Alabama Bill Would Hike Gas and Diesel Taxes by a Nickel, and Then Some

A bill to increase both gas and diesel taxes by five cents in Alabama has passed its first committee on a voice vote and goes to the full House of Representatives on Thursday. The bill indexes both taxes using only two-cent increments.

2 minute read

September 16, 2015, 10:00 AM PDT

By Irvin Dawid

Alabama Road Signs

Henryk Sadura / Shutterstock

"A committee in the Alabama House of Representatives gave its approval Monday to a bill that would add a 5-cent-per-gallon tax to gasoline and diesel fuel," writes Tim Lockette for The Anniston Star. On Thursday, it goes to the full House, one of eight tax and fee increases needed to balance a budget shortfall, according to the ABC3340 video report.

The bill [HB28], which now moves to the full House for a vote, would automatically add a 2-cent-per-gallon increase in some years, if the price of gas falls within a limit set by a complex formula outlined in the bill.

The Associated Press clarifies that depending on the price of gas and diesel, the tax could decrease as well. What's unusual is that the tax will only change in two-cent increments. Adjustments will be made based on the Consumer Price Index (CPI) and the price of gas and diesel according to that "complex formula" Lockette mentions. See HB28 text for more information [PDF].

The state's 20.87 cents per gallon gas tax "hasn't increased the per-gallon tax since 1992 and can't continue to operate on 1990s revenue levels," state the bill's sponsor, Rep. Mac McCutcheon, R- Huntsville.

Our last post on Alabama transportation funding was on a 2010 proposal to use funds "from an investment account that generates earnings to support Medicaid, prisons, public health and other non-education state services" to pay for roads, typical of state legislators that will resort to diverting existing revenue streams rather than increasing fuel taxes.

Bobby Atkinson of Equipment World reports that the tax increase is opposed by the Alabama Trucking Association. Spokesman Jim Sizemore said it would be damaging to the trucking industry.

“We’re opposed to the bill,” Sizemore said. “It is a massive increase, and it’s not good for the economy.

However, their national counterpart, the American Trucking Associations, has been an outspoken proponent for raising the federal gas tax.

According to the American Petroleum Institute, Alabama had the 11th lowest gas prices in the nation as of April [PDF].

Hat tip: AASHTO Daily Journal Update.

Thursday, September 10, 2015 in The Anniston Star

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