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Gas tax increase bill is effectively dead

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

Thursday, April 13, 2017, the Alabama House of Representatives rejected a bill supported by House leadership that would have raised fuel taxes on the people of Alabama by nine cents per gallon in three phases between September 1, 2017 and 2024.

Special interests including: the road builders, the trucking association, the County Commissioners Association, and BCA (the Business Council of Alabama) have been pushing massive new spending on road projects for months. Those efforts finally produced a much delayed bill on Thursday, April 6 in House Bill 487, sponsored by state Representative Bill Poole (R-Tuscaloosa). House Leadership rushed the controversial bill through the Transportation, Utilities, and Infrastructure Committee before the press or the public had a chance to review the legislation. Instead of dealing with the Education Trust Fund budget, the leadership insisted on spending Thursday on this bill. It faced a buzz saw of opposition once on the floor of the House. Eventually it was carried over on the request of the sponsor before the BIR was even voted on.

Speaker of the House Mac McCutcheon (R-Monrovia) told reporters that the unpopular bill will not be resurrected.

State Representative Mack Butler (R-Rainbow City) said on Facebook, “We stood strong and the Gas Tax is dead! Thank you to all my colleagues who didn’t waiver on this. The people have been crystal clear that they want us to rid our State of fraud and waste before even considering another tax.”

State Representative Ed Henry (R-Hartselle) said on Twitter, “Gas tax hits a brick wall today in the House. @GoBillPoole carried his bill over presumably because they didn’t have the votes for passage.”

State Representative Tim Wadsworth (R-Arley) said on Facebook, “I posed a question last night on Gas Tax Bill. I stated I had an opinion and I asked for your opinion. MY OPINION IS NO and YOUR OPINION WAS NO.”

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Wadsworth said that $63 million is transferred from the Alabama Department of Transportation each year to fund ALEA. “That is equivalent to a 2 cent gas tax. Return these funds. In the past, We educated our children to save money and then buy what you need. A 4 cent gas tax generates $123 million. Why are we considering borrowing $2.5 billion dollars to pay back over 20 years. We tell our children to pay as you go. This bill spends all the money now.”

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Rep. Wadsworth said, “The vast majority of people don’t want this tax but they want roads. The public don’t support this bill because they don’t trust government. They honestly have a right not to trust government. The Governor was removed, the speaker was convicted, the Chief Justice of Supreme Court removed. They see Lobbyists in Washington and this State House every day. We have not been transparent enough. We must set an example. It will take a while. But once the public trusts, they will be more accepting.”

Wadsworth said, “The bill is not fiscally sound. If the entire bond issue is done at one time, it would require a payment of $179,336,937 per year. The state could not pay for the bond issue until the second and possibly third tax comes into play. The FY2018 4 cent tax could generate $126,471,256. The FY2018 2 cent tax would generate $63,735,628. The FY2025 3 cent tax would generate $103,718,718.” Rep. Wadsworth added, “Car standards require fuel usage to drop in the future and we don’t know what actual dollars will come in.”

State Representative Isaac Whorton (R-Valley) wrote, “This bill would provide for a 4 cent tax increase in 2017, 2 cent in 2019, and 3 cent automatic increase in 2024 unless there is a joint resolution to remove the 3 cent increase. The bill would authorize the issuance of a total of $2.4 Billion dollars in a bond or a series of bonds to be paid over the next 20 years. Bond rates are about 4.25 percent at this time. The debt service at that rate would be approximately $179 million annually if issued as one bond…if the rates were to increase to 5 percent, the debt service climbs to $191 million. Of course, there are always costs involved in borrowing money and a fair estimate of that cost is around 1 percent of the bond amount.”

Most of the details of the plan and all the expert testimony was shared in Republican Caucus meetings where the press was barred from attending.

This is the second year that BCA’s infrastructure plan failed to even get to a vote on the House floor despite enormous lobbying efforts. BCA President and CEO Billy Canary had personally urged legislators to support this in the committee.

 

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