Alabama revenue surplus could lead to rebate for taxpayers
Alabama Policy Institute suggests permanent tax cuts
BIRMINGHAM, Ala. (WBRC) - The state of Alabama could be sending you a check in the mail next year because of a surplus in revenue that our state got this year, but the Alabama Policy Institute says there could be a better option.
The API says our state government collected over $13 billion in fiscal year 2022, which was over their budgeted amount. State lawmakers are now trying to figure out what to do with the $2 billion surplus.
“We’ve seen this unprecedented increase in revenue,” said Justin Bogie. “More taxes coming from citizens than ever before.”
Bogie is the senior director of fiscal policy for API. He recently wrote an op-ed titled “Alabamians deserve permanent tax relief, not just a one-time check.”
“A lot of other states are using that to give permanent tax cuts, rebates, etc., but there don’t seem to be a lot of really meaningful ideas for tax reform in Alabama,” he added. “It seems we’ve settled in on this rebate idea and that’s it.”
Senator Arthur Orr says the rebate idea could send $150-$200 to each taxpayer. For those married filing jointly, it could be double.
“As the budget chair, it’d be my recommendation that we spend a goodly portion rebating the money or sending the money back to Alabama taxpayers because they’re the ones that gave it to us in the first place,” said Sen. Orr.
He and Rep. Danny Garrett say the surplus won’t be around forever and once it’s spent, it’s gone.
“It would not be good policy to take a one-time infusion of revenue and do permanent tax cuts,” said Rep. Garrett.
“It is a one-time phenomenon as far as having this excess money,” said Sen. Orr. “If we go and make massive tax cuts, there have been states like Kansas that got in trouble because they overshot the runway, so to speak, and they cut too much.”
Even still, the two lawmakers say tax relief could be in the future, aside from the revenue surplus.
“We’ve been doing tax cuts the last two or three sessions,” said Rep. Garrett. “We’ll continue to do that.”
They say all of this will be up for discussion and debate during the 2023 legislative session, so you could expect a check in the mail next year and a cut in taxes planned for the 2024 fiscal year.
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