First of Bentley’s tax proposal bills to be heard in committee Tuesday

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May 5, 2015

Alabama State House (Photo: Creative Commons/Jay Williams)

MONTGOMERY, Ala. — Members of the State House’s budget committee will hold hearings on two of Governor Bentley’s tax hike proposals Tuesday, including an increase in the state’s cigarette car sales and rental taxes.

A public hearing on the cigarette tax increase will be held at 1pm Tuesday. Rep. Patricia Todd (D-Birmingham) is carrying the Governor’s proposal. Her bill, however would only raise the per-pack excise tax by 25 cents, a marked decreased from the 82 cents suggested by Bentley.

Todd’s bill would increase revenues to the general fund only $60 million, instead of the estimated $205 million the Governor needs to get up to the $541 million in new revenue he demands.

The second proposal, a .5 percent increase in the tax collected on cars rented in Alabama, is sponsored by House Ways and Means Committee chairman Steve Clouse (R-Ozark). This bill falls short of what was proposed by the executive branch, as well. The Governor’s original suggestion to raise the tax from 1.5 percent to 4 percent garnered little support.

Clouse said that another of the Governor’s proposals, to raise the sales tax on cars from 2 percent to 4 percent didn’t have enough support to be heard alongside the rental tax bill.

Clouse was also the first House Republican to sign on as a co-sponsor to the House version of a Democrat-proposed bill that would institute a state lottery that would send its revenues to the general fund.

Monday in a speech to the Montgomery area Chamber of Commerce, Gov. Bentley reiterated that to him, it’s $541 million in tax increases or bust.

The Governor urged the crowd to encourage their state legislators to support his plan, which would raise taxes by $541 million annually to cover the shortfall. Repeating a line he has used since the State of the State address in March, Bentley reiterated that there is “nothing more conservative than getting your fiscal house in order.”

“My prescription works,” he said. “It’s $541 million, and I’m not going to accept anything less than that.”

He once again threatened to call legislators back to Montgomery if they fail to enact his tax increases, saying “We may have some special sessions this summer. The Fourth of July looks good in Montgomery.”