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Tax cuts, education among bill issues in final days of session

By MARY SELL and ALEXANDER WILLIS, Alabama Daily News

MONTGOMERY, Ala. — A proposed 50% reduction to the state’s sales tax on grocery items and an expansion of the state’s private school tuition scholarship program are among some of the bigger bills pending in the final days of the Alabama Legislature’s session.

Lawmakers plan to meet today and Thursday. Whether they come back next week or later for their last possible bill-passing day — the state Constitution gives them up to 30 in a regular session — will depend on the next 36 or so hours.

What Gov. Kay Ivey does this week with the nearly $15 billion spending package the Legislature approved late last week could also impact when lawmakers end the session. They could use a day next week to respond to any changes she suggests in the 2024 budgets and supplemental bills.

“The governor is aggressively reviewing bills and appreciates the work of the Legislature this session,” spokeswoman Gina Maiola said this morning.  “Although we are in the final days of this regular session, the governor reminds the Legislature there is still more work to do before we call it a wrap.”

The Senate Finance and Taxation Committee today has not one but two meetings this morning and afternoon with several tax cut and tax exemption bills. The largest is the proposal to gradually drop the state’s sales tax on groceries from 4% to 2%.  It would save Alabamians more than $300 million per year — tax revenue that would otherwise flow to the education budget.

Sponsor Sen. Andrew Jones, R-Centre, said Tuesday he expects the bill on the Senate floor Thursday.

“This will help working Alabamians,” he told Alabama Daily News. “When they go to the grocery store, when they sit at the kitchen table, this bill is going to make a difference for them.”

Other House-passed bills on the Senate committee agenda include Rep. Anthony Daniel’s proposal to untax hourly workers’ earnings above 40 hours per week. It would pull about $45.3 million per year from the Education Trust Fund. A bipartisan group of House and Senate leaders have a press conference this morning to advocate for that bill.

There are also Rep. Jamie Kiel’s expansion of the film industry credit, Rep. Chip Brown’s bill to expand incentives for industries that use Alabama’s ports and Rep. Neil Rafferty’s income tax incentive program for health workers who train students enrolled in certain health profession programs.

Chairman Sen. Arthur Orr, R-Decatur, said all could come out of his committee today. Whether they pass the Senate and what changes they may see will require more discussion, he said.

“It’s a game of votes and I want to hear what (other senators’) thoughts are before proceeding,” Orr told Alabama Daily News.

Speaker of the House Nathaniel Ledbetter, R-Rainsville, said the grocery tax is a priority for the House.

“We won’t be able to do every one of (the proposed tax cuts); I don’t know that, but I do think the grocery tax cut is something everybody’s (in support of),” he said.

The bill has amassed unprecedented bipartisan support this year, garnering 100 co-sponsors in the House and 35 in the Senate. 

With dozens of tax cut and exemption bills filed in the Legislature this year, Orr and others in the Senate are proving to be more cautious about tax cuts than their House counterparts, warning that the revenue bounty the state has seen in recent years won’t last.

Not on today’s committee agenda? Three income tax exemption and reduction bills from Orr and Rep. Danny Garrett, R-Trussville. Orr has said for months there are limits to how much lawmakers should cut from the ETF.

“I don’t feel good about serving them up on top of this grocery tax bill and maybe the overtime bill,” Orr told Alabama Daily News. “We can’t do it all.

“We have to make some choices here and I’m making those choices because I have ownership of those bills.”

Also on Orr’s agenda is the House version of the Senate tax rebate bill approved by the Legislature and sent to Ivey last week. Orr said nothing will change in bill that gives $150 to individuals and $300 to married couples, but because it’s related to state revenue, the House version of the bill is what Ivey needs to sign.

Accountability Act expansion bill in House today

The Accountability Act expansion bill pending in the House could also impact the ETF, and hundreds of students in the state’s lowest-performing schools. Senate Bill 263 by Sen. Donnie Chesteen, R-Geneva, would expand the 2013 Accountability Act, allowing more students to participate and receive more in state-funded scholarships to attend private schools. The bill would expand the number of schools labeled “priority” — not “failing” — from which students could receive scholarships, increase the amount of money they could receive to $10,000 per year and raise the income cap for participating families.

Rep. Terri Collins, R-Decatur, is carrying the bill in the House. She and other education leaders early in the session said they wanted to focus on expanding and improving the state’s current school choice structure, rather than approving more expansive voucher-type bills.

“If we can get the choices in education that we have now to a better place — so more families have access — I think we can start working on other forms of choice after that,” Collins told ADN Tuesday. 

This late in the session, the Senate will focus on House bills, the House will focus on Senate bills.

“As we encounter the remaining days of the legislative session, it is my primary intent to continue my focus on members’ pending priorities – whether that is at the local level or general legislation,” Senate President Pro Tem Greg Reed told Alabama Daily News.

“We must not lose sight of what we have already effectively accomplished.  We navigated deep waters with the passage of ARPA Round 2 in a special session, incentive bills, and most recently the largest budgets in Alabama’s history.”

Ledbetter agreed.

“I think this has been a great session; somebody told me the other day it was historical,” he said.

 

 

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