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The state of Alabama considers releasing up to $200 in tax rebates after a $2.7 billion budget surplus from education funds. However, Alabama Governor has yet to disclose a state budget plan for 2023.
Tax Rebates
The Legislative Services Agency announced that Alabama has obtained a $2.7 billion budget surplus from the state’s funds in education. This leaves legislators the discretion to decide how much to save and how much to spend from the budget surplus. Senator Arthur Orr of the education budget committee has also stated that the legislators are working with Alabama Governor Kay Ivey on a 2023 state budget plan.
According to Alabama Daily News, Orr expects the plan to include tax rebates for taxpayers, as well as cuts in tax bills and putting money in reserves. Orr has previously stated his desire to allocate the budget surplus for tax rebates to be distributed to the residents of Alabama. To date, legislators are considering a total of $500 million budget for the tax rebates. The amount to be received will base on an eligibility criteria. For now, the legislators are considering a minimum of $200 or $250 for single filers and a minimum of $400 or $500 for married couples who have filed jointly.
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Disagreements On the Plan
According to Alabama Daily News, unfortunately, state representative Rex Reynolds says if the state legislature authorizes the tax rebates, it will be a one-time payment only. Republicans, who dominate the legislature, also do not fully approve of the plan yet. It is also yet to be decided if the plan will come with income restrictions.
In addition, Senate Minority Leader Bobby Singleton suggested that instead of providing tax rebates, the state should expand Medicaid instead. According to Henry J. Kaiser Family Foundation, Alabama is one of the only 11 states that did not expand its Medicaid program. This program was supposed to be intended to provide health care to people with low income. Democrats have long called for the expansion of Medicaid. However, Republicans have opposed the expansion until now.
Lastly, Senator Greg Albritton of the general fund budget committee also suggested that instead of tax rebates, the state should have enough money in reserves instead. This is to make sure that Alabama would not experience cuts in budget if ever a recession occurs. He also added that the state should prioritize allocating the surplus to fund scholarships.
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