For the first time in 27 years, anyone fueling up at a gas station in Alabama soon will fork out more money in taxes that will go directly to the state. Starting September 1, 2019 there will be a $.06 increase on a gallon of gas, marking the the first such increase since 1992 that will generate approximately $192 million during the coming fiscal year.
Subsequent tax increases include 2 cents on Oct. 1, 2020, and another 2 cents on Oct. 1, 2021, bringing the total state tax on gas in Alabama from $.18 per gallon to $.28. Altogether, the state expects the new cash flow to deliver $320 million annually when all 10 cents of the tax are in force.
Governor Kay Ivey signed the gas tax into law in March in to help the effort of fixing a backlog of infrastructure issues as well as build new roads and bridges. The campaign is known as Rebuild Alabama and the state government, counties, cities and the Port of Mobile are all in line for some of the new dollars.
“When we began on the road to Rebuild Alabama, I promised our state we would see real results, real improvements and a promising future,” Ivey said in an emailed statement. “On top of the state dollars, all 67 counties and every municipality will receive additional revenue to be used for roads and bridges.”
She added, “Almost 30 years with no added investment to our infrastructure and drivers can certainly feel it. However, being content with the status quo is no longer acceptable. Alabama deserves better, and in the case of our infrastructure system, we are doing more.”
In the coming months, the state will receive $122 million from the 6-cent tax hike. The Alabama Department of Transportation will be doling out money in several big chunks:
- $82 million for state congestion relief and economic development projects that ALDOT has already announced.
- A $43 million widening of U.S. 411 from Turkeytown to Cherokee County Road 20. The project will complete a four-lane access from Centre to I-59 in Gadsden, providing Cherokee County with a four-lane connection to the interstate.
- More than $31 million for expansion of U.S. 82 in Tuscaloosa from Alabama State Route 69 to Rice Mine Road. The section is listed by ALDOT in the top 20 of busiest four-lane U.S. routes in Alabama. Estimated cost of right-of-way acquisition is $750,000, with construction scheduled to begin within the next two years.
- Funds of up to $48 million will be dedicated for county projects. Under the allocation of the overall gas tax revenues, counties are set to get 25%.
At its full implementation when the $.10 per gallon is concluded by 2021, the state, counties and cities will have about $320M in additional funding for roads and bridges which will have a $15 Billion economic impact on Alabama over the next 20 years.
