MONTGOMERY, Ala. (WHNT) — A bill cutting Alabama’s grocery tax in half has officially passed the state legislature.
“I think it is historic,” Sen. Andrew Jones (R- Centre) said.
Both the House and Senate approved a bill reducing the state’s 4% tax on food. It would drop to 3% this September, then 2% in September 2024 if the Education Budget grows at least 3.5%.
That 3.5% is up from a prior version of the bill that required 2% budget growth.
Senate Sponsor Andrew Jones says 3.5% growth is the average growth rate of the Education Budget for the last 20 years, and including it in the bill safeguards funding for schools.
“We want to make sure there’s enough room to take the drawdown but still have some additional funding over the year-to-year inflationary growth of the education budget. We want to make sure our schools are kept whole,” Jones said.
House Education Budget Chairman Danny Garrett says after decades of failed attempts to reduce this tax, this year was different because of public outcry over skyrocketing grocery prices.
“This is an issue that was really driven at the grassroots level. This is what our constituents wanted, what the citizens of Alabama wanted, so I was happy to see the legislature come together to do something meaningful and impactful,” Garrett (R- Trussville) said.
Garrett says he can’t say how likely it is that the state actually sees the second percent decrease on this tax in 2024. He says budget growth this year is already dropping off from last year.
“Clearly the trajectory is not a hockey stick like it was. We’ll see where it goes. I think it’s possible. If you take just numerical averages, you would say we would get there, but we live in the real world, so we’ll see where it goes,” Garrett said.
The tax cut is now in the hands of Gov. Kay Ivey. Lawmakers will be back for their final legislative day Tuesday.