Photos by Jon Anderson.
A gasoline pump at the Shell station at the corner of U.S. 280 and Shelby County 47 in Chelsea shows a $75.33 purchase on Friday, June 5, 2026.
City leaders in Chelsea are eyeing a new gasoline tax as a potential way to help fund city government, but no decisions had been made as of mid-June.
Mayor Cody Sumners said the discussion came about because of the lack of funding for infrastructure projects.
“There are major needed infrastructure projects in the city that directly impact our citizens and their safety, but currently the funding that we get from the state for those projects is miniscule compared to the costs,” Sumners said.
The city currently receives about $180,000 per year from the state for roads and bridges, but there are numerous road projects in mind that will cost much more than that amount would cover, he said.
The city currently is partnering with Shelby County and the state to replace a bridge on Liberty Road at a cost of $1.2 million. Shelby County is providing $600,000, while the Alabama Department of Transportation is putting in $350,000 and the city of Chelsea is paying $250,000.
For 2027, the city has two road projects that must be completed during the year at a total cost of about $1 million, Sumners said. One is an extension of Stanley Road onto U.S. 280, and the other is a project on Chesser Drive, he said.
For 2028, the city wants to repave Liberty Road because it’s in very poor condition, and the estimated cost of that is close to $2 million, Sumners said.
CURRENT GAS TAXES
Below: Liberty Road in Chelsea shows signs of wear and tear. City officials hope to repave the road in 2028 at an estimated cost of $2 million.
Chelsea currently has no taxes on gasoline that go directly to the city government. People who buy gasoline in Chelsea pay a combined 50.4 cents per gallon in fixed federal and state fuel taxes and fees.
The federal government gets 18.4 cents per gallon in excise taxes, and the state gets 30 cents per gallon in excise taxes, plus 2 cents per gallon to cover the cost of inspections.
The state retains 45% of its baseline tax of 10 cents per gallon and 66.77% of the other 20 cents per gallon authorized by the Rebuild Alabama Act passed in 2019. Together, that currently amounts to about 16.2 cents per gallon. The state then splits the rest between Shelby County and the city of Chelsea. The county receives about 11.9 cents per gallon, and Chelsea receives about 1.9 cents per gallon.
If Chelsea were to levy an additional gasoline tax, that revenue would go directly to the city.
Sumners said the amount the city would receive from a potential gas tax would depend on what per-gallon amount is implemented.
“A 1-cent tax would generate a little over $110,000 per year,” he said. “Gas taxes in Alabama cities usually range from 1 to 3 cents per gallon, with a few being up to 5 cents per gallon.”
Sumners also emphasized the importance of differences in gas taxes and sales taxes.
“Unlike sales tax, gas taxes are not figured as a percentage of total sale,” he said. “Gas taxes are figured per gallon. So if gas is currently $3 per gallon, a 3-cent gas tax would bring that price to $3.03 per gallon, where a 3-cent sales tax would be $3.09. I think this is another area where people may be getting confused.”
POTENTIAL NEW TAX
City leaders as of mid-June did not have a firm amount for a potential gas tax, but based on estimates from the city’s finance director, a 3-cent gas tax would cost the average consumer about $40 per year, Sumners said.
City Engineer Keith Hager said that, unfortunately, road and bridge repairs are expensive but necessary for all municipalities.
“From my experience, if city leadership does not plan for these items, they risk getting into bad situations and could be forced to consider emergency funding or cutting other needed programs,” Hager said.
Many of Chelsea’s roads are newer, but as the city gets older, these roads will require maintenance, Hager said.
“The city has been lucky that it has not had many major emergency repairs and has been able to maintain its roads in good condition,” he said. “As the roads age, they will need repair. It’s not a question of ‘if’; it’s a question of ‘when.’”
An additional gasoline tax also would help the city to better prepare maintenance plans for the worst roads and avoid catastrophic emergency repairs that cause more traffic disruptions and delays for residents, Hager said.
Council Vice President Chris Grace said if Chelsea wants to maintain high-quality and safe roads and bridges, it has to find a way to pay for that. “A gas tax makes a lot of sense because it’s a user tax,” he said.
Grace also emphasized the importance of thinking ahead.
“Everybody gets excited about roads; they get excited about bridges when they’re built. But what people forget about is you have to maintain those, and so we wouldn’t be good stewards as a city if we weren’t trying to think ahead and trying to figure out how we are going to maintain those facilities,” Grace said.
FUNDING POLICE
A gas tax also been discussed as a way to help fund a Chelsea Police Department. Shelby County already has informed Chelsea that it will not extend its contract to perform law enforcement services for the city past October 2029, Councilwoman Johnna Barnes said.
“If we were to implement a gas tax, the revenue generated would be allocated toward the improvements of streets, roads, etc.,” she said. “This would free up funds currently used from the general fund to support these improvements. While the city does receive gas tax revenue from the state, which we contribute to the city’s costs for the expenses, it is not a substantial amount.”
Grace said a gas tax would provide a dedicated funding resource for transportation projects, so the council could take that money currently going from the general fund to transportation and redirect it toward public safety.
“It really is that simple of an idea,” he said. “Those revenues [from the gas tax] would be solely dedicated to road and bridge projects in the city of Chelsea transportation system.”
Pam Hamrick, who moved to Chelsea about four years ago, said gas in Chelsea already is more expensive than it is on the west side of Double Oak Mountain. Adding a gas tax isn’t a good idea, she said.
“It’s just going to cause the gas stations to lose business,” she said. “Chelsea wants to shop in Chelsea, but we’re not going to shop in Chelsea if it’s cheaper over the mountain.”
Robin Allen, a Chelsea resident for about 12 years, said that with gas prices the way they are now, people don’t want to add another tax. However, she understands that the roads need to look good, too, she said.
She trusts city leaders to make the right decision, but she hopes they will wait for gas prices to come back down before voting to pass a tax, she said. “I know that a lot of families are struggling.”
Chet Acker, who has lived in Chelsea for decades, said he doesn’t favor a new gas tax because fuel prices are high enough as it is. He’d rather see the state implement a lottery and use the proceeds for roads, he said.
City leaders emphasized that the idea of a gas tax is simply being discussed, and a timeline for any decision on the matter is uncertain.
“The council will continue to work through these discussions until we can decide what the best path forward is,” Council President Scott Weygand said. “Infrastructure is not cheap, but it is a must.”
Sumners said city officials are well aware that during this time of excessive gas prices, now is not the time to implement any additional costs for residents. “We are simply having public discussions about possible options,” he said. “The benefit of a gas tax for the citizens would be that it could help fund many of the infrastructure projects that our citizens continue to request.”
Councilman Arthur Fisher Jr. urged residents to learn more information and ask questions about any proposals.
“I would hope that the result would be a stronger, safer community through continued investment in critical city services and infrastructure, while minimizing the burden on residents as much as possible,” Fisher said. “Just as importantly, I believe the community should have ample opportunity to learn about the proposal, ask questions and provide feedback before any decisions are made.”
MUNICIPAL GAS TAX RATES IN SHELBY COUNTY
- Helena: 3 cents
- Alabaster: 2 cents
- Harpersville: 2 cents
- Montevallo: 2 cents
- Pelham: 2 cents
- Birmingham: 1 cent
- Calera: 1 cent
- Columbiana: 1 cent
- Leeds: 1 cent
- Vincent: 1 cent
- Wilsonville: 1 cent
- Wilton: 1 cent
- Chelsea: 0 cents
- Hoover: 0 cents
- Indian Springs Village: 0 cents
- Vestavia Hills: 0 cents
- Westover: 0 cents
Source: Alabama Department of Revenue
Jon Anderson contributed to this story.
