ALDOT Statewide TSMO Strategic Plan ALDOT Statewide TSMO Strategic Plan 20190522 | Page 10

The Gas Excise and Motor Fuel tax makes up a considerable amount of the state’s portion of
transportation funds; however, Alabama is among the lowest in state gas taxes for both conventional
and diesel fuels. As of July 2018, Alabama’s gas tax was 20.91 cents per gallon, compared to the national
average of 30.54 cents. The State has not increased the gas tax since 1992, with the most recent
referendum this year not passing. However, this issue has gained momentum and is being considered
during the 2019 legislative session. (Note: as of 3/12/2019, the State of Alabama legislature passed an
increase in the gas tax by 10 cents per gallon by 2021).
There has been a steady decline in Motor Fuel Tax Revenues over the last two decades, made more
dramatic if adjusting for inflation. While there has been a decline in revenues to support transportation
infrastructure, there also have been dramatic increases in the use of this infrastructure. For example,
between 1990 and 2015, the usage of Alabama’s roads increased by more than 25 billion VMTs.
Low tax revenue on gas is only one part of the funding issue. Cars also are rapidly becoming more fuel
efficient, decreasing the need for fuel. Beyond stagnant gas taxes in Alabama, the decreased dependence
on motor fuels due to increased fuel efficiencies has decreased revenues despite increasing costs and
congestion. So, at the same time we’re witnessing greater usage of infrastructure while the gas tax has
not increased, vehicles are becoming more efficient at how they use fuel, furthering the gap between
revenue and need.
Figure 5: Toyota Camry (left) and Ford F-150 Fuel Efficiency (Plungis, 2018)
Many predictions forecast an imminent change in how DOTs approach funding transportation
infrastructure improvements, with a total move away from gas taxes in as soon as a decade. A major focus
in the transportation funding world now is collaboration and funding partnerships, which are some of the
core components of TSMO strategies.
Alabama is dependent upon the gas tax for transportation funding. Alabama has not increased
the gas tax since 1992. Vehicles are rapidly becoming more fuel efficient. Alabamians have a
serious challenge.
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