Fuel tax to jump 6-cents; future hikes later
If Alabama motorists want to save 6-cents a gallon on gasoline or diesel they need to head to the pumps before Sunday, Sept. 1, which is the date the first wave of Alabama's new 10-cents per gallon fuel tax goes into effect.
Passed during the most recent session of the Alabama Legislature, the tax will increase by 6-cents a gallon this Sunday, another 2-cents per gallon on Oct. 1, 2020 and another 2-cents on Oct. 1, 2021. Estimates show each cent is worth $32 million and at the full 10-cents the state will received between $300 and $320 million per year.
Effective Oct. 1, 2023 and on July 1 every year after the state gasoline and diesel tax rate will be adjusted by the percentage changed in the yearly average of the National Highway Construction Cost Index. The bill passed by the Legislature said an increase or decrease in the tax will not exceed 1-cent in any year.
The bill also says the state will begin collecting a $200 battery electric and $100 plug-in hybrid electric vehicle registration fees beginning Jan. 1, 2020.
Under the bill, two-thirds of the new tax will go to state projects, 25 percent will go the counties and 8 percent to the municipalities.
This marks the first increase in the state's gasoline and diesel fuel tax since 1992, which was raised to 18-cents per gallon at the time.
Estimates are that Escambia County will receive $856,872 per year once the tax reaches 10-cents per gallon. Taxes given to municipalities is based on population. Estimates (at 10-cents) for Escambia County municipalities are: Atmore, $81,816; Brewton, $49,938; East Brewton, $30,422; Flomaton, $14,829; and Riverview, $15,142.
Counties can use the funds for the preservation, improvement or maintenance of infrastructure; matching funds for federal road or bridge projects; payment of debt for road and bridge projects; and joint projects with one or more adjoining counties or with cities.
Escambia County is currently finalizing its annual plan on how the funds will be spent. That plan is due on Aug. 31.
