Alabama Governor Ivey signs 10-cent-per-gallon gas tax increase

Pointing out that the state gas tax had not been raised since 1992, Ivey announced her Rebuild Alabama Infrastructure Plan last week, calling on lawmakers to hold a special session specifically to pass the gas the tax to fund road and bridge construction.

The Alabama House of Representatives passed it last week on a 84-20 vote.

Phased in over three years, the tax increase will raise an estimated $320 million a year for road construction, with about $12 million going to the port of Mobile. The state tax on gas and diesel fuel will raise to 24 cents a gallon from its current 18 cents a gallon rate starting in October, with an additional 2 cents per gallon increase per year on October 1st in 2020 and 2021.

In addition, the legislation also links the state fuel tax to a national highway construction cost index, allowing the tax to be adjusted up to a penny every two years, starting in 2023.