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Committee advances bills to end cities’ occupational taxes, require fines and fees reporting

By MADDISON BOOTH, Alabama Daily News

MONTGOMERY, Ala. – The Senate Governmental Affairs Committee advanced several bills Tuesday that could have large impacts across the state, including legislation to abolish cities’ occupational taxes and limit the power of the state health officer.

Senate Bill 44 by Sen. Andrew Jones, R-Centre, would phase out the tax in the about two dozen cities that levy it on workers within their borders. The highest rate in the state is 2%.

The bill phases out the tax by .1% each year until fully abolished.

“I just feel it’s unfair to tax people on the privilege of working,” he said.

Allison Edge, Finance Director for the City of Auburn, said that this tax is Auburn’s second largest source of revenue, accounting for 15% of its general fund.

“If this bill passes, our formula for school funding will change,” Edge said. She noted that if this bill is passed, Auburn would likely increase its sales tax among a number of other measures.

Guy Gunter, the city attorney in Opelika, said that municipality would also have to take measures like cutting certain services to combat the $13.4 million loss of annual revenue this would create. 

“Local officials should have more options for responding to fiscal challenges, not less,” Gunter said.

Sen. Linda Coleman-Madison, D-Birmingham, who is a member of the Senate Governmental Affairs Committee, added an amendment to the bill to exempt any Class 1 municipality. Birmingham is currently the state’s only Class 1 municipality.

Sen. Garlan Gudger, R-Cullman, voted for advancement only after receiving a promise from Jones that the two would work together to make sure municipalities in Gudger’s district weren’t impacted by the bill.

Fees and fines accounting bill

The committee also advanced Senate Bill 203, sponsored by Sen. Arthur Orr, R-Decatur, which establishes a statewide database where all city courts would have to annually report the fines and fees they collected.

“Alabama is facing a crisis of confidence in its municipal court system,” Leah Nelson, Research Director at Alabama Appleseed Center for Law and Justice said. “We’re not talking about getting rid of income, just accounting for it.”

Mayor Joe Taylor of Rainbow City, said that some towns are worried about the money it would take to input this data.

“It almost feels like an unfunded mandate in our case,” he said.

“While I don’t disagree with the intent, I believe that there’s a system in place…that already does that,” Vestavia Municipal Court Director Umang Patel said. He was speaking of the database that Alabama’s Administrative Office of the Courts publishes online. 

Patel and Lorelei Lein, the Alabama League of Municipalities’ general counsel, both suggested expanding this program instead of creating new ones. Entering information into AOC’s database isn’t required, but Lein said it could be.

The bill advanced with talks of addressing these concerns later.

Health officer power bill

Orr’s bill to limit the powers of the state health officer was advanced unanimously.

Senate Bill 255 would prohibit the state health officer from issuing any sort of emergency rule or order that would in any way affect the lives of citizens unless the directive is approved by the governor.

It now includes an amendment that allows the officer to continue to deal with state health code violations, like in restaurants, without the governor’s approval.

The committee also advanced Senate BIll 38, also by Jones, to abolish the office of state auditor and put its responsibilities under the state treasurer. The state auditor maintains the state’s property inventory. 

The position wouldn’t be dissolved until January of 2031, giving the next state auditor elected the ability to serve two full terms.

The fiscal note on the bill states that the amount of money saved by abolishing this position depends on how much extra money is allocated to the office of the state treasurer to perform the extra duties.

 

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