Governor Kay Ivey addressed the Kiwanis Club of Montgomery on Tuesday. In addition to the Governor’s normal talking points she added support for “providing tax relief in the pocket books of Alabamians.”
The Governor did not go into detail and did not say whether she favored one-time tax rebates out of the state budget surplus or tax reform to lower the income tax rate or reduce the four percent tax on groceries.
A number of key legislators have already suggested that tax rebates or tax would be seriously considered during the 2023 Alabama regular legislative session.
The state is expected to carry over a surplus in excess of $2 billion into the 2023 fiscal year which begins on October 1. Sen. Arthur Orr has proposed rebating a portion of that excess money back to the taxpayers rather than using it to grow the government.
Some ultra-conservatives have suggested going farther than just a tax rebate and have advocated for passing substantive tax cuts.
The State of Alabama collects a five percent income tax on all income, active or passive, in the state except on pensions. Florida, Georgia, Tennessee, and Mississippi have all either have no state income tax or have moved to reduce their taxes while Alabama has stayed at 5%, though the legislature has increased the standard deduction that every citizen is allowed to take. Tax relief could take the form of further increasing the standard deduction helping all taxpayers equally, but on a percentage basis would greatly help the working poor and low wage earners. A reduction in personal or corporate income tax rates would similarly help all taxpayers; but would much more greatly benefit high income Alabamians.
Tax reform has become a general election campaign issue.
Libertarian nominee for Governor Dr. James “Jimmy” Blake is campaigning on reducing or eliminating the income tax.
Democratic nominee for Governor Yolanda Rochelle Flowers has campaigned on eliminating the four percent tax on groceries. Flowers has also voiced support for a suspension in gas tax collections.
After learning of Gov. Ivey’s support for tax relief for Alabama taxpayers Dr. Blake told Alabama Today, “I will take credit for that.”
The general election is not until November 8.
The 2023 regular legislative session will not even begin until March so it could be many months before Alabamians can expect any actual tax relief from the legislature if it passes the legislature.
Ivey was the keynote speaker at the Kiwanis Club of Montgomery meeting to honor Sr. Trooper TerMarlon Blair of the Alabama Law Enforcement Agency’s Highway Patrol Division as the club’s Trooper of the Year for 2022.
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