Alabama House committee votes down cigarette tax

A legislative committee on Tuesday voted down a proposed hike in Alabama’s cigarette tax, killing one of Gov. Robert Bentley‘s major proposals for filling a hole in the state’s general fund budget.

Tempers and frustrations flared on the third day of Special Session as lawmakers grappled with a $200 million shortfall. Bentley said he was disappointed because lawmakers have had months to address the budget crisis.

“The Legislature has failed to do that. They failed in the regular session and thus far they’ve failed in the special session,” Bentley said Tuesday evening.

The House Ways and Means General Fund Committee voted down a 25-cent-per pack cigarette tax by an 8-7 vote. Committee Chairman Steve Clouse was visibly frustrated after the vote. He said the tax, which would have raised $66 million, would have helped level fund prisons, Medicaid and other crucial state functions.

“I thought it was a good budget but evidently that all fell apart,” Clouse, R-Ozark, said.

Clouse said he was frustrated that three of the seven ‘no’ votes were from Democrats even though their caucus endorsed the idea in past sessions. House Democrats have said they will not support tax increases as Republicans oppose Medicaid expansion and a vote on a lottery.

In some political hardball, Clouse responded with a new budget that would cut the state’s Medicaid program by $156 million. State Health Officer Don Williamson said he was uncertain if the state could maintain a Medicaid program at that level.

Clouse said Medicaid is the biggest problem facing the General Fund. The proposed budget will be up for debate Wednesday in the House of Representatives.

Rep. Darrio Melton, D-Selma, called the move appalling. “To take and use Medicaid as a pawn is totally unfair,” Rep. John Knight, D-Montgomery, said.

Testiness also was on display in the Alabama Senate as a committee narrowly approved a rival, but equally contentious, proposal to shore up the general fund by taking $225 million in use tax revenue from the state’s separate education budget.

Sen. Trip Pittman, chairman of the Senate education budget committee, said taking the money increases the chances of future budget cuts and squelches chances for a teacher pay raise in coming years.

Pittman said he could not support the shift without something to help backfill the budget. Senate President Pro Tem Del Marsh, the bill’s sponsor, said it was a way to help the anemic general fund.

“Instead of backfill, we should be talking backbone,” Marsh said.

Marsh is sponsoring a separate lottery and casino bill that he said could provide the money to the education budget if lawmakers and voters approve.

Bentley has asked lawmakers to approve $302 million in taxes after failing to convince them to approve $541 million earlier this year. Lawmakers have rejected many of Bentley’s other ideas, but the cigarette tax until Tuesday appeared to have some traction in the House of Representatives.

The governor on Tuesday partly blamed the gambling push for changing the landscape of the special session.

“They really do not want a solution because they want to solve this with gambling,” he said.

Republished with permission of The Associated Press.