DALLAS – Alabama would link its gasoline tax rate to the average fuel levy of surrounding states under a bill adopted Thursday by the state House Transportation, Utilities and Infrastructure Committee.
The measure, HB 394, would raise the state gasoline and diesel taxes on Oct. 1 by the difference between Alabama's fuel taxes and the average of fuel taxes in Mississippi, Tennessee, Georgia, and Florida. The state gasoline and diesel tax rates would be adjusted to the regional averages again in 2019, 2023, and 2027, although the Legislature could veto any change.
The bill, which is sponsored by Rep. Mac McCutcheon, a Republican from Huntsville, is expected to be considered by the full House in early April following the Legislature's Easter recess.
The legislative session is set to expire on May 16. Republicans hold 26 of the 35 seats in the Senate and 72 of the 105 House seats.
Alabama's gasoline tax of 18 cents per gallon and the diesel tax of 19 cents per gallon would both go up by about 6 cents in October if the bill becomes law, said McCutcheon, who is vice chairman of the Legislature's Joint Transportation Committee.
Florida's gasoline tax totals 32.6 cents per gallon, with levies of 18.8 cents in Mississippi, 21.4 cents in Tennessee, and 31 cents in Georgia. Diesel taxes in the region include 34.7 cents per gallon in Georgia, 33.7 cents in Florida, and 18.4 cents in both Mississippi and Tennessee.
State taxes and fees bring Alabama's total fuel levy to 20.9 cents per gallon of gasoline and 21.9 cents of diesel, according to the American Petroleum Institute.
The state gasoline tax rate has not gone up since 1992 and no longer provides enough revenue to meet the Alabama's infrastructure needs, he said.
"We are facing issues with our infrastructure that will become a crisis if we don't do something," McCutcheon told the House committee members on Thursday. "The time is now. We don't have the option of doing nothing."
The bill would also assess a $100 per year registration fee on electric and alternative fuel passenger vehicles and a $150 fee for commercial ones. A provision for a $100 per year fee on hybrid vehicles was removed.
Counties and municipalities would be able to levy a local gasoline tax of up to 2 cents per gallon, but only after approval in a local referendum.
Rep. Will Ainsworth, a Republican from Guntersville, was the only lawmaker on the committee who voted against McCutcheon's measure.
"I think there is a legitimate argument that there needs to be something done to fix the infrastructure in the state," he said. "My position is there are other things we could do in reforming government to come up with the funding."
McCutcheon in his testimony cited a recent report from TRIP, a Washington-based transportation advocacy group, that said completing the 50 most important transportation projects in Alabama would cost $3.46 billion.
The high-priority list includes 10 widening projects on Alabama's interstate highways, the report said.
"Based on forecast traffic growth, approximately 630 miles of Alabama's interstate highway system are currently or will become congested and will need additional capacity to accommodate economic growth in the state," TRIP said.
Alabama's fuel taxes generated $414 million in fiscal 2015. Collections are split between the Alabama Department of Transportation and counties.
The Alabama Department of Transportation would welcome the additional funding from McCutcheon's proposal, a spokesman said.
"Alabama's road and bridge needs vastly outweigh the revenue created by a funding system that hasn't changed in almost 25 years," said spokesman Tony Harris. "While Alabama DOT isn't leading this effort, we support and appreciate the members of the Legislature seeking to provide more funding."
