BRADENTON, Fla. - For Alabama's Legislature, 2017 could be a bellwether year for competing major infrastructure bond programs and controversial gambling proposals.
During the regular session, which starts Feb. 7, a county association plans to request a $1.2 billion bond program for transportation projects that depends on convincing lawmakers to increase the gas tax for the first time in more than two decades.
Gov. Robert Bentley is considering calling lawmakers back to Montgomery for a special session before Feb. 7 to once again consider his $800 million general obligation bond program to replace outdated and overcrowded state prisons.
Bentley proposed the prison plan during the 2016 legislative session, but it failed to pass amid lawmakers' questions about the additional debt and lack of detail about the construction plan.
Two lawmakers have pre-filed potentially contentious bills that would send two constitutional amendments to voters creating a state lottery and authorizing a tribal gambling compact – both of which would bring in new revenue for the cash-strapped state budget.
Bentley sought a similar bill during a special session earlier this year as a way to support the state's underfunded Medicaid program and raise funds for other state priorities. It did not pass.
Sonny Brasfield, executive director of the Association of County Commissions of Alabama, said there cities and counties desperately need money for transportation projects.
"Alabama's roads and bridges have consistently been rated among the poorest in the nation," Brasfield said. "We have hundreds of county bridges that are detoured by school buses every day in our state. Alabama's rural road fatality rate is among the worst in the nation. And I could go on."
ACCA members voted Dec. 8 to ask the Legislature to implement a $1.2 billion revenue bond program, an initiative that could be the largest borrowing proposal during the regular session.
The bonds would be supported by a 3-cent-per-gallon increase in the state's fuel tax that would be charged only as long as the bonds are outstanding, according to the proposal.
Alabama's gas tax is currently 18 cents per gallon. It was last increased from 13 cents to 18 cents in 1992.
Lawmakers rejected a similar ACCA plan during the 2016 legislative session with one difference: it sought a permanent 6-cent-per-gallon gas tax hike to finance local roads and bridges.
The ACCA director said the proposal to be advanced next year will be different.
"We have learned from that [previous] experience," Brasfield said. "This approach focuses on several issues that we believe to be important to legislators."
Instead of a permanent gas tax increase, the ACCA plan "will allow for significant infrastructure investment in the shortest time frame," Brasfield said.
The gas tax increase would only be levied as long as it is necessary to pay debt service and possibly one year longer to provide all 67 counties at least $10 million for improvements. A portion of the revenue would be shared with municipalities.
The bonds are expected to be repaid in about 14 years.
Brasfield also said the legislation will include accountability measures to ensure there is transparency about the projects selected for funding and to ensure accountability for the use of bond proceeds, which cannot be spent for salaries, purchasing equipment, or funding anything other than direct construction costs.
The bill, which is still in drafting form, will be introduced early in the 2017 regular session.
The ACCA proposal builds on the recently completed Alabama Transportation Rehabilitation and Improvement Program, an initiative backed by the governor.
The state used the ATRIP to issue $1 billion of grant anticipation revenue vehicle bonds between 2012 and 2015 to fund more than 1,000 local road and bridge projects.
Those projects had to meet federal eligibility standards to receive funding under the Garvee bond program. Cities and counties also were required to provide matching funds to participate.
"We believe it is important to continue the momentum," Brasfield said of the ATRIP. "The continued economic benefit of maintaining this construction initiative is also very important to the citizens of Alabama."
The ACCA bond plan, which it is calling ATRIP-2, would be funded solely with state revenues from the 3-cent gas tax increase and would finance local roads and bridges that were not eligible for the governor's program.
Brasfield said the governor's staff has received information about ATRIP-2, and meetings have been scheduled with various legislators.
With competing programs before legislators next year, Brasfield said it is essential for the public support ATRIP-2.
"We are planning 'listening' meetings in all counties so that the public can provide input on the most efficient expenditure of the bond proceeds," he said. "We believe the public will embrace this plan and will communicate its support directly to the legislators."
A number of states with backlogged infrastructure needs are being urged to consider financing initiatives in 2017.
Outgoing Republican North Carolina Gov. Pat McCrory last week released his budget proposal, as required by state law, for Democratic Gov.-elect Roy Cooper to consider next year.
"My recommended budget supports a future transportation bond of over $1 billion that will anticipate and prepare for future road needs," McCrory said in
McCrory, who did not immediately make budget documents available, spearheaded the $2 billion Connect NC general obligation bond program, which initially included $1 billion for transportation and $1 billion for state infrastructure projects.
North Carolina lawmakers stripped $1 billion from the Connect NC bill that would have funded transportation projects. The remaining $1 billion was approved by voters in March 2016.
The state issued the first $200 million of Connect NC bonds in July.
The Ohio Municipal League released a
The league proposed the restoration of millions in state-revenue sharing dollars that were cut from 3.7% in 2007 to 1.7% this year, along with other taxes, in response to the recession.
A 10% increase in Ohio's current 28-cent-per-gallon motor vehicle fuel tax was also proposed to address a $5.6 billion backlog in transportation projects. The tax increase would generate an additional $600 million per year, a portion of which could be shared with local governments, the league's report said.
The league also suggested the creation of the State/Local Infrastructure Study Commission to examine what size of a bond program would be necessary to address non-transportation related infrastructure needs, including local clean water and wastewater programs.
The Michigan Infrastructure & Transportation Association has launched a campaign to educate lawmakers and state residents about the severity of capital underfunding that resulted from years of inaction to raise necessary funds, the group said.
A recent report commissioned by Gov. Rick Snyder said Michigan is underinvesting in infrastructure by about $4 billion per year. It also says bond financing may be an option to pay for high-priority needs, along with other revenue-raising measures such as increasing vehicle registration fees and gas taxes.
In May 2015 Michigan voters soundly defeated a sales tax increase to fund road work, though lawmakers later that year passed a $1.2 billion annual funding package partly funded through higher gas taxes and vehicle registration fees.
Lawmakers in Tennessee, Louisiana, and Indiana may also consider gas tax increases and other fees in 2017.
