MONTGOMERY, Ala. – The proposed tax rebates for Alabamians changed for the third time on Wednesday, as a House committee set the one-time checks at $210 for individuals and $420 for couples.
The increase is up from the Senate-passed levels of $105 and $210, respectively, but still down from Gov. Kay Ivey’s March proposal of $400 and $800.
The rebates would cost the state $550 million and are part of an unprecedented $2.8 billion supplemental spending plan made possible by surplus revenue last year in the Education Trust Fund.
Committee chair Rep. Danny Garrett, R-Trussville, said Wednesday that the unprecedented amount of surplus funds were “very much a challenge” in deciding how to allocate them, and that a strong effort was made to maintain a fair geographical distribution of funds across the state.
On the rebates, House Speaker Nathaniel Ledbetter, R-Rainsville, later told Alabama Daily News that he and other members of the House felt the increase was something “the people of Alabama deserved.”
“The inflation rate being what it’s been for the past year, you spend a lot of money that they wouldn’t normally have to spend because of it,” Ledbetter said. “I think it’s more significant to give them a little more money. We were able to do it, so I just felt like it was the right thing to do for the people.”
Gov. Kay Ivey weighed in on the committee’s change to the rebates as well, saying that they would provide “meaningful relief for working Alabamians and our families.”
To account for the higher rebate to taxpayers, cuts were also made to the package, with perhaps the largest being a nearly $221 million cut from the Senate-approved $500 million Educational Opportunities Reserve Fund, a special educations savings account, down to $279 million.
Another significant cut to the Senate version of the bill was to the proposed K-12 Capital Grant Fund, which would allow the lieutenant governor to award grants to local schools to assist with school construction projects. While the Senate allotted $180 million toward the fund, the committee substitute cut that amount to $104 million.
Other comparatively minor cuts include reducing funding to the Lauderdale County Commission from $15 million to $12 million, cutting entirely the $5 million allotted to fund a long Covid study, reducing funding by $7 million from deferred maintenance and renovation funding to Tuskegee University, and reducing funding for deferred maintenance and renovation to Alabama community colleges by nearly $13.4 million.
The committee substitute did include some increases to ETF funding as well, such as more funds being allotted to the Department of Education for one-time expenses, including $1.75 million more for tornado reconstruction costs for Selma Elementary School, $2 million more for the Saban Discovery Center, and $2 million more for the Ed Farm.
Other funding increases in the substitute compared to the Senate education spending package include $4.5 million more for the Department of Mental Health related to facility construction costs, $2.5 million more to the University of North Alabama, and $8 million more to the University of Alabama at Birmingham.
Only two committee members expressed concerns over the spending package; Reps. Troy Stubbs, R-Wetumpka, and Anthony Daniels, D-Huntsville, who both noted the infrastructure needs of Alabama’s schools. Garrett said that the package did deal with many school infrastructure needs, with the bill ultimately receiving a favorable report in committee.
The bill now makes its way to the full House where members are expected to take it up on the floor Thursday.
Alabama Daily News’ Mary Sell contributed to this report.