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Local funds key in gas tax support

By Mary Sell and Caroline Beck, Alabama Daily News

Alabama’s more than 400 cities and towns currently share about $22 million a year from the statewide gas tax. They’ll get an additional $26 million a year under a proposed 10-cent-a-gallon increase.

Alabama’s counties now receive a combined $176.5 million; if House Bill 2 becomes law, they’ll receive an additional $80 million.

“It’s enormous,” said Greg Cochran, deputy directory of the Alabama League of Municipalities, about the potential impact of the gas tax. 

That local impact was used by proponents to sell Alabama House members on the tax hike that’s expected to general $320 million a year. Representatives passed the bill on an 83-20 vote Friday evening. It moves to the Senate where at least some Republicans say they want changes.

Local impact

About 66 percent of new revenue will go to the state. But a different distribution formula means municipalities get more of the new money than they do with the current 18-cent tax. Each town and city will get a base amount $14,109, then additional money based on population.

“Some communities don’t receive $14,000 now,” Cochran said. “(The tax increase) will give small communities some money to pool for local projects.” 

Birmingham, Huntsville, Montgomery and Mobile would all get more than $1 million in new money.

Rep. Terri Collins, R-Decatur, said more money for local roads, and major roadways in area, was part of the reason for her support of the bill.

The bill dedicates about $11.7 million a year in gas tax revenue to improvements and expansions at the Port of Mobile. The state money would be used to match even more federal dollars.

“Our businesses will benefit from a bigger port,” Collins said.

The infrastructure plan is Gov. Kay Ivey’s No. 1 priority and last week she called a special session of the Legislature in order to fast-track the bill and make it easier to pass.

House Bill 2 also place an annual fee of $200 on electric vehicles and $100 on “plug in” hybrid vehicles.

The increase would be phased in over three years and then in 2023, it could increase or decrease by 1 cent every two years based on construction costs.

That indexing is a dealbreaker for Sen. Larry Stutts, R-Tuscumbia. His district includes portions of the Shoals and Lawrence County.

Sen. Tim Melson, R-Florence, said there are good things in the bill for his district, which includes portions of Lauderdale, Limestone and Madison counties. He said there could be money for the Port of Florence in a final version.

But he doesn’t like the indexing either. He said he understands the argument that without it, the state in 20 years could be in the same position it is now, needing to pass an increase. Still, he doesn’t want to sign off on an open-ended increase. 

Stutts also wants a corresponding decrease in another tax on Alabamians.

“I guess my first choice is the grocery tax,” Stutts said. 

The conservative Alabama Policy Institute has lobbied for a tax cut elsewhere too.

“It is the poor and middle class that will bear the brunt of the gas tax increase,” said Phil Williams, director of policy at the institute. “Why don’t we offer them a modest reform to offset it and to show them that we care about them in the process?” 

Meanwhile, Melson said he doesn’t want to see Education Trust Fund money moved to the General Fund. That transfer isn’t in the gas tax bill, but Ivey has said she planned to fix concerns over about $63 million that’s currently diverted from ALDOT every year to fund other agencies by moving about half that amount from the separate education budget.

Late last month, the Alabama Republican Party passed a resolution opposing any gas tax increase.

Also in the bill are:

An annual allocation of at least $10 million in grants that cities and counties can apply.

It’s for projects that are beyond local governments’ abilities to address, Harris said.

A congestion relief program that will require ALDOT to develop a prioritization plan to allocate funds to increase capacity on crowded state, U.S. and interstate routes. Tony Harris, a spokesman for ALDOT, said I-565 in the Tennessee Valley is an example of a potential project.

An economic development roads program requiring ALDOT to develop a prioritization plan to allocate funds for economic development road projects “with priority give to projects in economically underserved areas.” 

“We believe there are about a dozen counties that do not have a four-lane route to an interstate highway,” Harris said. “So we want to address that.” 

An annual allocation between $30 million and $50 million for “projects of local interest on the state maintained highway system, which may also include local roads and bridges essential to such projects.”

The bill also says the new revenue can’t be spent on salaries, equipment or property. 

This year, ALDOT had total appropriations of about $1.5 billion. About $785 million comes from state revenue; $720 million comes from federal and local sources, according to the Legislative Fiscal Office.

The bill will be in a Senate committee Monday afternoon.

Dollars and cents

Under House Bill 2, the gas tax increase bill, municipalities would receive an additional $26 million, bringing their total to $48.7 million. Counties would receive an additional $80 million, bringing their total to $256.4 million

How much would local counties and the municipalities within them receive under the gas tax increase?

Lauderdale County: $1.38 million

Anderson: $16,081

Killen: $21,609

Florence: $280,271


Rogersville: $22,618

St. Florian: $16,904

Waterloo: $15,483

Colbert County: $1.02 million

Cherokee: $21,203

Leighton: $19,044

Littleville: $20,953

Muscle Shoals: $103,098

Sheffield: $75,296

Tuscumbia: $71,127

Franklin County: $824,040 

Hodges: $16,058

Phil Campbell: $21,880

Red Bay: $35,486

Russellville: $80,651

Vina: $16,024

Lawrence County: $841,061 

Courtland: $18,231

Hillsboro: $17,847

Moulton: $37,605

North Courtland: $18,387

Town Creek: $21,555

Morgan County: $1.62 million

Decatur: $391,004

Eva: $17,622

Falkville: $22,767

Hartselle: $110,605

Priceville: $31,102

Somerville: $19,010

Trinity: $28,290

Limestone County: $1.36 million

Ardmore: $22,191

Athens: $162,336

Lester: $14,860

Mooresville: $14,468

Madison County: $3.71 million

Gurley: $19,531

Huntsville: $1,233,293

Madison: $304,769

New Hope: $33,130

Owens Cross Roads: $24,405

Triana: $17,466

Shelby County: $2.41 million

Alabaster: $201,570

Calera: $92,768

Chelsea: $83,041

Columbiana: $42,520

Harpersville: $25,190

Helena: $127,786

Indian Springs Village: $30,105

Montevallo: $56,911

Pelham: $158,647

Vincent: $27,566

Westover: $22,740

Wilsonville: $26,476

Wilton: $18,759

Jefferson County: $6.53 million  

Adamsville: $44,720

Argo: $41,667

Bessemer: $199,967

Birmingham: $1,450,804


Brookside: $23,335

Cardiff: $14,481

Center Point: $128,652

Clay: $79,825

County Line: $15,855

Fairfield: $89,363

Fultondale: $70,835

Gardendale: $108,155

Graysville: $28,764

Helena: $127,786

Homewood: $184,471

Hoover: $566,612

Hueytown: $123,128

Irondale: $97,703

Kimberly: $32,460

Leeds: $93,804

Lipscomb: $29,069

Maytown: $15,720

Midfield: $50,426

Morris: $26,693

Mountain Brook: $152,290

Mulga: $19,786

North Johns: $15,090

Pinson: $62,597

Pleasant Grove: $82,546

Sumiton: $31,167

Sylvan Springs: $24,547

Tarrant: $57,412

Trafford: $18,482

Trussville: $149,041

Vestavia Hills: $244,488

Warrior: $35,608

West Jefferson: $16,397

St. Clair County: $1.32 million

Argo: $41,667

Ashville: $29,082

Margaret: $44,083

Moody: $93,486

Odenville: $38,337

Pell City: $100,045

Ragland: $25,204

Riverside: $29,055

Springville: $41,728

Steele: $21,169

Walker County: $1.13 million

Carbon Hill: $27,790

Cordova: $28,290

Dora: $27,817

Eldridge: $14,989

Kansas: $15,639

Jasper: $111,262

Nauvoo: $15,605

Oakman: $19,450

Parrish: $20,756

Sipsey:  $17,607

Sumiton: $31,167

Etowah County: $1.47 million

Altoona: $20,425

Attalla: $55,049

Boaz: $78,762

Gadsden: $263,598

Glencoe: $49,038

Hokes Bluff: $43,122

Rainbow City: $79,108

Reece City: $18,529

Ridgeville: $14,867

Sardis City: $25,466

Southside: $71,052

Walnut Grove: $18,834

Source: Alabama Department of Transportation, Association of County Commissions of Alabama

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