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RESOURCE CENTER AND ARCHIVES

Time to Think About Alabama’s Highway Investmentscomment (0)

August 22, 2013

By Jim Williams


Taxes on gasoline and diesel fuel are the main sources of money for building and maintaining the state’s roads and bridges. The State of Alabama last raised its fuel tax rates in 1992. A number of highway improvements have been achieved in the years since, but the purchasing power of transportation dollars has eroded. Projections by the Alabama Department of Transportation (ALDOT) indicate that it is time to consider the options available to maintain and improve the state’s transportation assets.

Since 1992, the state’s highway system has absorbed a 33 percent rise in the intensity of travel. More than 20,000 lane-miles have been added to road capacity. The level of bridges classified as substandard has dropped from 37 to 23 percent. Roads rated rough have declined, while roads rated smooth have increased. The number of highway fatalities has fallen by 17 percent.

However, a number of factors have combined to reduce the purchasing power of highway finances. Fuel taxes are collected on a per-gallon basis, and while the volume of travel has increased, so has automotive fuel economy. Furthermore, the costs of constructing and maintaining roads have risen with oil prices, but highway tax revenue does not respond to increasing fuel prices. The result has been fewer tax dollars, in relation not only to wear and tear on the roads but also to the cost of roadwork. The Legislature also has diverted highway funds to other state services due to the recession.  

The negative trends have been masked temporarily because of state borrowing for highway projects, which increases current expenditures but pledges future revenues for debt repayment. Federal stimulus funds for highway resurfacing also have been available. 

ALDOT has a five-year plan that projects the ability to finance road improvements. It estimates that existing revenue sources can provide for the routine maintenance, bridge replacement and repaving needed to sustain current highway conditions in the years ahead. However, ALDOT will have a very limited ability to finance additional highway capacity. The department has identified key projects that can be built within its constraints, but many long-sought improvements are not included.    

Alabama is not alone in facing this dilemma. Congress must deal with a deficit in the federal highway trust fund, and a number of states have acted to raise fuel taxes or link them to prices. It is time for our state to consider the future direction of its highway investments. 

EDITOR’S NOTE — Jim Williams is executive director for the nonprofit, nonpartisan Public Affairs Research Council of Alabama. Jim may be contacted at jwwillia@samford.edu.

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