As seems to be the case with many lawmakers, State Rep. Danny Garrett (R-Trussville), the House Education Trust Fund Budget Committee chairman, is down on the prospects of permanent tax cuts under the current budgetary circumstances.
During an appearance on Alabama Public Television's "Capitol Journal," Garrett said tax rebates were a possibility and even mentioned the tax reform but said tax cuts faced challenges.
"[N]ow the question is what do we do with that surplus," Garrett said. "There's a lot of talk of doing a tax rebate, which I think is something we are going to talk about. The Governor has certainly indicated she would like to do that — a lot of support for that. We're beginning to hear some people push back on that and say why don't we redirect that money into some of these areas that are underperforming in the state. We'll have that discussion. My sense is we'll probably do a rebate of some size."
"Some people talk about permanent tax cuts," he continued. "But when you look at the state of Alabama's taxes, and you put them all together — we're very low on property taxes. We have higher sales tax rates that are local sales tax rates primarily. You put all of it together — we are the lowest taxed per capita in the country. So when you look at how we perform and try to compete against other states and the services we provide, you have to consider that."
"I think tax reform is something we should discuss but permanent tax cuts, we've got to be careful because we're dependent heavily, unlike most states, on income and sales tax," Garrett added. "Most states are dependent more on property taxes, which tend to be very stable. Sales and income taxes fluctuate wildly. When the money is coming in, they go up. When the money is not there, they drop. So we're looking at all of that and a very disciplined approach. The good news is we're in a good spot. I think we've managed to be fiscally responsible, but we're not the only state that has these surpluses. In fact, we have much less than many."
Jeff Poor is the executive editor of 1819 News and host of "The Jeff Poor Show," heard Monday-Friday, 9 a.m.-noon on Mobile's FM Talk 106.5. To connect or comment, email [email protected] or follow him on Twitter @jeff_poor.
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