An election year for the Alabama Legislature could open the door for a local lawmaker to push through his bill for local-option gas taxes, but some local officials have mixed feelings about the proposal.
Sen. Arthur Orr, R-Decatur, said this week he will definitely propose during the next legislative session his bill to allow commissions to ask voters in their counties to raise a local gasoline tax for specific road projects.
Some local officials have criticized the proposal as a way for the Legislature to pass responsibility for the gas tax off on local governments.
“A lot of representatives and senators are wanting us to cut back where they don’t have to do a statewide gas tax. They want us to do it. Well, that’s really unfair,” said Limestone County Commissioner Jason Black. “We need the money, but I’m not going to be the one to enforce it.”
Orr proposed the same bill last year after a proposed statewide gas tax hike failed in the Legislature, but he was unable to push his proposal through. He said he considers his odds better this time because lawmakers are unlikely to propose a statewide gas tax during an election year, eliminating competition from other bills.
“I think there’s a chance that lawmakers might decide, since we couldn’t do the statewide increase, we can at least do this,” Orr said, calling his proposal “a very viable alternative for local road funding.”
For counties and cities that have been struggling to cover the rising cost of road maintenance with flat gas tax revenue, it could provide an opportunity to bolster revenue with a local tax. The state has not increased its gas tax since 1992.
Morgan County, which has no local gas tax, saw its total disbursements from statewide gas taxes fall 6 percent from 2006 to 2013 as the numbers dipped from $4.07 million to $3.81 million, according to the Office of the State Treasurer.
In the wake of the Great Recession, revenue disbursements have recovered somewhat, but they were still just 0.5 percent higher in 2016 than they were in 2006, less than the average inflation rate for the same period.
Additionally, to make up for revenue losses elsewhere, Morgan County has routinely raided its road and bridge fund, which comes from property taxes, to balance its general fund budget.
The budget proposal for fiscal 2018, which starts Oct. 1, proposes taking $1.46 million from the road and bridge fund, which at one time was used exclusively for road projects.
Orr’s bill would allow commissions, by a majority vote, to propose a local gasoline tax increase of up to 5 cents per gallon, subject to approval by the voters in their county. Currently, only the Legislature can approve a county gas tax through a local bill requested by the commission.
County commissioners would have to show voters a list of projects that the increase would fund, which could be either city or county roads. The tax would expire after five years.
Morgan County Commissioner Jeff Clark said the county could definitely use the money to replace lost road and bridge dollars, and he thought area voters might be on board.
“I think it would be a positive. I think the people won’t be tickled to death to pay another tax, but I don’t think they would mind if it was not a high price tax but something that was doable,” he said.
Clark, who was elected in 1998, said total revenue for road maintenance in his district is down about $120,000 a year compared to when he was first elected. He suggested a tax of at least 3 cents per gallon to ensure they don’t have to return later asking the voters for more.
“If you get a gas tax passed, you’re not going to get another one for 20 years, so this will be all you’re going to get probably,” he said.
Limestone County adopted a 3 cent local sales tax via a local act in 1998. During fiscal 2016, it generated $1.34 million in revenue for the county, adding to the county’s total state distribution of $3.18 million from the gas tax.
Clark said he could only support a gas tax increase if all municipal leaders in the county agreed with it, noting opposition from municipal leaders sunk the statewide gas tax increase earlier this year.
Clark and Black both noted some problems with Orr’s proposal. Black said it does not address the need for more funding for the Alabama Department of Transportation to maintain state roads and bridges.
Clark pointed out that rural counties with few people and businesses to generate gas tax revenue would be excluded if all the counties consider tax hikes independently. With a statewide gas tax increase, those counties still get a share.
“They still have kids that travel on buses, and their roads need to be as safe as they are anywhere else,” Clark said. “Without people there footing the bill, they have to depend on the state.”
Proposals to increase the state gas tax have died in recent legislative sessions. Speaker of the House Mac McCutcheon, R-Monrovia, on Friday said discussions will continue but passage next year would be especially challenging.
“In an election year, the reality of getting legislators to vote for any type of revenue measure will be tough,” McCutcheon said. “But if there is urgency on the federal side, I think the body as a whole would be willing to take a look at it.”
President Donald Trump in June promised to create a first-class system of roads, bridges and waterways by using $200 billion in public funds to generate $1 trillion in investment to pay for construction projects. Matching funds from states will be required and state officials, including Gov. Kay Ivey, have said Alabama needs to be ready.
Ivey previously supported a gas tax increase to fund road and bridge projects and was disappointed a proposal in the Statehouse died this year.
On Friday, a spokesman for Ivey said something must be done to repair and replace aging and failing roads and bridges across the state.
McCutcheon said if no gas tax is passed next year, it will be priority early in the next quadrennium.