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Alabama Legislative Report

News

The Special Session called by Governor Ivey last week came to an end on Tuesday with the passage of a package of bills that will increase construction and maintenance funding for roads, bridges, and other infrastructure as part of Ivey’s “Rebuild Alabama” plan.  The Regular Session will resume on Tuesday, March 19.

Gas Tax Becomes Law

The three-bill package (HB1, HB2, and HB3) will incrementally raise the state gas and diesel fuel tax by 10 cents per gallon over a three-year period.  The tax will increase by 6 cents per gallon after August 31, 2019, an additional 2 cents per gallon on October 1, 2020, and another 2 cents on October 1, 2021.  The tax will then become indexed beginning in 2023.  The increase is estimated to bring in about $320 million per year when fully implemented.  Alabama’s fuel taxes have remained unchanged since 1992.

In addition to the gas and diesel fuel provisions, the package also includes a $200 annual registration fee for electric vehicles and a $100 fee for plug-in hybrid vehicles.  Other issues addressed in the package include authorization of bonds for improvements to the State Port Authority and increased oversight of the Alabama Department of Transportation.

The House on Friday passed the Governor’s package with overwhelming bipartisan support, passing the funding bill, HB2, by an 84-20 margin.  The Senate followed suit yesterday by approving the measure by a vote of 28-6.  Governor Ivey signed the package into law yesterday.

State of the State

Governor Ivey gave an ambitious State of the State speech last week and addressed several important topics, including the expansion of education programs, teacher/state employee pay raises, and state prison funding.  She called for an additional $25 million for the pre-K program, a 4% raise for teachers, a 2% raise for state employees, and an additional $31 million for the state prison system.

Financial Outlook

State budget officials reported growth in state revenues such as sales tax and income tax, which will result in healthy Education Trust Fund and General Fund numbers.  Details of Governor Ivey’s FY20 General and Education budgets have been on hold pending the completion of the Special Session.

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