By Mary Sell and Caroline Beck, Alabama Daily News
MONTGOMERY, Ala. – The proposed 10-cent-a-gallon gas tax increase to fund infrastructure improvements is expected to get its first vote in committee Thursday morning.
A new version of Gov. Kay Ivey’s priority bill was filed Wednesday afternoon in the special session dedicated to the issue.
The tax is expected to generate more than $300 million a year. House Bill 2 increases the allocation for improvements at the Port of Mobile from the originally proposed $10.2 million a year to $11.7 million.
Some critics have raised objections to redirecting gas tax revenues towards the port. Expanding the port to take on greater capacity is a priority for U.S. Sen. Richard Shelby, who last year secured federal matching dollars to deepen and widen the Mobile Bay shipping channel.
Several north Alabama lawmakers said they supported sending money to the port to improve and expand it.
“I am in favor of it, because it is critical to the entire state,” said Rep. Parker Moore, R-Decatur. “That is one thing that I need to do a better job of communicating to my constituents, because we have a lot of industry in my district, and with that industry comes a product and that product gets shipped down to the port and sent all over the world. So if we’re not able to get that shipped out then that product is going to go to some other state then we’re going to miss out.”
Rep. Lynn Greer, R-Rogersville, chairs the House Transportation, Utilities and Infrastructure Committee, which has a public hearing on the bill at 10:30 this morning followed by a vote. He said the Port of Mobile helps all counties.
“Just like with the Toyota-Mazda plant up in Limestone County, that is quite a few million of state funds going into that project and at least 16,000 jobs up there, so that is helping all Alabamians and the port will help them down there and up there,” Greer said.
House Bill 2 also makes changes from earlier versions to reduce and clarify fees on electric and hybrid vehicles. Fees now apply to only “plug-in” hybrid vehicles or battery electric vehicles.
The original $250 annual fee on electric cars would have been the highest in the nation. Also, any hybrid, including those using gasoline, would have been subject to a $125 fee. Now, the proposed electric car fee is $200 and the fee for “plug-in hybrids” is $100.
Jeff Martin, government affairs director for Conservation Alabama, told Alabama Daily News his organization had opposed the bill because of the electric and hybrid provisions, but now support the plan after the changes.
“Conservation Alabama was approached by some proponents of the legislation who heard our concerns and agreed to support some clarification and reductions in fees with regards to hybrid and electric vehicles,” Martin said.
Advocates for the tax increase, which is being fast-tracked in a special session and could be approved by early next week, say the cost to the average driver would be $55 a year.
Twenty-one states currently have fees on hybrid and electric vehicles, the most expensive being Georgia and West Virginia at $200. Some lawmakers were concerned about the original fee structure.
“A lot of those hybrid cars have the same fuel mileage as regular cars, if not less in some cases, so I think that is just an added burden on them that isn’t fair,” said Moore.
The proposed tax increase would happen gradually: six cents this year, two cents next year, and two cents in 2021. The tax would then be indexed to rise or fall based on the National Highway Construction Cost Index to keep up with inflation and rising construction costs. According to the bill, any future increases or decreases could not exceed one cent per gallon every two years.
The bill allocates two-thirds of all new revenue to fund state road projects, 25 percent toward county road projects and 8.33 toward city projects. The division of new revenue between counties and cities has been a sticking point in previous gas tax proposals, but both the Alabama League of Municipalities and the Association of County Commissions of Alabama are supporting Ivey’s bill.
Rep. Terri Collins, R-Decatur, said the need for infrastructure improvements is well known.
“There’s no such thing as a perfect bill, but sometimes you have to step up and do the hard thing for what helps the whole state,” Collins said.
Ivey called a special session Tuesday night, after her state of the state speech. Lawmakers had been alerted to it earlier and some Democrats are angry about the short notice. The regular session began Tuesday.
“There was no conversation before hand, so I get very concerned and disappointed when we are not really organized as we should be,” Minority Leader Anthony Daniels, D-Huntsville said.
Daniels said he received an email about the special session at the same time as other House members.
“I can only give guidance when I’ve been given guidance,” Daniels said. “… So until those types of things improve, I think you will see the polarization probably become a little bit more turbulent.”
Daniels told reporters that he plans on leaving for Huntsville on Thursday, as is normal during a regular session, regardless of a special session.
By calling a special session on the gas tax, lawmakers can focus on it alone. During a regular session, “budget isolation resolutions” require support from three-fifths of the quorum before a non-budget bill can be debated and voted on. That rule doesn’t exist in a special session and the gas tax only needs a simple majority of lawmakers in both chambers to support it.
The bill could clear the House this week and move to the Senate.
“I applaud the governor for stepping up and owning the issue,” Minority Leader Sen. Bobby Singleton, D-Greensboro, said. “The pace that we go will dictate whether or not it gets passed.
If it looks like we’re being pushed too fast, some folks might fall off the fence.”
Rep. Andy Whitt, R-Harvest, said he would like to see more of the new money go directly to each of the counties.
“These funds are critical and need to be easily accessible,” Whitt said. “I do like that all funds will be spent directly on roads and bridges and not salaries or building.”
The way of the future
The Alabama Department of Revenue doesn’t track vehicle registration by fuel type, but Tammy Herrington, executive director of Conservation Alabama, said electric vehicles make up about 1 percent of the state’s total.
However, the state will soon play a major role in their production. Last year, Mercedes-Benz broke ground on a 2 million-square-foot plant in Bibb County that will supply battery packs for the automaker’s Alabama-made electric vehicles.
According to the Alabama Department of Commerce, the battery plant is a key component in a $1 billion Mercedes expansion.The plan calls for Mercedes to begin producing electric SUVs at the beginning of the next decade.
“Mercedes is poised to produce its first electric vehicle in Alabama, and we estimate that more than 12,000 jobs have been created in Alabama producing energy efficient vehicles,” Herrington said. “It seems unwise to invite makers of this innovative technology into our state and then make it more difficult for Alabama drivers to purchase these vehicles.”
Ivey’s infrastructure bill creates an “Electric Transportation Infrastructure Grant Program” funded with a portion of the electric vehicle fees. That program would support building a network of electric charging stations necessary to accommodate the growing use of electric vehicles. Grants would be available to municipalities, counties, universities and other public institutions for the development of EV charging stations.
Justice Smyth, Outreach Director for the Alabama Transportation Institute, said having an electric charging infrastructure is important to keeping Alabama highways as preferred routes for travelers.
“It’s one thing to drive around town on a less than fully charged battery. It’s another thing entirely if I’m considering driving from Huntsville to the beach. I’d want to know that I have adequate opportunities to stop and ‘fill up.’ Having more charging stations in metro areas and along major travel corridors would probably give consumers more confidence they could reach their destination uninterrupted,” Smyth said.
While most agree that electric vehicles are “the future of the auto industry,” Smyth said it is important that they pay their share for the use of highways.
“EVs use the same roads and bridges as other vehicles and they contribute to the wear and tear of the physical infrastructure,” he said. “But because EVs do not purchase gasoline or diesel fuel, they do not pay to support the maintenance of the transportation system.
“There are many benefits to owning an EV, including helping to solve issues related to air pollution and depletion of fossil fuel resources, but owners of electric-powered vehicles should also expect to pay their share for the maintenance, rehabilitation and enhancement of the roadway network.”
Alabama Daily News reporters Will Whatley and Todd Stacy contributed to this report.