Alabama Gov. Kay Ivey Proposes Fuel Tax Hike for Infrastructure Plan

Road in Birmingham, Ala.
A road in Birmingham, Ala. (Terry McCombs/Flickr)

Alabama Gov. Kay Ivey has proposed a 10-cent increase to the state’s fuel tax as part of her Rebuild Alabama Infrastructure Plan to generate money for transportation projects.

Ivey announced the infrastructure plan at a news conference Feb. 27 alongside a group of legislators and local government officials. The proposed 10-cent tax hike would be indexed to keep up with the rising cost of rebuilding roads.

The current excise tax rate is 19 cents per gallon for diesel and 18 cents per gallon for gasoline. The revenue created from these taxes creates 80% of Alabama’s transportation funding.

The revenue created through the proposed fuel tax increase will be split among state, county and municipal government agencies for infrastructure improvement and maintenance projects.

“Twenty-seven years have gone by without any change, not even a nickel. That’s just unacceptable,” Ivey said during the event. “When we choose to turn our challenges into opportunities, Alabama is better off for it.”

A separate portion of the revenue will go toward a bond that will finance improvements to the ship channel at the Port of Mobile’s docks. The Port of Mobile, through which 64 million tons of cargo move a year, is an important hub for goods that later travel throughout the state.

According to the Alabama State Port Authority, major imports include coal, aluminum, copper, fence posts and cement. Ivey said that $436 million in goods are shipped in Alabama using the state’s road and bridge system.

“Addressing our port is also essential to our manufacturing, retail and agriculture businesses in every part of the state,” Ivey said.

A 2019 report from the University of Alabama’s Transportation Institute and Transportation Policy Research Center found that cars and trucks put approximately 69 billion miles on the state’s roadways every year.

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The American Society of Civil Engineers’ most recent infrastructure report card, issued in 2015, graded Alabama an overall C-. Bridges earned a C- and roads received a D+. According to The Road Information Program, a transportation research group, some 30% of Alabama’s roads and highways are in poor or mediocre condition because of insufficient funding.

Ivey indicated that Alabama is decades behind in conducting maintenance and replacement projects. A notice from the governor’s office states that county road resurfacing should occur every 15 years, but counties operate on a 56-year schedule for such activities.

Ivey delivered her remarks in Maplesville, a small town 60 miles south of Birmingham. Standing before a 55-year old bridge that can’t support the weight of a big truck, she used Maplesville as an example of why Alabama’s infrastructure needs improvement.

“That’s past its life span and it looks like it’s out of date,” Ivey said. “We must provide safe roads and bridges for our people and be sure that the wheels of commerce can continue to turn.”

Ivey expressed confidence that the plan would pass. State Rep. Bill Poole (R-Tuscaloosa) and Sen. Clyde Chambliss (R-Prattville) will be supporting the bill in the state Legislature.

“As a civil engineer, I applaud Governor Ivey’s efforts to address this pressing issue and look forward to working with stakeholders from all levels of government to ensure her infrastructure bill is successful,” Chambliss said in a press release.