You aren’t paying the county gas tax. So who is?

Heading into next week’s Alabama Primary on Tuesday, March 1, St. Clair County’s 4-cent gas tax remains one of the leading issues for candidates.

Incumbents in the race, Place 3 Commissioner Tommy Bowers and Place 4 Commissioner Jimmy Roberts, defend the tax they voted for in 2015, saying it’s affect on local drivers is marginal, and it will result in better roads across St. Clair County.

Their opponents, Place 3 Challenger Stan Batemon and Place 4 Challenger Mack Abercrombie, believe the tax is unnecessary and could even be harmful.

 


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To most residents though, the tax is something that legitimately hasn’t affected them. They don’t notice it because they aren’t the ones paying it. That responsibility appears to fall on the shoulders of local gas station owners.

“It’s literally destroying our profitability,” said Wade Reich, owner of the Texaco Butts To Go station on US 231 in Pell City.

Because prices in the fuel market are so volatile and competitive, sometimes smaller stations lose money on the gas in their tanks. They purchase it from distributors at a certain rate, and that number is fixed once it’s in the ground.

However, gas prices above ground are changed almost every day. So, when the market price is above the cost of what a station paid, it profits. When it drops below, it takes a loss.

Adding four more pennies per gallon wouldn’t be a big deal if these stations could simply raise the price. But that’s where competition comes in.

Stations like Love’s Travel Stop in Brompton can rely on volume to offset loss. So, when the Pilot in Talladega County drops its price, Love’s does, too. Reich can’t always keep up though, because the gas he has in the ground cost him a certain amount, so he watches his customers drive past him out to I-20 for the cheaper rates.

“In the seven months since the tax was passed, I’ve only been able to pass the increase on to my customers for maybe six or eight weeks,” Reich said. “The rest of the time, I haven’t been able to maintain normal margins.”

Simply – competition is forcing local stations to pay the majority of the tax, not local drivers. But the Commission wasn’t expecting drivers to pay it from the onset.

Commissioner Tommy Bowers said when he was considering the tax last year, he was undecided on its necessity. He reached out to former fuel station owner and distributor Barnett Lawley. Lawley told Bowers that the tax probably wouldn’t cost the people of St. Clair County much – if anything.

“The people of St. Clair are not going to be penalized because gas stations have to be competitive,” Lawley said this week. “The tax is spread between a lot of different places and people.”

Lawley figured then that about 30 percent of the tax revenues collected would come from out-of-county drivers stopping at interstate stations. “It’s a rule of thumb in the industry,” he said of the calculation, but a specific study was not readily located.

With non-locals supposedly footing a third of the bill for resurfacing projects in the county, the burden would be less on local residents. But Lawley said he told Bowers then that competition would prevent drivers from even feeling it. This is obvious, as St. Clair’s rates are the eighth-lowest in the state and remain very close to, if not lower than, surrounding counties.

Lawley said fuel was a logical area to tax if the County needed the money, and he believes infrastructure projects are a valid reason to implement it.

“To me, I’d rather have [the tax] where it can be shared by a number of people and businesses, instead of adding something like a sales tax that everyone has to pay,” he said.

As candidates have debated the impact of the tax on local residents, several figures have surfaced as to how much extra each St. Clair driver would pay per year. These figures were derived from numerous reports and studies, and due to the volatility of the market they should not be considered scientific. The News-Aegis calculated figures between $6-$75 based on different reports from universities and the U.S. Energy Information Administration.

(Editor’s note: We aren’t advocating any of those figures as fact and as such will not be releasing those calculations.)

In Fiscal Year 2016, the 4-cent gas tax is expected to add more than $3 million to a Commission fund that will go exclusively to resurfacing projects across the county and provide for new equipment purchases. Distributors are passing the tax on to some stations, and those stations are sometimes able to pass it on to drivers.

If prices in St. Clair continue to be competitive with prices in Talladega, Jefferson and Shelby Counties, it should be assumed that a significant portion of that $3 million will be paid by reducing profit margins at fuel stations in the county, not out of drivers’ pockets.

So, for the average resident, that means this tax will provide new blacktop for some of their commutes without even being noticed.

Roads that will be paid this year using the Local Gas Tax Money

Rabbit Branch

River Road

St. Clair Shores Area

Mount Moriah Road

Camp Winnataska Road

Kelly Creek Rd. (From Park Ave. to Kerr Road)

Washington Valley Road

Village Springs Road

 

Roads that were paved last fall using the Local Gas Tax

Tunnel Mountain Road

Hazelwood Drive

Wolf Creek Road N

Cook Springs Road

Stuart Drive

Shoal Creek Road ( From CR 21 East)

 

Roads are ATRIP projects that have been let to bid or will be soon and the Local Gas Tax is paying the local match portion of the project

Bridge on Rivercrest Drive

CR 26 (Ashville End)

Double Bridge Road

Old Coal City Road

 

Equipment that has been or will be purchased with the Local Gas Tax

Hot Mix Spreader

Double Drum Roller

Cold Planer Attachment

– Submitted by County Engineer Dan Dalhke

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