FAIRHOPE, Ala. (WALA) — Alabama residents forced to pay a toll as part of a planned new crossing between Mobile and Baldwin County could get their money back at tax time, under a bill sponsored by a local lawmaker.
State Sen. Chris Elliott (R-Daphne) has pre-filed a bill for next year’s legislative session that would create a tax credit for any state resident who pays tolls on a state-owned project. Currently, that would apply only to the Interstate 10 bridge and new Bayway slated to open in 2025.
It would not apply to private roads and bridges like the bridge at the end of the Foley Beach Express.
Elliott said he continues to believe the state should find a way to avoid tolls in the I-10 bridge and Bayway project.
“Failing that, and if they choose to move forward, we wanted to have a Plan B,” he told reporters Monday.
Under Elliott’s legislation, state residents could claim a dollar-for-dollar credit for tolls they pay. Like the child tax credit, it would not simply be a deduction that would lower the tax burden; it would be money that comes straight off of income taxes.
So, a driver purchasing a $90 monthly pass pitched by Alabama Department of Transportation, could reduce his income tax payment and increase his refund by $1,080. Importantly, Elliott said, even taxpayers whose toll bite is more than they pay in state income taxes could claim the full amount.
So, a commuter whose state income tax burden is only $500 would still get the entire $1,080 refunded.
“One of the things I’m concerned about is the working poor and even the middle class,” Elliott said.
An income tax credit would reduce revenue to the Education Trust Fund. Elliott estimates it could total $25 million, based on projections of the number of commuters.
Using oil, gas funds
To prevent that hit, Elliott’s bill calls for revenue to be transferred to the Education Trust Fund from an account funded by oil and gas leases in the Gulf of Mexico in federal waters. In fiscal year 2019, the state of Alabama received almost $25.5 million under the the Gulf of Mexico Energy Security Act, or GOMESA, and Mobile and Baldwin counties collectively got another $6.1 million.
Elliott said he believes that is more than enough to pay the void created by the tax credit. He argued it would mitigate concerns from lawmakers in other parts of the state.
“The feedback I’m getting back from my colleagues in the Legislature so far is pretty good,” he said.
The bill, however, would reduce money available for conservation and environmental projects that are the intended use of the funds. Although Congress passed the revenue-sharing law in 2006, it did not generate a great deal of money until recently.
Jeremiah Kolb, a planner with the Alabama Department of Conservation and Natural Resources, said the agency in January accepted grant proposals for the first time and got almost 60 responses. He said those are going through the approval process now. Gov. Kay Ivey in May gave initial approval to 15, including a proposal to build a boat launch in Orange Beach.
Kolb told FOX10 News that it is difficult to predict whether GOMESA will deliver a similar amount of money in future years.
“I wouldn’t call it a sure thing,” he said. “It could go away at some point.”
State Sen. Arthur Orr (R-Decatur), who is chairman of the Senate education budget committee, expressed apprehension.
“We would be covering new ground, for sure,” he said.
Orr said the state would need to ensure that the GOMESA fund is steady and reliable enough over the long haul.
“We’d have to kick those tires pretty closely on a proposal like this because you always have to think down the road,” he said.
Orr said he worries about the precedent Elliott’s bill might set to mitigate future toll roads — even in cases where there is no ready source of alternate funds like GOMESA.
“Are we literally going to be taking money from schoolchildren?” he said.
Ivey, through a spokeswoman, suggested Elliott’s bill is premature.
“Before we talk about a hypothetical tax credit to offset a toll which is in the conceptual stage, we must first make a decision on how to move the Mobile River Bridge project forward,” press secretary Gina Maiola said in a statement. “The governor’s focus remains on deliberating with all stakeholders to ensure this project becomes a reality. This bridge is needed for commerce, efficiency and public safety.”
Elliott’s proposal has divided toll opponents. State Auditor Jim Zeigler, whose “Block the Mobile Bayway Toll” Facebook page has roughly 35,000 members, told reporters Monday that passing the tax credit would make it easier for state officials to sell the toll plan.
“My position and that of our group is that we are against any toll,” he said. “We are for no toll.”
But Lou Campomenosi, president of the tea party group Common Sense Campaign, said Elliott’s plan is a good idea as a “last resort” if there is no other way to stop tolling.
“It takes the sting out of it,” he said.
With the number of tolls across the country proliferating, along with the price, the idea of giving tax breaks to commuters has been kicked around in other states.
Last week, for instance, a pair of legislators from the Philadelphia suburbs introduced a bill in the Pennsylvania legislature to give a 50 percent tax credit to residents and small businesses that pays tolls on the Pennsylvania Turnpike and several bridges. The credit would cover up to $500 a year.
In Connecticut, Gov. Ned Lamont has suggested a 20 percent toll credit to people make less than $32,000 a year.
A New Jersey legislator in the 2018-2019 legislative sessions introduced legislation to give an income tax credit to anyone who spend more than $1,000 a year on E-Z Pass tolls.