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House passes bill limiting local fuel tax spending

MONTGOMERY, Ala – A bill that would limit local tax revenue spending to road and bridge construction and maintenance saw near-unanimous approval Tuesday in the Alabama House.

Under existing law, the revenue collected from the state’s gas tax may only be used on motor vehicle infrastructure such as roads and bridges. Gas taxes levied on the local level, however, do not carry the same restrictions.

House Bill 254, sponsored by Rep. Steve Clouse, R-Ozark, would impose the same spending restrictions that exist on gas taxes levied by the state to cities and counties.

First implemented in 1923 at 2 cents a gallon, Alabama’s gas tax has been in effect for 100 years, and saw an incremental 10-cent-per-gallon increase implemented in 2019, the first such increase since 1992. That increase generated an additional $320 million in annual revenue, and was designed to help “make (the state’s) crumbling infrastructure a problem of our past,” Gov. Kay Ivey said while promoting the tax increase.

In 1952, the Alabama Legislature voted to restrict the revenue from the state’s gas tax to motor vehicle infrastructure-related costs. At less than two pages, Clouse’s bill merely applies that same standard at the local level.

The bill would not be retroactive, however, and would only apply to municipalities that introduce a gas tax after the bill’s passage, were it to become law. Municipalities that already have a gas tax in place of which the revenue is spent on things other than roads and bridges would not be required to alter their spending.

When introducing the bill on the House floor, Clouse made the case that were municipalities already required to spend their gas tax revenue on infrastructure, the state could have potentially avoided, at least partially, the 2019 gas tax rate increase.

“There’s been a number of municipalities around the state that have had gasoline tax going to things other than roads and bridges,” Clouse said. “If they had been dedicating it to roads and bridges, we may not have had to pass as much of a tax as we did on the state level.”

Rep. Napoleon Bracy, D-Saraland voiced a number of concerns he held relating to the bill’s potential effect on poorer cities.

“What concerns me is I represent different types of communities and cities within Mobile County; cities that have surplus budgets, and cities that are barely making budget, and they don’t have a lot of growth, a lot of options,” Bracy said. “So for a couple of my cities, I could see this not being an issue at all, but then for a couple of them, I could see this being a big issue.”

In response, Clouse argued that gas taxes were conceptually a user fee, and that it would not affect those who don’t drive.

Despite his expressed concerns, Bracy went on to vote in support of the bill, as did 102 of the 105 Alabama House members. Three House members voted against the bill; Reps. Mary Moore, D-Birmingham, John Rogers, D-Birmingham, and Patrick Sellers, D-Pleasant Grove.

The bill now goes to the Alabama Senate for consideration.

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