The Return of the Gas Tax Bill

By Brandon Moseley
Alabama Political Reporter

On Thursday, April 13, 2017, the controversial massive $2.4 billion bond issue to be paid for by three gas tax increases to total 9 cents per gallon on gasoline and diesel fuel faced an onslaught of bipartisan criticism on the floor of the Alabama House of Representatives.

House Bill 487 was sponsored by State Representative Bill Poole (R-Tuscaloosa).

Before the Budget Isolation Resolution could even be passed, House Bill 487 was carried over. Most legislators thought then that it would come back to the floor of the House for more debate, amendments, and changes.

Speaker of the House Mac McCutcheon (R-Monrovia) ended that discussion when he told reporters: “Gas tax is dead. There will be no more gas tax this year.” McCutcheon added that he thought it was unlikely to come back in an election year.

Over the weekend however there were reports that lobbyists working for power special interests have begun phoning legislators to try to get the votes to pass the massive tax increase on the people of Alabama.

On Monday, Senator Paul Sanford (R-Huntsville) said on social media, “Leadership in the Senate is making calls today regarding the “So-Called Dead” gas tax. Get ready for Round 2.”

On Monday, State Representative Arnold Mooney (R-Indian Springs) held a public hearing on the tax admitting to the crowd at the Indian Springs Town hall that he did not know whether it was dead or not dead.

Rep. Mooney said that under the plan the State would get half of the money and the counties would get half of the money. Municipalities would get a percentage of what the counties get based on their population. The bond issue would be paid for with a tax on gasoline and diesel fuel and a tax on alternative fuel vehicles.

Rep. Mooney said that the state Legislative Fiscal Office (LFO) calculated that the interest on the bonds would be between 4.2 percent to 5.0 percent. The $2.4 billion bond issue might not be issued at the same time. 4.25 percent is the rate the first bonds would be issued at; but that could go up to 5.0 in two years. The proposal is for 20 year bonds.

Rep. Mooney said, “We do not have a list of specific projects.”

Rep. Mooney said that we have issued bonds in our State before that ended up in arbitrage. The bonds are tax free bonds. If we issued $2.4 billion in bonds there would be a specific time for that money to be spent or they can become retroactively taxable in the prescribed period of time. That is arbitrage and Mooney expressed concerns that that could happen here.

Rep. Mooney said that some legislators have stated that any bonds should be put to the vote of the people. Mooney said that supporters of the legislation answered that the people would vote them down. Rep. Mooney said that he did not believe that if the projects were properly explained to the people.

Mooney said that the state already has $5.094 billion in outstanding debt.

Dale Elliot with the Indian Springs City Council asked, “Is that amount of money really needed in the State?”

Mooney said that he did not know but there are a number of projects are needed in my county.

Elliot said, “Our infrastructure compares poorly to Georgia and Mississippi.”

Mooney said that the money can not be diverted to things like salaries and equipment. “A number of us have some concerns about the number of ALDOT employees.”

Mooney said that presently the gas tax in Alabama is 16 cents per gallon for gas and 18 cents for diesel. There is also 18 cents federal and some counties have a gas tax.

Mooney said that in 2014 Alabama ranked #7 in the nation in full time state and local government employment. Mooney said that he was concerned about the size of the bureaucracy and that he would like to see Alabama hire people specifically for a project they were working on. When the project is completed no employees remain. Georgia does a lot of that. Mooney also thought all of the projects needed to be bidded.

Rep. Mooney also expressed concerns that the number of cars licensed in Alabama is not going up and believes that this should not be rushed and that he wanted to hear what the people have to say take our time. There are roads and bridges that need to be fixed. “This bill went thru the transportation committee.” Many of us on the general fund committee have concerns that there is not enough revenue to pay for this.

Marsha Sturdham in Valley Brook said, “We have a problem in this State with our infrastructure that makes us vulnerable to losing out on businesses that want to come here.”

Councilman Elliott said that fuel prices are low and did not object to the tax.

Mooney said, We know that there is work going on federally. We do not know what that is going to be.” Rep. Mooney said that the federal infrastructure plan might have a match it may not be the same process that it has been in the past. It could be simply block granted out. Mooney predicted that if Congress did pass President Donald J. Trump’s (R) infrastructure plan that Governor Kay Ivey (R) would call a Special Session.

Republicans in Congress who oppose adding to the debt and Democrats in Congress who refuse to work with President Trump appear to have shut down any progress on the President’s infrastructure plan, so the problem of coming up with matching dollars may not be a problem.

Mooney said, “I have talked with (Congressman) Gary Palmer and his staff and we do not know what is going to happen.”

Rep. Mooney said, “I am much more comfortable with a pay as you go approach, I am very concerned about the bond process. Bonding is already at $5.095 billion and bumping it up is a concern.” “I am not in favor of the bonds.” “$2.4 billion in bonds need to be voted on by the people.”

APR asked: We have been told that all of the road projects would have to be approved by an ATRIP II committee in Montgomery and that the counties and municipalities would have to get approval for what they do from Montgomery?

Rep. Mooney said, “I do not know that for sure. I have been told that.” I heard that conservation on the House floor. I only got through the bill on Wednesday night. I would expect that there would an oversight committee of something like that.

Mooney added that Transportation is paying for ALEA and for the Administrative office of the courts. That is $100 million that comes out of transportation. “That should not be happening.”

APR asked with new technology coming online how confident are you that we will even have internal combustion engines to buy the fuel to pay for these debts with gas tax revenues twenty years from now.

Rep. Mooney said, “We hope that we are all flying around in hovercraft, but we are not the Jetsons just yet.”

The Chair of the Alabama Legislative Watchdogs Ann Eubank said that she was concerned with how adding all of this debt affects our children.

The President of the Republican Women of Shelby County Dawn Ray said that she would prefer paying as you go rather than doing a bond issue. Ray said that Governor Scott Walker (R-Wisconsin) turned a deficit he inherited into a surplus. We should bring in Scot Walker to learn what he did.

Rep. Mooney said that there is a joint committee that is looking at what Scott walker did and looking at what Gov. Brownback did in Kansas that did not work. “What is the difference?” Walker did many things with an industrialized economy that many did not think could be done.

One audience members said that Alabama State government is a poster child for incompetence. “All three heads of the three branches of state government have been removed from office or thrown in jail in the last nine months.’ I don’t think it is too much to ask to see some specifics

Mooney said that he was 1 out of 23 that signed to begin the process to remove this governor from office because he believed that the Governor needed to be investigated and that he understands those concerns.

Mooney said, “I was shocked when the Speaker said that the bill was dead.” Mooney expressed optimism that the bill could be redone to address infrastructure needs and that the bill could be amended.

 

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