bill would allow the State to sell $2.5 billion in massive new bond debt to be paid through future revenues from the tax increase. Projects would have to be approved by the permanent ATRIP committee. Some inside sources have suggested that it would be dangerous for the State to take on more bond debt given the relative weakness of the economy and more pressing budget weaknesses.

HB487 received a favorable report.

Rep. Will Ainsworth (R-Guntersville) voted against the bill. He told reporters afterwards that he does not think that gas taxes are the proper model for road construction moving forward and that this is a tax on the people of Alabama.

State Senator Paul L Sanford said on Facebook afterwards, “9 cent gas tax on the move in the House. What about the $63mm we transfer away from DOT annually now? Over $400mm transferred away from building roads in order to fund other parts of government in recent years. Any guess on whether it was a voice vote?”

Legislative insiders told The Alabama Political Reporter that this bill is being fast tracked to the House floor on Thursday.

 

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