Alabama lawmakers to decide how to spend extra tax revenue

MONTGOMERY, Ala. (WSFA) - Alabama lawmakers underestimated tax revenues for 2022. They say the state’s brought in over $10 billion, $2 billion more than expected and now they must figure out what to do with it.

Alabamians brought in more taxes in part from gas and online shopping. With three months until the regular legislative session, lawmakers have learned they have more money to spend than they expected.

“We saw about a 12.9 percent increase in the general fund, and about a 5.6 percent increase in ETF,” said Republican representative Rex Reynolds of Madison.

Parties haven’t met to determine their priorities for the approaching session, but party leaders have their own ideas on how to spend the money - including Democrat House minority leader Rep. Anthony Daniels of Madison.

“We currently do not have universe universal Pre-K...certainly looking at eliminating the grocery tax,” said Daniels. “The other piece is for me is a novelty concept, is looking at eliminating the income taxes for overtime pay.”

Daniels thinks eliminating the grocery tax has interest from both parties.

With a Republican supermajority in the House, Rep. Rex Reynolds is likely to be the next chair of the body’s Ways and Means General Fund Committee. He has his own ideas for the surplus.

“I’ve already talked to many organizations that have huge needs, well beyond what their budget reflected in the 2021-2022 cycle,” he said.

And taxpayers could benefit through a tax rebate although nothing’s confirmed.

“If my colleagues do vote to do a rebate, certainly, it wouldn’t just need to be a one-time thing for now,” said Reynolds. “Because, you know, the strong budgets are somewhat held up by the federal dollars.”

This is the largest surplus in recent years, but the state still owes money to the Alabama Trust Fund, which could be another possible use of the extra revenue. Lawmakers will meet to decide in March 2023.

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