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Grocery tax cut bill has lots of support, little time

MONTGOMERY, Ala. – With just seven legislative days left in the 2023 legislative session, a proposal to reduce the state sales tax on groceries has amassed unprecedented bi-partisan support. 

Though the clock is ticking on this year’s legislative session, the bill’s sponsor, Sen. Andrew Jones, R-Centre, said confidently last week that he believes the bill will reach the finish line before the Alabama Legislature adjourns next month.

Currently, Alabama is one of just three states to tax groceries at the full state sales tax rate, which is 4%. Combined with local sales tax, Alabamians sometimes pay as much as 11% sales tax on groceries.

Filed in April, Jones’ bill would cut the rate in half, reducing the rate by .5% annually until reaching 2%. It would also place a freeze on cities and counties from increasing their own sales tax rates on food in an attempt to avoid local municipalities from simply raising their rates equal to the amount the state reduced it.

The bill would amount to a $304 million tax cut, with state sales tax being a major revenue source for the state’s Education Trust Fund budget, which funds public schools.

On Tuesday, Rep. Danny Garrett, R-Trussville, filed the same bill in the House. It has 100 co-sponsors, short just five members in the entire body. Garrett told Alabama Daily News that his bill will be up in committee this coming Wednesday, making it ready for full House passage as soon as Thursday. 

Given the bill’s strong support in the House, coupled with all 35 members of the Senate having already sponsored the bill, Lt. Gov. Will Ainsworth wrote in a social media post that the legislature “must act now,” and that the tax cut would begin “the process of abolishing it altogether.”

After the Senate adjourned Tuesday evening, Jones said that he was confident his bill would ultimately pass, telling Alabama Daily News “it’s going to make it.”

“So we wanted to wait (and) let the House get to work, make sure they had plenty of co-sponsors,” Jones said on the bill’s delay, as it’s not currently scheduled for any committees this week.

“It is a revenue bill, so we want to make sure that we’re 100% constitutionally sound that it does start in the House because revenue bills are supposed to, depending on your interpretation. So we’re going to work and today was a big day now that we’ve got 100 out of 105, that’s huge.”

Though the bill has amassed a considerable base of support, not all lawmakers are content with the proposal as it stands today. Rep. Ron Bolton, R-Northport, told Alabama Daily News on Friday that he plans to introduce an amendment when the bill reaches the House floor that would remove the restriction on cities and counties from raising their sales tax rates.

“I’m trying to work on an amendment because the bill, as it stands currently, prohibits counties and cities from ever raising the grocery tax again,” Bolton said.

“I understand we don’t want them back-filling whatever we deduct now, and we’ve got to put language in there that stops them from doing that. However, moving down the road in years coming, I can’t tell them they can never raise it across the board, provided they raise it on everything else at the same time.”

When asked how his amendment could both prevent cities and counties from “back-filling” state tax cuts with their own tax increases, while at the same time allowing them to raise taxes again, Bolton said he was still working on the language of the amendment.

Others spoke more in favor of the bill as it stands today, such as House Speaker Nathaniel Ledbetter, R-Rainsville, who told Alabama Daily News on Thursday he believed the bill would pass before the end of the legislative session, and that “everybody’s working toward that goal.”

Rep. Matthew Hammett, R-Dozier, told Alabama Daily News on Friday that he thought the bill was “a great thing” that’s “going to help everybody,” and that he would likely support a complete elimination of the state’s tax on groceries in the future. His Republican colleague Rep. Bill Lamb, R-Tuscaloosa, also voiced his full support of the measure, noting that “with inflation remaining at high levels,” he felt the tax cut would “be a welcome relief to Alabama taxpayers.”

Rep. Mike Shaw, R-Hoover, called the bill “an unprecedented opportunity,” and told Alabama Daily News that he wasn’t only in full support of the current proposal to cut the state’s grocery tax in half, but would likely support a complete elimination of the grocery tax in the future.

“We have a historic amount of money in the bank, and if we don’t do it now, then when; it’s time to give the people some relief,” Shaw said.

“It’s something that has been talked about for decades, and I think it will significantly help a lot of people at all income levels. I know there’s some concern with how this is going to effect the Education Trust Fund and state finances, but nobody ever stopped and said how are families going to figure it out? They’ve been having to make due and pay a lot more for all the different needs they have, groceries and fuel and everything, (so) it’s time to think about their perspective and not just the government’s perspective.”

Rep. Alan Baker, R-Brewton, told Alabama Daily News Friday that while he supported the bill, he still held some concerns over the potential impact to the state’s ETF.

“I would state that I am strongly concerned with the impact to the ETF – or the impact it could have – but I have been assured by legislative analysts that this, with a gradual phase-in based on projected growth, that a 2% grocery sales tax is doable,” Baker said. “So I recognize that this would be a welcome benefit to Alabamians all across the state, but particularly to the senior adults that’re on a fixed income.”

Baker went on to say that it would be premature for him to voice full support of completely eliminating the state’s grocery tax in the future, and that it would depend on the impact of the current proposal once fully phased in.

One House member who supported an eventual elimination of the state’s grocery tax in its entirety was Rep. Ontario Tillman, D-Bessemer, who told Alabama Daily News on Friday that a reduction of the state’s tax on groceries has been a goal for Alabama Democrats for over a decade.

“We are very excited that we have the overwhelming support of this piece of legislation; it’s a great step in the right direction where we can allow the people of the state of Alabama to keep their money in their pockets,” Tillman said. When asked why he felt the proposal had only now amassed such strong bipartisan support after years of attempts to reduce or eliminate the state’s grocery tax, Tillman said he believed it was public pressure.

“I think it’s the outcry; it was an issue that I campaigned on as well as a number of other Democrats, (and) I think the public started to understand that we shouldn’t tax groceries, we shouldn’t tax food,” he said. “I think it’ll be one of those bi-partisan issues that we can reflect on and say this is how we should govern from both sides of the aisle and do what we are elected to do, which is to represent the people.”

Efforts to reduce or eliminate the state’s grocery tax go back more than 15 years, with most opponents citing concerns of lost revenue to the state’s education budget.

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