Alabama lawmakers begin second special session this week to address budget shortage
September 11, 2015
Southern Torch (3614 articles)
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Alabama lawmakers begin second special session this week to address budget shortage

By Joseph Morgan

joseph@southerntorch.com

MONTGOMERY, Ala.— The Second Special Session of the Alabama Legislature convened earlier this week  on Tuesday to take a third shot this legislative session at addressing the looming $200 million General Fund budget shortfall for the fiscal year that starts Oct. 1.

Both the House and Senate adjourned in less than 20 minutes of convening on Tuesday after filing a host of revenue proposals that called for about $130 million in new taxes.

Many of those bills won approval in an Alabama House of Representatives committee Wednesday morning. Despite opposition from Democrats, the Republican-led House Ways and Means General Fund Committee approved bills to raise taxes on cigarettes, businesses, car titles and car rentals.

The committee also approved increases in fees paid by nursing homes and pharmacies that will be used to help fund Medicaid, the state’s biggest spender of General Fund dollars.

The bills now move to the House floor where they could be considered and voted up as early as Thursday.

The bills that cleared the House Committee Wednesday would:

— Raise the cigarette tax by 25 cents a pack, from 42.5 cents to 67.5 cents, generating an estimated $66 million a year.

— Raise the maximum business privilege tax from $15,000 to $30,000, while exempting businesses with net worths of less than $10,000 from paying the minimum, generating an estimated $22 million a year.

— Increase the fee for car titles from $15 to $28, generating an estimated $19 million a year.

— Increase the car rental tax from 1.5 percent to 2 percent, generating an estimated $6 million a year.

— Add a $400 per bed fee for nursing homes, generating an estimated $8 million a year for Medicaid. The fee would apply only in fiscal years 2016 and 2017.

— Add a tax of 15-cents per prescription for pharmacies, generating an estimated $8 million a year for Medicaid. It would only apply in fiscal years 2016 and 2017.

The committee also approved a new excise tax—similar to those attached to tobacco and alcohol—that would apply to pornographic movies, magazines, movie rentals, video downloads and strip clubs. If passed the Alabama Revenue Department would be called upon to establish rules for how to collect and enforce the tax.

Also on Wednesday in a separate meeting the House Ways and Means Education Committee approved a one-time transfer of up to $50 million from an education stabilization account to the General Fund would require repayment no later than Sept. 30, 2018.

The education budgetcommittee also approved a use tax transfer bill but it would not take effect until 2017.

Chairman of the House Ways and Means Committee Rep. Steve Clouse (R-Ozark) said if the budget plan is approved, it would enable the Legislature to level-fund some key agencies while cutting most others anywhere from 1.5 percent to 8 percent.

The plan would allow a $50 million increase for Medicaid and provide level-funding for the court system, Mental Health, Public Health and Human Resources and prisons, plus $16 million to begin implementing prison reforms in Alabama.

Southern Torch

Southern Torch

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