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Increases in the state's gas tax passed through the Rebuild Alabama Act raised nearly $24 million, or 7.5%, more than expected in revenue during the last fiscal year.

According to state revenue totals, Rebuild Alabama revenue was slightly over $344 million for fiscal year 2022, ending on September 30. 

Fiscal year 2022 was the first year drivers in Alabama paid the full 10-cent tax increase when filling up at the pump. 

Proponents of the act initially estimated revenue from the tax increase to be around $320 million annually once it was fully implemented. 

According to the Department of Revenue, the 10-cent gas tax increase from the Rebuild Alabama Act was phased in over roughly two years. Gasoline and diesel taxes increased by six cents on Sept. 1, 2019, by two cents on Oct. 1, 2020, and another two cents on Oct. 1, 2021.

Under the Rebuild Alabama Act, the gas and diesel tax rate will be indexed to the percentage change in the yearly average of the National Highway Construction Cost Index beginning on Oct. 1, 2023, and every other year after on July 1.

Under the law, an increase or decrease in the tax rate would be rounded to the nearest whole cent and capped at a one-cent change either way, depending on whether the previous calendar year's index average was higher or lower than the 2020 base year's average.

Sixty-seven percent of net revenue from the new tax goes toward the state's Department of Transportation for infrastructure projects, preservation, and maintenance. Twenty-five percent of the proceeds go to counties, and 8% goes to municipalities for infrastructure projects, preservation and maintenance.

Ivey said in September that she's "incredibly proud that Rebuild Alabama has now made road and bridge projects possible in all of our state's 67 counties." 

"Three years ago, I promised the people of Alabama that every single penny would go to road and bridge projects, and we are seeing that the proof is in the pudding," Ivey said. "This is a remarkable milestone for our state, and I look forward to furthering these efforts to make Alabama a better place to live, work and raise a family."

At least some of the spending from the tax hike has drawn the ire of legislators. State Sen. Chris Elliott (R-Josephine) said recently that the West Alabama Corridor Project to connect Thomasville to Tuscaloosa with a four-lane road "doesn't make any sense ."

A spokesperson for Gov. Kay Ivey didn't return a request for comment from 1819 News.

FY 2022 Revenue Totals by Caleb Taylor on Scribd

To connect with the author of this story, or to comment, email caleb.taylor@1819News.com.

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