There will be no removal of the grocery tax in Alabama any time soon.
There it is, that’s the column.
Why? Simple. There is roughly $400 million at issue here, and no serious plan exists that can be enacted that will make up that revenue.
That $400 million goes to the Education Trust Fund, and there is a better chance of Alabama legalizing prostitution than there is of the Alabama Education Association and their legislators agreeing to a budget that has a cut that large in it.
In fact, Governor Kay Ivey has already proposed pay raises this year, and we all know that impacts the cost for teachers’ retirement in the future, so that pay raise has more impact than just the pay to the educators this year.
There is nothing wrong with this. The teachers have a guaranteed retirement system, and while that is not economically viable in the long term, good for them.
The latest plan to address the grocery tax comes from a Republican legislator, which is a nice twist on the issue.
State Representative Andrew Jones’ (R-Centre) version recoups lost revenue by placing a cap on the amount Alabamians can deduct on their state income taxes based on their federal income tax liability.
Confused? Good.
Let me make this simple: it’s a tax increase.
By capping the deduction you can take, you will have to pay more.
Because it is a tax increase, it will require a three-fifths majority of both chambers in the Alabama legislature to approve placing a constitutional amendment referendum on a future ballot. The voters will then get to go to the polls and vote for a tax increase.
So Alabama voters will get to vote on new taxes? Yes.
It fails.
The ads will say, “You won’t pay, they will!”
It still fails.
The editorials will whine, “It’s for the children, we have to keep this money coming in!”
It fails bigly.
All of this is moot because most legislators are not going to be willing to attempt to cut one tax and then raise another while their name gets tied to the tax increase.
This won’t pass the legislature.
They will tell us, “It’s revenue-neutral!”
It fails and would scar anyone who votes for it.
The solution to this exists, and it is painfully obvious, phase the tax out.
Because the state is so reliant on this $400 million, phase it out over a decade and you will hardly miss the $40 million a year out of a $7 billion-plus budget.
A bill to end the sales tax on food passed the Alabama State House in 2008 and died in the State Senate. It comes up every year and it fails every year.
This year will be no different.
This debate has been going on for a long time, and shows no sign of ending anytime soon, at least not the way it is being proposed now.
If legislators want this tax gone, it is time for the state to slowly ween itself off of it.
Dale Jackson is a contributing writer to Yellowhammer News and hosts a talk show from 7-11 am weekdays on WVNN.
