With the 2023 legislative session fast approaching, it's looking more likely Alabamians will see a rebate of some kind as the state legislature gives back some of its $2.7 billion surplus in the education budget.
State Sen. Arthur Orr (R-Decatur), the chairman of the Senate Education Budget Committee, said last December that a rebate plus a tax cut weren't off the table. However, now he said most people should expect a one-time rebate of roughly $200 per person.
"People certainly need to understand this is one-time money," Orr said during Friday's episode of The Dale Jackson Show. "This is not foreseen as a recurring event."
Orr said with the economy cycling down and many experts predicting a recession, the Legislature can't afford to lose tax revenue streams that may be needed during a downturn.
"If we open up a whole lot of tax cuts that would affect, of course, recurring revenue, then you've set a stage where you have fiscal problems, real fiscal problems a year or two or three down the road because those revenues are gone, and we're not going to be raising tax again," he said.
Still, Orr said there might be some tax cuts for retirees and certain income taxes. He said even cutting the state grocery tax wasn't out of the question.
"I think it's always on the table," he said. "The question is, how do you want to make it up? It can get close to $1 billion … In Alabama, we are one of the lowest in the country in state sales taxes. Where it really comes into play is all the county and municipal taxes that are put on top of that. The state rate is 4%... Four percent at the state level is among the lowest."
Orr said that the rebate amount would ultimately depend on how it is distributed, which is another point of intense debate.
"There's a good constituency in the Legislature that says, 'Hey, if you didn't write a check of have a real tax liability … it should only go to payers, only those that are paying in.' So that's one camp," he said. "And then you got some that say, "No, it should go to all filers because they paid sales taxes, etc., and they should benefit as well.' And then you got another camp … that says, 'Wait, well, I didn't file a return, but I paid sales tax.' So there are a lot of questions and a lot of things that have to be resolved as far as who's in the universe of recipients. And, of course, as you increase the number of recipients, the amount that you would receive would certainly go down because we don't have unlimited resources."
To connect with the author of this story, or to comment, email daniel.taylor@1819news.com.
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