Gas tax increase one step closer to reality, bill clears House committee

Alabama Gas Tax
[Photo Credit: Alabama Today]

Gov. Kay Ivey‘s plan to raise the state’s gas tax by 10 cents as a means to fund infrastructure improvements cleared its first hurdle on Thursday.

The House Transportation, Utilities and Infrastructure Committee approved the legislation by voice vote, which now moves the bill to the full House of Representatives for further consideration.

The full House could vote on the bill as early as Friday.

Ivey’s plan

The state currently imposes a flat excise tax of 18 cents-per-gallon on gas and 19 cents-per-gallon on diesel, without adjusting for inflation and other construction and maintenance costs.

This combined fuel tax revenue generates 80 percent of Alabama’s transportation funding. The plan’s 10-cent increase will be phased in over the next three years.

New revenue generated by the increase will be dispersed between state, county, and municipal governments in Alabama. According to Ivey, these funds are to be used for transportation infrastructure improvement, preservation and maintenance projects. A separate portion of the revenues will go to pay a bond to be issued to finance improvements to the ship channel providing access to the facilities of the Alabama State Docks.

“My Rebuild Alabama Infrastructure Plan is a comprehensive approach to a glaring issue affecting citizens in every corner of the state,” Ivey said announcing her plan last week. “After 27 years of stagnation, adequate funding is imperative to fixing our many roads and bridges in dire need of repair. By increasing our investment in infrastructure, we are also making a direct investment in public safety, economic development, and the prosperity of our state.”