As state lawmakers prepare to consider a gas tax increase during the next legislative session, a new report from the Public Affairs Research Council shows Alabama’s state and local governments collect less in taxes per capita than any other state in the country.
While Alabama has avoided passing general tax increases, it has turned to selective sales taxes. Alabama ranks high in per capita collections on alcoholic drinks (No. 3 in the U.S.) and on public utilities (No. 5) in the U.S.
Alabama has been behind in tax collection since the early 1990s, according to the Public Affairs Research Council of Alabama, which has produced an analysis of Alabama’s tax revenues since 1988.
In Alabama, the gas tax hasn’t been increased since 1992, when lawmakers added 5 cents to the gallon, and the state ranks 35th in per capita state and local collections on motor fuel.
It isn’t just the gas tax that hasn’t really been adjusted in years.
Alabama’s low taxes — while they may be a positive for your pocketbook — are often the single largest contributor to near-perpetual budget crises in Montgomery, placing a significant barrier for lawmakers as they balance the two state budgets every year. It’s a constitutionally mandated requirement.