Less than two weeks ago, Alabama’s 2022 Regular Legislative Session ended. There will be at least one special session later this year dealing with how to spend another $1 billion in federal COVID-19 stimulus funds. With Gov. Kay Ivey’s regret over gambling legislation not passing, another costly special session could be called to debate the issue once again.
For now, the work is done.
In the wake of the regular session, Alabamians have heard lawmakers talk about how successful it was. They have bragged about spending more taxpayer dollars than ever while also claiming that the legislature provided the biggest tax cut in Alabama history.
Don’t fall for this narrative. At the start of 2022, Alabama’s state government had more money available than ever before. It spent nearly all of it, making little effort to reduce taxes for most Alabamians.
Take a look at recent comments by legislators about the budgets.
Representative Lynn Greer (R-Rogersville), who serves on the House General Fund budget committee, said, “We had more money than I ever dreamed we’d have, both in the education budget and general fund. That was the key factor in the whole session, more money than we’ve ever had.”
More money than ever may be good if you think your main role as an elected official is to expand government, but what he misses is that it really was not government’s money to spend.
The state began 2022 with a $1.5 billion revenue surplus. That means the state collected more from individual and corporate income taxes, sales taxes, etc. Bottom line, it’s your money. Instead of refunding that money to you or finding ways to take less from you in the future, lawmakers spent almost all of it on more government.
Representative Danny Garrett (R-Trussville), Chairman of the House Education budget committee, rightly recognized that “you make your worst decisions when times are good, and you have a lot of money.” But then he introduced a bill to spend $1.3 billion of the Education Trust Fund’s surplus on supplemental spending for 2022.
If you know that bad decisions are made when a lot of money is available and that the state and U.S. economies are unsettled right now, then why spend all the surplus?
We’ve also heard a lot about tax cuts. Senate General Fund budget committee Chairman Greg Albritton (R-Atmore) recently said, “The primary headliner from this session, I think, is the amount of tax cuts we’ve done.”
For context, lawmakers are claiming that around $160 million in tax cuts were signed into law. That’s less than 1.3 percent of the total revenue available to Alabama’s government in 2022.
Some $87 million of those savings came from not taxing federal stimulus benefits received by Alabamians, a one-time break. Other tax cuts included relief for elderly and low-income citizens and repealing the state’s minimum business privilege tax. Business privilege tax collections were $187 million in 2021. Repealing the minimum tax will save businesses $23 million annually.
Most Alabamians will see little to no long-term relief from the “historic” tax cuts. Meanwhile, Mississippi is in the process of eliminating its state income tax. Georgia passed $2 billion in tax cuts over the last year. Florida has reduced taxes by $800 million.
Much more could have been done to take less taxes from Alabama’s citizens and businesses.
Finally, education advocates claim that it was a great session for Alabama’s public school students. “I think it is one of the best sessions we’ve had since 1983,” Alabama Education Association (AEA) Executive Director Amy Marlowe told Alabama Daily News.
The education budget is set to grow by $600 million next year. I’ve already mentioned the $1.3 billion in supplemental funding that was approved for 2022.
But does more money mean better education? So far it hasn’t translated to that in Alabama.
The Education Trust Fund budget has nearly doubled in size over the last decade. Yet Alabama schools remain near or at the bottom in national reading and math scores.
The AEA vehemently opposed Senator Del Marsh’s (R-Anniston) Parent’s Choice Act, which would have allowed parents to choose how their state education tax dollars are being spent. It would have given them the ability to pick what type of learning environment is best suited to the individual needs of their child. Thanks to the help of the AEA and others, the bill slowly died.
If it was really about improving education in Alabama, the bill would have passed. Unfortunately, the desire for state government to maintain control over that $537 million - less than five percent of the state budget - won out.
Based on these and other comments, it seems that many of our state lawmakers are out of touch with the conservative principles that Alabamians support. You may disagree. We all have an opportunity to let our voices be heard in next month’s primary elections.
Justin Bogie serves as Senior Director of Fiscal Policy at the Alabama Policy Institute. The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to: [email protected].