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COVID-19 pandemic impacts Alabama’s gas tax

Alabama’s gas tax collections took a hit due to the COVID-19 pandemic and state leaders were worried they wouldn’t generate enough money to fund planned road improvements.

The 2019 Rebuild Alabama Act will increase the state gas tax a total of 10 cents by 2021; a portion of the new revenue goes to the state, counties, and cities.

Because the COVID-19 pandemic affected travel when the state shut down in March causing fewer folks to fill up their gas tanks, April took a financial hit. In May, the state’s gas tax collections dipped by about $2.5 million.

By law, local governments must submit plans for road improvement projects a year in advance.

Sonny Brasfield, executive director of the Association of County Commissions of Alabama, said they were worried the tax wouldn’t generate enough money to fund projects.

“We’re probably going to do about 90% of the work that had been estimated. That’s still an amazing amount of construction. Especially when you look at the previous year. Our projections were that we’d do about 140% more roadwork and 60% more bridge replacement than normal. So, we’re still on pace to have an excellent year for sure,” said Brasfield.

Brasfield said lower gas prices helped ease the impact of the gas tax on consumer wallets.

In Covington County, county engineer Lynn Ralls said as of Aug. 24, the county has received $428,264.44.

“We should receive payments on Sept. 10 for August and October 10 for September estimated at $43,500,” Ralls said. “Estimates were $571K, so we were off by about 10 percent. It is not bad at all considering COVID-19.”

The gas tax will increase by $0.02 in October then another $0.02 in 2021.