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Ivey proposing 10 cent gas tax hike in Alabama

February 27, 2019
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Gov. Kay Ivey unveils her infrastructure proposal and gas tax plan during a news conference near an old bridge in Maplesville, Ala. on Wednesday, Feb. 27, 2019. (Mickey Welsh/The Montgomery Advertiser via AP)

MAPLESVILLE, Ala. (AP) — Alabama Gov. Kay Ivey on Wednesday proposed a 10-cent-a-gallon gas tax increase to fund road and bridge construction in a state where she says the infrastructure is crumbling.

The proposed 10-cent increase would be phased in over three years and then the state fuel tax would be indexed to keep up with construction costs.

The Republican governor said the state’s current 18-cent gas tax, which was last increased 27 years ago, has not adequately kept up with the state’s construction and maintenance needs. As a result, she said the state has dangerous and bumpy roadways, obsolete bridges and clogged traffic arteries that hinder the flow of motorists and commerce.

“We must provide safe roads and bridges for our people and be sure that the wheels of commerce can continue to turn .... It’s time to make our crumbling infrastructure a problem of our past,” Ivey said in front of a 55-year-old bridge in the central Alabama town of Maplesville.

The proposed gas tax increase is expected to be the dominant issue of the 2019 legislative session that begins Tuesday. As the Republican governor announced the details of the proposal, she made a plea for broad support, saying it is an issue that crosses party lines.

“The fact of the matter is Alabama must, absolutely must, address this problem and to be successful we’ve got to tackle it together. We all need to be all in on this, because this is for the good of the people and their safety.” Ivey said.

To take effect, though, the proposed tax increase must be approved by the Republican-dominated Alabama Legislature, which just last week saw the Alabama Republican Party committee approve a resolution opposing any gas tax increase unless there is an offsetting tax decrease somewhere else.

Ivey on Wednesday shrugged off her party’s opposition, noting that the resolution was passed before she had announced specifics of the proposal.

“It’s hard to have confidence when folks haven’t even seen the bill or had discussions to make a decision like that. I’m dealing with informed people and we’ll just press on,” Ivey said.

The proposed tax increase, by law, must start in the House of Representatives. Republican House Speaker Mac McCutcheon said House leadership is supporting the measure.

“From the House of Representatives, thank you for not doing the easy thing, but doing the right thing And we support you governor,” McCutcheon said.

Asked about the outlook in the House of Representatives, McCutcheon said legislators “are now assessing the bill,” but said that the response has been positive.

Alabama’s current state gas tax of 18 cents a gallon has been unchanged since 1992 and is among the lowest in the nation, according to comparisons from the American Petroleum Institute. However, local governments can have their own separate gas taxes

The proposed 10-cent tax increase would be phased in over three years with a six-cent increase the first year and another two cents in each of the following two years, Ivey said.

When fully implemented, the tax increase would bring in an estimated $320 million each year. The money would go almost entirely to road and bridge projects. Ten million dollars would be steered to the state port in Mobile, which Ivey said is crucial to the state’s economic development.

Going forward, the gas tax would be indexed to construction costs to allow it to keep pace with inflation but would have a cap of an increase of no more than one cent every two years, Ivey said.

McCutcheon said he hopes to have the bill on the House floor within the first weeks of the session.

Ivey has the option of calling a special session to focus attention on the measure. That would also do away with procedural hurdles that occur in a regular session. Ivey said Wednesday that all options are on the table.

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