On Thursday, Alabama lawmakers gave final approval to a one-time tax refund that will give $150 to single people and $300 to married couples.
Lawmakers agreed to a late-night compromise between different reimbursement amounts that had been approved in the Alabama House of Representatives and Senate. Senators voted 27-4 and Representatives voted 103-0 for the compromise amount, which will cost the state about $393 million.
The bill now goes to Alabama Governor Kay Ivey, who will decide whether or not to sign the legislation. In March, Ivey called for bigger rebates of $400 for singles and $800 for married couples to give them back “our taxpayers’ hard-earned money” as the state sees an unusual budget surplus of $2.8 billion.
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Senate Finance and Taxation Committee Chairman Arthur Orr said lawmakers opted for a refund they thought would be significant but still affordable for state education coffers. He said the cost of the bigger rebate to the education budget was concerning, especially as lawmakers consider other big tax cuts, such as cutting the sales tax from the Food status.
Lawmakers are trying to make strategic choices with the surplus, but have been unable to meet all the demands for tax cuts and funding due to concerns about a possible economic downturn, he said.
“We’re not going to raise taxes. So if we give too much, then what happens? We start cutting and it affects children across the state and the delivery of education in this state “, Orr said.
The House originally approved rebates of $210 and $420, while the Senate was asking for rebates half that.
However, some lawmakers have argued that the money won’t go to those who need it most – people who don’t file taxes because they earn too little or live off their retirement benefits. Refunds would only be given to people who filed tax returns for 2021.
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“That $420 won’t make a difference in my life, but for that person who may be living hand to mouth with nothing but a Social Security pension, that $210 or $420 will make a big difference. “, said Rep. AJ McCampbell, a Democrat from Livingston, said during the debate on the higher amount.
Republican Rep. Danny Garrett, chairman of the House Education Budget Committee, said he understands the concerns, but called the legislation essentially a refund to people who paid state income taxes. .
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“It will cover 1.9 million taxpayers in the state, so that’s a lot of people who will benefit,” Garrett said.
The refunds bill was approved as part of an appropriations package that also reached final passage on Thursday evening. Lawmakers approved an education trust fund budget of nearly $9 billion, which included a 2% pay raise for public school teachers and K-12 employees and the creation of a new savings account of 300 million dollars for the education budget. These bills also go to the governor.
The House of Representatives has also advanced a plan to reduce the state sales tax on groceries from 4% to 2%.