MONTGOMERY, Ala. (WIAT) — Newly elected lawmakers are learning the ropes of the legislative process during orientation at the statehouse Wednesday.
One big topic they’re being briefed on: the budgets.
Legislative leaders say tax reform is on the table next session considering billions in budget surpluses, but slashing taxes comes with consequences.
House Education Budget Chairman Danny Garrett (R- Trussville) told new members major tax cuts — like eliminating the state income tax or grocery tax — could be difficult.
“That’s less revenue, and we’re competing with states that have more revenue to do things,” Garrett said.
Eliminating the state income tax, for instance, would cut about two-thirds of the Education Trust Fund Budget. In Fiscal Year 2022, that tax brought in about $7 billion to the state.
Getting rid of the state grocery tax, Garrett estimates, would reduce the education budget another $500 million or so.
Garrett says the state’s finances right now make it well-positioned to weather a moderate recession, but he says he is open to ideas addressing tax relief.
“Any tax reform, tax deduction, tax credit issue is on the table as far as I’m concerned. We want to discuss all of those. We want to make sure that whatever we do is making the state better,” Garrett said.
Gov. Kay Ivey says spending the state’s surpluses and American Rescue Plan Act money will have to be done carefully.
“We have to be wise. Just because we have excess money right now doesn’t mean we’re always going to have it. It’s one-time money,” Ivey said.
At the end of last session, House Speaker Mac McCutcheon said a special session to allocate about $1 billion in ARPA money could happen this year.
Ivey says as of now, nothing is planned.
“That’s a subject that’s ongoing for discussion. All options are on the table, but we’ll keep you posted,” Ivey said.
Ivey also addressed new members and said there’s lots to do this session to address failing schools, lack of broadband activity in some areas and the prison system.
“When March 7 comes, it’s time to get to work,” Ivey said.
Before March 7 rolls around, lawmakers will be back Jan. 11 for the organizational session where they will officially elect leadership positions in the House and Senate.