County engineer gives update on gas tax funding

Published 10:42 am Tuesday, March 26, 2019

By NEAL WAGNER / Managing Editor

COLUMBIANA – Shelby County’s engineer said the changes recently enacted in the state’s gas tax increase will give the county much more flexibility and freedom in the road projects it can fund, and said the county will be held to strict accountability standards for how it uses those funds.

During a March 25 County Commission meeting, Shelby County Engineer Randy Cole gave commissioners an update on the gas tax increase, which was approved by the Alabama Senate and signed by Alabama Gov. Kay Ivey on March 10. The Alabama House of Representatives approved the tax increase on March 8.

The commission approved a resolution during its March 11 meeting supporting the gas tax increase.

As a result of the gas tax hike, taxes will rise by 6 cents beginning this September, and will rise by 2 cents on Oct. 1, 2020, and by another 2 cents on Oct. 1, 2021. Alabama’s current state tax on gas is 18 cents, and is 19 cents on diesel, both of which have been the same since 1992.

Sixty-seven percent of the money generated through the state gas taxes will be earmarked for the Alabama Department of Transportation, 25 percent will be earmarked for counties and 8 percent will be earmarked for cities. Most of the county and city funding will be distributed based on population.

Shelby County will get about $2.3 million each year in highway funding once the tax increases are fully implemented.

Cole said one of the biggest changes will be related to the federal highway funding the county currently receives each year. For the past several years, the county has received about $533,000 each year in federal funding. Through the changes approved in the gas tax increase, the county will now receive about $400,000 each year directly from the Alabama Department of Transportation.

Cole said the county received only about $460,000 of the $533,000 in federal funding each year due to administrative fees, and said the federal money came with “many strings attached.”

“We’re really going to come out ahead by getting $400,000 from ALDOT. We’ll be able to shake the chains of bondage of federal aid,” Cole said. “Projects will now be done faster and more efficiently.”

Shelby County will be required to release a public document each year listing what it intends to do with its highway funding, and will give follow-up reports to the Alabama Senate to explain what projects it completed with the highway funding the previous year, Cole said.