Through all my adult life, politicians in Montgomery have talked about the need to remove the state sales tax from groceries, but they always find excuse after excuse preventing them from actually doing so. The potential loss of budget revenue, the false claims that replacement taxes must be passed, and the looming threat of economic downturns are just a few of these excuses.
The time for excuses is over.
Alabama is currently enjoying the greatest and most robust economy in its history. More people are employed with well-paying, secure jobs than ever before, and our state budgets currently have a combined surplus of roughly $3 billion.
The conservative budgeting practices that Republicans put in place after taking control of the legislature in 2010 allowed Alabama’s economy to weather the COVID-19 pandemic better than almost all other states, and our already impressive success in attracting economic development and industrial recruitment prospects is growing daily. Alabama’s business sector – ranging from the largest employers to the smallest, mom-and-pop operations – remains healthy and is sending unprecedented revenues to the state.
All these economic factors and dozens more like them have created a perfect opportunity for Montgomery to finally put action before words and begin the process of making grocery purchases tax-free.
The best news is that we can end the sales tax on groceries without having to shift the burden or raise taxes elsewhere. Anyone who claims otherwise is simply not shooting straight with you.
But we must act now.
Alabama is one of only three states that taxes groceries at the full rate – South Dakota and Mississippi are the others – and we are one of only 13 states in the nation that levy any tax on groceries. Our sister states of Georgia and Florida do not tax groceries, and Tennessee taxes them at a reduced rate.
As the cost of food increases because of the Biden administration’s skyrocketing inflation, Alabama’s working families are devoting even more of their household income to the grocery tax. Eggs alone cost a third more than they did last year, and each time the price increases, the amount of sales taxes you pay on them rises in proportion.
Take a moment to add up the total sales tax you pay on groceries each year. You will find it equates to roughly one month’s worth of groceries.
Now contrast those statistics with the fact that revenues in the Education Trust Fund, which is where sales taxes are earmarked, have grown steadily for almost a decade. Estimated total receipts for the ETF in the upcoming fiscal year amount to almost $11 billion alone. Additionally, we began the year with a $3 billion carry forward, and we have billions of dollars in savings accounts.
Given those figures, claiming we cannot sustain the revenue loss resulting from a grocery tax repeal defies simple arithmetic, violates basic common sense, and opposes the conservative beliefs and values that guide most Alabamians.
Over the past few weeks, I have met with various groups, including tax experts, legislative leaders, and even the grocers who collect the tax at the point of sale, and I am working with allies to begin repealing the grocery tax once and for all.
In my opinion, the grocery tax repeal must be fiscally responsible, include safeguards to ensure classroom education dollars are protected, and incorporate roadblocks to prevent cities and counties from nullifying the effort by raising local taxes on groceries.
By seizing the moment and stopping politicians from making more excuses, Alabama can provide historic tax relief to today’s working families and the generations of working families that will follow.
If we do not act now when the stars are aligned in our favor, when will we ever take action?
Will Ainsworth is the Lt. Gov. of Alabama.
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 Commentary@1819news.com.
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