Alabama House Republican Caucus Speaker Nominee Nathaniel Ledbetter and House Ways and Means Committee Chairman Danny Garrett said on Friday that a dramatic cut in unemployment insurance taxes announced by the Alabama Department of Labor this week will help keep the state’s historic economy and job market growing even more in the coming months.
“Based on the Department of Labor’s announcement, the financial burden that surging unemployment forced upon employers and businesses during the pandemic has come to an end,” Ledbetter said. “And thanks to the legislature’s strategic planning and wise fiscal policies during the pandemic, Alabama has remained open for business, and our economy is currently the strongest in history.”
The Labor Department announced Thursday that Alabama employers would experience a 54 percent tax cut on their unemployment insurance taxes during 2023. This tax cut has dropped Alabama into the lowest tax rate schedule, moving the state’s tax rate from Schedule D to Schedule A.
After massive layoffs caused by the pandemic depleted the state’s unemployment fund, the state legislature appropriated federal COVID relief funds to replenish the coffers of the depleted trust fund. The issuance of Revive Alabama Grants by Alabama Governor Kay Ivey and actions taken by the Small Business Commission to re-open Alabama businesses faster allowed repayments to the unemployment fund much sooner than in states that stayed shut down longer during the forced economic shutdowns.
“The remarkable achievement of moving from the highest to the lowest tax rate category is a direct result of the collaborative efforts over the past several years by Gov. Ivey, Lt. Gov. Will Ainsworth, the Small Business Commission, and both bodies of the legislature,” Garrett said. “These tax cuts will benefit businesses of all sizes and ensure that Alabama’s economy, which is already among the best in the nation, remains strong for the immediate future.”
“Following the economic uncertainty and the record-breaking amount of unemployment compensation benefits paid out during the pandemic, it is absolutely remarkable that we have been able to lower taxes for employers and drop to the lowest tax rate schedule in this short amount of time,” said Labor Secretary Fitzgerald Washington.
Ledbetter was selected by the House Republican Caucus to replace the retired Rep. Mac McCutcheon as Speaker of the Alabama House of Representatives. Since Republicans have a 77 to 28 supermajority, the Republican choice for Speaker is highly likely to be elected Speaker when the Legislature meets for its organizational session next week. Ledbetter has announced that if he is the Speaker, he will reappoint Garrett as the Chair of the powerful House Ways and Means Education Committee. Ledbetter has also announced that State Rep. Rex Reynolds will chair the House Ways and Means General Fund Committee. Reynolds replaces State Rep. Steve Clouse, who challenged Ledbetter for the Speaker’s chair.
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