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Orr, Albritton: Tax rebate still up for debate

Members of the Alabama Legislature discussed the state’s finances last week during budget hearings, as the debate continues on how to spend surplus revenue.

State Sen. Arthur Orr (R-Decatur), the Senate Education Budget chairman, is still pushing the idea of a one-time tax rebate, while others suggest the extra money should be saved for a rainy day.

Friday, Orr discussed the issue on Alabama Public Television’s “Capitol Journal.”

“I still think it’s to be determined,” Orr said about the changes of a tax rebate being passed. “I saw where a couple of members suggested we just put it aside and put it in a trust fund and try not to spend it at all.

“For me as the chairperson, I think we could do a lot of things, part of that being a rebate, sending a good portion back to the people, also saving a good portion.”

Also joining the show was Senate General Fund Budget Chairman Greg Albritton (R-Atmore), who warned against not spending the surplus wisely.

“Should a recession hit, the revenues would be declining,” said Albritton. “We could be in for some tough times, and we have to plan for the worst case scenario.

“We can’t live on roses and puppy dogs.”

Orr agreed with Albritton about preparing for the future, but suggested that lawmakers could do that while also still giving some of the extra revenue back to the people.

“Senator Albritton makes an excellent point about the future and a recession and the economy,” Orr said. “And what do we know is the education budget gets hit horribly when income taxes go down and also sales taxes go down.”

Orr said there might be a chance to compromise on the issue.

“I can see a savings account, a rebate, maybe some tax cuts, smaller in nature but targeted to help, for me, I would say our retirees and those at the other end of the spectrum to help working families and to help them with their taxes,” he said. “A lot of voices out there, but to be determined.”

He also admitted that there could be some challenges ahead when those federal funds spot coming in to the state.

“On the education side, one of the things that I think is interesting in 2025. We’ll be working on the 2024 budget this legislative session, but 2025 the federal funds will dry up related to COVID,” he said. “So we’re going to have to backfill with state dollars a lot of those federal fund dollars that are being used to coaches, for literacy, mathematics, and other good things in the education system. So we’re going to need to put some back and make sure we save and are ready for that day when those federal dollars go away.”

Yaffee is a contributing writer to Yellowhammer News and hosts “The Yaffee Program” weekdays 9-11 a.m. on WVNN. You can follow him on Twitter @Yaffee

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