Goat Hill Report-Special Session & Gas Tax Update

Goat Hill Report for March 6, 2019      

The 2019 legislative session began yesterday at noon and quickly adjourned awaiting Governor Ivey’s State of the State address Tuesday evening. As expected, Governor Ivey emphasized the importance of finally addressing Alabama’s crumbling infrastructure during the speech. She also added she was willing to call a special session if needed to address the issue.

Shortly after 8 pm, the Governor decided to exercise her authority and call a special session to address the Rebuild Alabama Act and the companion accountability legislation. To casual observers, this might make you scratch your head, but in the halls of the legislature today the call was highly expected. Tackling the gas tax legislation during the special session removes the hurdle of the budget isolation request (BIR) required in the normal session. The BIR requires 3/5 of the legislators to vote in favor to take up a bill. In the House this is 63 votes, and in the Senate 21 yay votes. A much larger hurdle to pass on a hot button subject such as raising taxes.

The House and the Senate will reconvene today to begin consideration of the gas tax. As drafted, the legislation raises the diesel and gas tax $.06 in 2019, $.02 in 2020 and $.02 in 2021. The legislation also includes a provision for the tax to rise up to $.01 every two years beginning in 2023. A companion bill to the gas tax helps to provide accountability to the new tax revenue. The accountability aspect is designed to provide legislators and the public confidence the money will be spent as designed and efficiently.

Legislative rules state it takes at minimum five days to pass a bill, which would run until Sunday if the legislators stay in town the rest of the week as discussed. The Senate and House have adjourned from the normal session until March 19th so in theory they could meet on a more traditional schedule than the rush session.

In respect to how things will go, an honest assessment is you just never know in a conservative state like Alabama. Nearly everyone admits infrastructure has to be addressed, but voting yes on a tax increase is not a natural act in Alabama. The Governor, Senate Pro Tem Del Marsh, and Speaker Mac McCutcheon have provided tremendous leadership on the issue and hopefully will pull the team across the finish line. With more than half of Alabama’s 16,000 bridges being at least 50-years old, the question isn’t if but when will we have a day of reckoning.

Infrastructure is also tantamount to securing additional large scale businesses to Alabama. With these large commercial projects, come more retail and housing for new workers. This is the lifeline of the concrete industry and the recent yardage growth Alabama has enjoyed for the last five years.

We typically write the Goat Hill Report at the end of the week, but with this year’s Special Session, we will send out pertinent information as it happens to keep the membership up-to-date.

For any questions about this report, please contact our office.

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