Since Gov Kay Ivey suggested a $200 tax rebate for Alabamians, debate has raged on the benefits of tax rebates over against tax cuts, specifically cuts on the state's grocery tax.
Ivey suggested $400 one-time rebates for working individuals in Alabama, which she included in her budget recommendation for the Education Trust Fund (ETF).
According to House Speaker Nathaniel Ledbetter (R-Rainsville), tax cuts are a cautious possibility, with lawmakers still needing to be mindful of long-term fiscal impacts.
"I think we've got to be cautious," Ledbetter said. "I mean, If you look at the number of everything we're talking about spending, it's going to take a big bite out of the ETF and the General Fund. So, what we need to do, is we need to be conservative in our spending, but I'm not opposed to looking at that.
According to Ledbetter, he met with the budget committee chairmen, all of whom said they preferred total cuts over a one-time rebate.
He continued, "I asked them, 'Would you rather have a rebate or a tax cut?' Well, all of them wanted the tax cut, so I knew then the momentum was building."
Ivey's tax rebates are included in the proposed ETF budget, which has a $2.8 billion surplus. The ETF has not received deliberation in House or Senate committees while debate occurs behind closed doors.
"I think from a long-term aspect, a tax cut is better, in my opinion," Ledbetter declared. "It's certainly not a throw at the Governor, she's trying to help the people of Alabama out, and I think we got to bear that in mind. But I think we've looked at different ways that we might could help with tax cuts."
The legislation has already passed the House of Representatives. Two bills, sponsored by State Rep. Danny Garrett (R-Trussville), are designed to cut state taxes at Alabama's highest and lowest brackets.
Still, calls to cut the state's grocery tax persist on both sides of the aisle and have increased over the years. Ledbetter said it is "very possible we'll see some movement on the grocery tax."
Garrett filed a bill earlier this month that would cut the tax rate on some groceries over several years until the rate is zero. Although, the rate drop could be halted under certain circumstances.
The proposal would use the Women, Infants, and Children (WIC) program's definition of food. However, some lawmakers, such as House Minority Leader Anthony Daniels (D-Huntsville), want to use the Supplemental Nutrition Assistance Program (SNAP) program definition.
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