With the 2019 Legislative Session less than a month away, and it’s no secret the sessions is expected to be dominated by discussions of how to fund Alabama’s road and infrastructure needs.
One of the big proposals expected to considered this session is the gas tax, which is why on Monday the state’s right-leaning Alabama Policy Institute (API) released it’s tax position paper on said tax.
In the position paper, API lays out their position on the gas tax by first asserting their support for increased investment in Alabama’s infrastructure.
US Supreme Court Justice Oliver Wendell Holmes famously said that “taxes are what we pay for a civilized society.” The Alabama Policy Institute freely acknowledges that infrastructure is neither free nor is it unwanted. No rational voice would debate the need for a strong system of roads, bridges, ports and e-commerce.
API also acknowledges with candor that there is no question that the cost of maintenance and construction of vital infrastructure has increased over time while Alabama’s chief source of state generated infrastructure revenue, the gas tax, has not increased one cent since 1992. But none of these candid admissions should be construed to mean that API suggests that conservatives should propose or accept a bare-bones tax increase as the only solution. The current governing majority must consider how best to govern in this revenue-depleted environment in such a way as to inspire confidence in their constituent consumers. API suggests that such confidence can be generated by considering certain conservative imperatives in the gas tax debate.
The three imperatives for conservative policymakers API is referencing are:
- Taxes should always be the last resort: API believes that government should always look first to the goal of realigning the existing balance between current expenditures and resources before asking for taxpayers to sacrifice more.
- Taxes should never be raised without reforms: API believes that government should always strive to better its processes, increase its transparency, and mitigate waste.
- No tax should ever be raised without an equal decrease in other taxes: API acknowledges that government cannot provide essential services without the revenue to pay for those services. At the same time, however, there is a responsibility to be measured in the collection of revenue from the public.
To further display their imperatives in action, API proffered two examples of “revenue enhancing legislation,” which follow them:
Proposed bill #1
- Would address reform measures that API deems “desperately needed” to stop a siphoning of funds from the current Road and Bridge Fund.
- Stop the practice of rebating gas taxes to organizations that use Alabama roads and bridges.
- Legislatively create an offset to the taxpayers by reducing the state portion of the existing grocery tax. Alabama is one of only seven states nationwide that fully taxes grocery sales, and one of only twelve that taxes groceries at any level.
- Allow for the general public to see where and how infrastructure dollars are spent. The Joint Legislative Transportation Committee should be given the ability to review and approve 5-10 year infrastructure plans that are set by well-reasoned criteria.
Proposed bill #2
According to API, bill number two “represents the long game in infrastructure funding.”
“The public should made aware of the little known fact that Alabama has a trust fund that currently holds in excess of $3.2 billion generated by offshore oil and gas exploration,” explained API. “The Alabama Trust Fund belongs to no one else but the people of this state.”
- Should be an immediate lobbying of the Trump administration to extend the State’s offshore boundaries by an additional 5-10 miles. The extended maritime limits would create additional revenues from oil and gas.
- Revenues from extended limits could then be appropriated, by a vote of the citizens of this State in the form of a constitutional amendment, to fund infrastructure.
“It is possible to be a conservative and still debate an increase in taxes,” API explained.