Cigarette tax, others approved by House; lottery delayed in Day 3 of Legislative Special Session

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MONTGOMERY, Ala. (WHNT) – Day three of the Alabama Legislature’s special session was busy with a lot of moving parts.

Cigarette Tax Heads to Senate

The House of Representatives narrowly approved a cigarette tax increase Thursday afternoon, as a plan to fill a budget shortfall inched forward in the Alabama Legislature.

Representatives voted 52-46 for the bill to place an additional 25-cent tax on each pack of cigarettes. Republican Rep. Connie Rowe of Jasper said the cigarette tax is part of a solution to keep state services operating.

The General Fund faces a projected $200 million shortfall and a shutdown if a budget is not passed by the October 1st deadline.

Republicans were narrowly able to muster the votes within their own party to approve the cigarette tax. Democrats largely voted against the bill, saying the state should consider tax reform or gambling measures. The cigarette tax would raise a projected $66 million. It was the largest portion of $120 million in revenue bills before lawmakers this week.

Lottery bill likely dead

Meanwhile, the Senate Tourism and Marketing committee has delayed a vote on a lottery bill, carrying it over and likely, killing the proposal altogether for the special session.

The proposal by Huntsville Sen. Paul Sanford would have Alabama join Powerball, Mega Millions and other multi-state lotteries. More about it in the video below:

Sanford said a lottery is an option instead of taxes to raise money for the state’s General Fund budget.

The proposal ran into opposition from senators who want the state to authorize casino gambling along with a state lottery. This proposal does not include casino games. Senate President Pro Tem Del Marsh is expected to introduce the casino and lottery legislation in the 2016 regular session that begins in February.

“I think that’s a discussion for another day, that’s what I had promised and I’m ready to do that in the next regular session,” Marsh told WHNT News 19.

Gas Tax?

Some lawmakers are suggesting an additional gasoline tax to pay for road and bridge construction and repairs across the state.

The House Transportation, Utilities and Infrastructure on Thursday approved a bill that would put a five-cent per gallon tax on fuel.  It then adjusts the tax up or down by two cents each year, depending on consumer prices and other factors.

Republican Rep. Mac McCutcheon says the state desperately needs money to repair roads and bridges.  The increase would raise an estimated $70 million in fiscal year 2016 and $100 million the next year.

The Alabama Department of Transportation, road construction companies and county commissions spoke in favor of the bill. Trucking companies and fuel wholesalers said the automatic indexing would lead to large increases in gasoline prices.

Other action taken

Both sides of the Legislature pushed some other bills ahead Thursday.

Before adjourning until 1 PM Friday, the Senate pushed a bill to the House by Senator Bill Holtzclaw that deals with state park, agency, or office closures. As introduced, the bill would require notice and a public hearing before they close.

The Senate also rejected a property tax increase.

The House approved a rental car tax increase from 1.5 to 2%, a title fee increase, a pharmacy provider tax, and a nursing home privilege tax increase. They also approved an amendment to the Rolling Reserve Act and a use tax transfer to move stabilization reserves from the Education Trust Fund to the General Fund.

Those will head to the Senate.

Representative Jack Williams, who sponsored the porn tax, said it will be carried until next session.

The business privilege tax was also carried, while negotiations about its details continue. Without it, the revenue package the committee had approved, was not passed in full Thursday. Debate about the budget was held until Friday.

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