Alabama drivers will see a 10-cent per gallon increase in the state gas tax to fund road and bridge construction, under legislation signed into law Tuesday by Alabama Gov. Kay Ivey. Ivey signed the bill, and related measures into law, shortly after they won final approval in the Alabama Legislature. The swift legislative approval was a political victory for Ivey, who called lawmakers into special session to consider the tax increase, and for Republican legislative leaders who also threw their support behind the bill.
The gas tax increase will be phased in over three years, beginning with an increase of six cents later this year. The state tax would then be adjusted up or down with the National Highway Construction Cost Index and could increase up to a penny every two years. The proposal would also place an annual $200 fee on electric vehicles and a $100 annual fee on hybrid vehicles. The bill also sets aside $11.7 million of the revenue to be used for a bond issue for improvements at the Port of Mobile.