Alabama’s Biggest Construction Project
Going forward there’s broad business support for increased funding for Alabama highways. But in the rear view, the road is littered with neglect stretching back 23 years.
A new accountability bill sets the stage for highway funding solutions, says Jim Page.
Jim Page, the president and CEO of the West Alabama Chamber of Commerce, is the spokesperson for the Alliance for Alabama’s Infrastructure (AAI), a coalition of groups promoting increased funding for improvements to Alabama’s roads and bridges.
State highway funds come from state and federal gasoline taxes. Alabama’s rate of 39.3 cents per gallon ranks seventh among Southeastern states and is about 10 cents per gallon less than the national average and 4 cents less than the regional average.
In 1992 the state tax rate was bumped up 5 cents, and that was the last increase. Meanwhile, the price of gas has plummeted, fuel efficiency has increased, road funding has plunged and road conditions have hit bottom. Alabama Department of Transportation (ALDOT) scores 21 percent of Alabama roads in poor condition and 23 percent of bridges obsolete or deficient.
In the last session of the Legislature, a highway funding measure, House Bill 394, passed in the House, then failed to come to a Senate vote before the session ended. But a companion bill was ratified by both branches that sets up rules for new gas tax revenue.
We’re starting with a clean slate in the Legislature. There have been proposals in the past two legislative sessions that have not passed, so the AAI is now working with members of the Legislature to see what a proposal would look like for the next session, next spring.
The companion bill that did pass, Senate Bill 180, an accountability bill, is a big step that sets the stage for the Legislature to address the funding issue. It calls for more transparency and more accountability for any revenue generated going forward. It mandates that any new revenue go directly to roads and bridges. It can’t be diverted for other purposes.
Unfortunately, there have been cases of some highway funding going to other departments in the past, and to administrative overhead in the Alabama Department of Transportation. It’s a hard pill to swallow — discussing an increase in revenue and not knowing that all of the money would go to fixing the root issue and could be diverted to other state agencies or feeding the bureaucracy and administrative overhead. So for a critical first step, insuring more transparency, we want the ALDOT to notify the public and give regular reports on the status of new and existing projects.
When we were talking to members of the Legislature, at no time did we talk to anyone questioning the crisis we’re facing. No one questioned the fact that the way we fund and the amount we fund — which hasn’t changed since 1992 — is unsustainable.
As cars become more fuel efficient, we’re paying less now than we were in 1992, so as our needs are increasing, our revenue is decreasing. It is not a sustainable model, and I think that the general public understands that. I’ve seen some polling on this, and of all the issues, people seem to understand the need for an investment in transportation. Nobody wants to drive over roads that are unsafe and they understand that need to create economic development opportunities. I think the general public is ready to do that.
The business community is fairly united in the understanding that we have an infrastructure crisis in this state. I’m proud that the Business Council of Alabama and the Chamber of Commerce Association of Alabama have made this a top priority. Other groups have also made it a top priority: government associations, county commissioners. We have a pretty broad-based coalition under the Alliance for Infrastructure.
Legislators have specific projects in areas they represent and have concerns about their residents paying into the transportation coffers but the money being spent in other areas of the state. It’s very much a justified concern. But we can’t address this anywhere in the state unless we have more revenue and there are more resources to go around.
We remind people during the education process a significant portion of the state gas tax and the state’s portion of the federal gas tax goes to counties and a smaller percentage to municipalities. It’s a misnomer that 100 percent goes to ALDOT or a major city project.
Alabama levies 16 cents and the federal government 18.4 cents tax on gasoline. The state gets a distribution from the federal tax every year. Congress has not passed a long-term increase in the gasoline tax since 2005. For a decade we have had temporary patches lasting only two years. Congress passed a five-year funding bill in 2015, which doesn’t seem long-term, but it is compared to what we’ve been dealing with in the past. It at least gives us a clear picture of what kind of revenues we’ll have going forward. Congress passing that federal bill set the stage for us to be able to make some policy decisions in the state with more clarity. The Legislature now has two things it can depend on — the state accountability bill and the federal highway bill. There is now no excuse to pass some kind of highway funding measure.
The proposals over the last couple of years deal with increasing what you pay at the pump, increasing the gas tax. The arguments of proponents are that that’s a consumption tax and a user fee, not universally thrown on the people.
Still it’s a tough political position. In the last session of the Legislature, House Bill 394 called for raising the state user fees 6 cents a gallon. The bill’s sponsors looked at bordering states and their average fuel rates. Alabama on average is 6 cents a gallon less. So the legislation called for our getting up to the average of our neighboring states.
We are back to a blank slate as to revenue proposals. I would challenge every member of the Legislature and business community and anybody in the public, if they have ideas and revenue generating solutions, we are all ears. Every idea is going to be put on the table. They can address them to the Alliance or to their members of the Legislature. We have a crisis on our hands, and we can’t kick the can down the road any longer. Time is of the essence.
Chris McFadyen is the editorial director of Business Alabama.