MOBILE, Ala. — State lawmakers have no power to stop the tolls coming to the new Mobile River Bridge and the reconfigured Interstate 10 Bayway. But a Baldwin County senator thinks the Legislature can do the next best thing: create a toll tax credit that gives Alabama drivers their money back at tax time.
State Sen. Chris Elliott (R-Josephine) has drafted legislation that would put that credit on state income tax returns. Alabama residents and most businesses could claim a dollar-for-dollar credit equal to what they spent on tolls on I-10 and the Bayway during the previous year, and they would get the full amount back even if their toll bill was larger than their state income tax bill.
“I think it’s the least we can do for the residents of coastal Alabama,” Elliott said.
How the credit would work
Under the draft bill, a driver would need to meet three conditions to qualify:
- Live in Alabama
- File a state income tax return
- Have an ALGO transponder
A dollar-for-dollar credit is more generous than a deduction. A deduction lowers the amount of income that is taxed, so it returns only a fraction of the money spent. A credit comes straight off the tax owed. Because Elliott’s version would pay out the full toll amount even when it exceeds a filer’s tax liability, it would function as a refund of tolls paid through the state tax system.
Taxpayers who cross only a few times a year could still claim what they paid, but Elliott said he expects regular commuters to be the ones most likely to use it. He estimated that about 20,000 people will buy monthly passes. Using that number, he projects the credit would cost the state about $15 million a year, money that would come out of the Education Trust Fund budget. Elliott said that is a tiny share of the budget.
The draft includes a five-year sunset. Elliott said that is required by a state law mandating sunset clauses on tax breaks, though he said his goal is to find a way to make the credit permanent. The law also requires a cap on what a tax break can cost the state. The draft sets that cap at $15 million a year, and Elliott said he hopes to get more precise numbers from the Alabama Department of Transportation.
The toll plan that prompted the bill
For years, local transportation planners said toll rates on the new crossing would stay fixed, first at $2.50 per trip for passenger vehicles with ALGO transponders and later at $3. Last week, it was reported that ALDOT had agreed to automatic annual rate increases as a condition of borrowing billions of dollars to build the project.
Bond documents show the increases would take effect every Jan. 1. For the first 10 years after tolling begins, rates would rise by 5% or by the inflation rate for Southern urban consumers, whichever is higher. After that, the base adjustment drops to 2.5%, with the inflation rate applying if it is higher. ALDOT has defended the approach, saying a multibillion-dollar project financed over decades could not realistically be paid for on the assumption that toll rates would stay frozen.
For a standard passenger vehicle, ALDOT has listed these opening rates:
- ALGOpass monthly unlimited plan: $60 per month
- ALGOpass per trip: $3
- Compatible transponder from another toll agency: $7.70
- Pay-by-plate, with no transponder: $15.40
The $60 monthly pass, which grants unlimited use of the bridge and Bayway, is the one rate that will not change for 10 years. Tolling is not expected to start until the new bridge opens, around 2031. The Causeway, the Wallace Tunnel, the Bankhead Tunnel and the Africatown Bridge will remain toll-free.
‘Just to go to work’
Even with the monthly price frozen, Elliott said the pass will cost a commuter $720 a year, and that is a significant expense for a Baldwin County resident earning the median income.
“That’s almost a 25 percent increase in their total income tax liability – just to go to work,” he said. “And so, my goal here is to is to say, you know, for residents that are utilizing this on a day-in and day-out basis and are paying that $720 a year, let’s put that money back in their pocket, so we’re not double-taxing them.”
Elliott said most of the bridge’s cost should be borne by the drivers least affected by tolls.
“Our visitors that are coming to the beaches, those who are just passing through, I have no problem putting the cost on them,” he said. “I just – it’s my job to protect my constituents and those folks that I represent that are just trying to get back and forth to work.”
Not his first try
The idea is not new for Elliott. He offered a similar proposal in 2019, when an earlier plan to build a bridge was on the table. That plan collapsed that year amid a public revolt over tolls, after the local metropolitan planning organizations voted to remove the project from their plans.
Elliott, who was first elected to the state Senate in 2018 and represents District 32, previously chaired the Baldwin County Commission and the Eastern Shore Metropolitan Planning Organization. He has been one of the most vocal voices on the corridor for years. Earlier this month, he backed ALDOT’s plan to restripe the existing Bayway to carry six lanes, calling an entirely new elevated span something the state could not afford.
The current project, with a design and construction cost of $3.2 billion and a Phase One budget ALDOT now puts at about $4.15 billion, includes a six-lane cable-stayed bridge over the Mobile River and restriping of the 7.5-mile Bayway. It is financed in part by a federal Transportation Infrastructure Finance and Innovation Act loan of up to $2.52 billion, which tolls will help repay. ALDOT expects construction to begin Oct. 1.
Local reaction and the House race
Many residents of Mobile and Baldwin counties still oppose tolling the new bridge at all.
“(People) pay enough in tax and gas prices, food prices, so just another added expense to families barely getting by these days,” said Pat Sanchez, who was filling up his tank in Mobile on Wednesday.
Sanchez was not fully convinced by the tax credit, either, questioning the wait between paying tolls and getting the money back.
“So they’re gonna hold your money 12 months?” he said.
Elliott already has a potential partner in the House. Danielle Duggar, the Republican nominee for the Eastern Shore’s House District 96 seat, has agreed to carry the bill in the lower chamber if she wins in November. “In a perfect world,” she said, local residents should be exempt from tolls, but she said a tax credit would “put money back into the people’s pockets.”
Her Democratic opponent, Terri Osborne, said she supports the idea as well. Osborne said “local residents should get an exemption.” The general election is Nov. 3.
An uncertain path in Montgomery
The bill’s prospects are unclear. A tax break that would mostly benefit residents of Alabama’s two southernmost counties, paid for out of the statewide education budget, could be a hard sell to lawmakers from the rest of the state. Elliott said he is hopeful anyway, and he argued the measure could have value beyond the Gulf Coast.
“If you end up running into a similar type of funding mechanism for a road project in the Huntsville area or Birmingham area or something like that, then this legislation could be used to offset that cost, as well,” he said.
The bill is still a draft and would have to be filed and passed during a future legislative session. Because tolls are not expected to be charged until the bridge opens around 2031, drivers would see no effect from the credit until tolling begins.