As expected, Representative Mac McCutcheon (R- Madison) introduced the second bill of a two bill package that will result in an increase in taxes on gasoline and diesel fuel of six cents per gallon. HB394 was considered and given a favorable report by the House Transportation, Utilities & Infrastructure Committee today. It will receive its second reading and will be available for full House consideration as early as next week, but most likely will not be addressed until legislators return from Spring Break the first week of April.
HB394 ties the total fuel taxes paid in Alabama to the average taxes/fees placed on gasoline by the contiguous bordering states. The average of the taxes/fees for bordering states on gasoline is 26.95 cents/gallon, while Alabama is currently at 20.87 cents/gallon. Therefore, the tax on gasoline will increase by 6 cents per gallon upon passage of this legislation.
Interestingly, the bill also ties the increase in diesel fuel taxes to that of the gasoline average. The current average of the taxes/fees for bordering states on diesel is 26.31 cents/gallon, while Alabama is currently at 21.85 cents/gallon. This is a differential of 4 cents/gallon, but since the proposed legislation ties the increase for diesel to the border state gasoline average, diesel will increase 6 cents/gallon which would place Alabama above the border state average on diesel by 2 cents/gallon.
The legislation also has an automatic adjustment mechanism that will re-calculate the border state average once every four years over the next 12 years. Not coincidentally, the adjustment occurs in the year following the election of the legislature.
The fuel tax increase contemplated by the legislation will result in a $200 million increase in taxes.
Ainsworth Only “No” Vote in Committee
The House Transportation Utilities & Infrastructure Committee is chaired by Representative Lynn Greer (R- Rogersville) and is made up of 9 Republicans and 4 Democrats. McCutcheon’s bill, along with Senator Gerald Dial’s bill, SB180 (the “Accountability” bill directing how the increased taxes will be spent) were both given a favorable report on voice votes by the committee. The only “No” vote on the tax increase was cast by Representative Will Ainsworth (R- Guntersville). If you would like to contact Ainsworth, a rising star in conservative circles, he can be reached at email@example.com.
The other members of the Committee are Representatives Joe Faust (R- Fairhope), George Bandy (D- Opelika), Napoleon Bracy (D- Prichard), Barbara Drummond (D- Mobile), Victor Gaston (R- Mobile), Dexter Grimsley (D- Newville), Nathaniel Ledbetter (R- Rainsville), Phillip Pettus (R- Killen), Chris Sells (R- Greenville), Kyle South (R- Fayette) and Margie Wilcox (R- Mobile).
The committee considered the legislation for approximately 30 minutes and at no time did any committee member acknowledge that the legislation creates a $200 million tax increase.
Lots of Trough Feeders
The list of supporters for the $200 million tax increase is a long one. Led by the Business Council of Alabama, the coalition of those that will benefit from road construction projects include the Alabama Department of Transportation, the Alabama Roadbuilders Association, the Association of County Commissions of Alabama, contractors, engineers and others.
“Thank Goodness for Mississippi”
The taxes/fees paid by the citizens of the State of Mississippi are 18.79 cents/gallon for gasoline and 18.4 cents/gallon for diesel, representing the lowest of the four contiguous border states. However, legislators in Mississippi are considering raising their taxes/fees on fuel by a whopping 17 cents/gallon. If this were to occur, their action, taken in Mississippi, will raise Alabama’s fuel taxes by another 4 cents/gallon or another $130 million. Alabama’s citizens, in effect, will have their taxes raised without any representation. Similarly, the State of Florida pays 36.58 cents/gallon in taxes/fees on gasoline, of which 19 cents/gallons are imposed by the various counties. Again, Alabama’s citizens could be subject to an increase in taxes because of an action taken in a county in Florida.