MOBILE, ALA. (WALA) -- If you're thinking about taking a last minute summer vacation, it's going to cost you more at the pump. A new tax on gas in Alabama is on its way to a station near you. It's called the Rebuild Alabama Act.
Starting Sunday, there will be a $.06 increase on a gallon of gas. You’ll shell out more money at the pump to pay for better roads in our state. Not everyone is on board.
A half mile off Interstate 10 in Baldwin County, people are filling up at the Malbis Shell gas station. It’s one of three stations owned by Kevin Spriggs. He says an extra $.10 a gallon gas tax could threaten his bottom line.
Spriggs said, "Anytime you increase taxes, that money comes from somewhere so the higher the gas prices is out front, the less they buy inside so our profitability depends on how much they buy inside."
The $.10 won't be added all at once. Sunday, it starts at $.06 more at the pump. In 2020, an additional $.02 will be added then a final $.02 cents in 2021. Bringing the total state tax on gas in Alabama from $.18 per gallon to $.28.
Calculate how much more money a year you will be spending on gas once the $.10 tax is fully phased in in 2021:
So how much more money will you spend on gas annually? Take a 2017 Mazda CX5 SUV. It gets about 25 miles per gallon. If you drive the state average of about 16,000 miles a year, that works out to an additional $64 a year, or about $5.33 a month.
Drew Harrell with the Business Council of Alabama likens the monthly increase to a cup of coffee. A small price to pay, he says, for the greater good.
"At its full implementation when the $.10 per gallon is concluded by 2021, that will give the states, counties and cities about $320M in additional funding for roads and bridges which will have over the next 20 years a $15 Billion economic impact in our state," Harrell said.
According to TRIP, a National Transportation Research group, that money is needed.
The study found that Alabamians are losing $5.3 billion dollars each year as a result of driving on deficient roadways.
In a 2015 report, the American Society of Civil Engineers gave Alabama’s infrastructure a C- which is better than Mississippi and Louisiana’s D+ plus, but worse than neighboring Florida and Georgia.
"It's going to have a huge impact at the local level with cities and counties who have issues as far as repaving their roads, keeping them maintained and at the state level it will allow us to relieve some congestion at some of these main corridors that have a lot of trucker/commuting traffic."
The $.10 increase won't be the end for gas taxes in Alabama. The new law taking effect on Sunday allows for the gas tax to automatically increase beginning in 2023 according to a formula called the National Highway Construction Cost Index. That increase will be up to a penny each year.
That's what worries Kevin Spriggs.
"It's indexed according to some kind of inflation rule and it's really bad because we want our elected official to be accountable for the taxes that are raised and spent and this way they can just say oh well it automatically goes up and we can't do anything about it," Spriggs said.
We asked Alabama drivers about it.
“I think it's good if it's going to fix up some of these streets,” Astie Rayford said.
Others hope filling up their tank won't leave their pockets on E.
Another driver said, "You can't make a living at home so unfortunately I'm going to have to drive either way. I'll just have to have a little more out of my wallet."
“It's bad news that we have to pay more for gas when you account that so many people can't afford that tax,” said Donna Henderson.
As it currently stands, Alabama's gas tax is on the lower end. It ranks 41st nationally. Alabama joins Arkansas, Illinois, Ohio and Virginia in increasing state taxes on gas this year.
Besides going toward better roads, the money from the gas tax will also be put toward the Port of Mobile to deepen and widen the Mobile Shipping Channel. The project will deepen the Mobile Shipping Channel to 50 feet in most locations, allowing for bigger ships. The project will cost $400 million, $250 million comes from the federal government while the gas tax will pick up the remaining tab.