Top Alabama senator says there are not enough votes to hike taxes

Senate President Pro Tem Del Marsh, Governor Robert Bentley, and House Speaker Mike Hubbard

MONTGOMERY, Ala. — Alabama Senate President Pro Tem Del Marsh (R-Anniston) told Yellowhammer Monday afternoon that Governor Bentley’s (R-AL) more than $300 million in proposed tax increases only have 8 Republican votes in the Senate, rendering them effectively dead-on-arrival.

“I just don’t see the body as warm enough toward any new taxes,” Sen. Marsh said.

The only exception, according to Marsh, is the proposed change to the Business Privilege Tax.

Currently, all businesses in the state must pay a minimum of $100 in “Business Privilege Taxes,” regardless of whether their venture was profitable. Today, businesses must pay .00025 percent of their federal taxable income, up to $15,000.

The governor’s proposal would exempt small businesses with less than $10,000 net worth, and change the taxable amount from federal taxable income to “Alabama taxable net worth,” as well as increases the maximum due from $15,000 to $25,000.

“This would basically take all the small mom and pop businesses off the list,” Marsh said, “it raises the threshold and increases revenue, but it’s off the big guys.”

“I just don’t see any support for the cigarette [tax increase proposal], I don’t see any support for [removing the] FICA [deduction], nothing with soft drinks. The business privilege is the only one I’ve seen any support for.”

Assuming all eight Democratic Senators vote in favor of the governor’s plan, that still leaves the Alabama Senate a few votes shy of the majority needed to pass the tax hikes.

Marsh’s vote count will undoubtedly raise concerns among rank and file House Republicans, whose leadership has been pushing hard for tax increases in caucus meetings.

Many are already reluctant to vote for tax increases of any kind, but the likelihood that the bills would die in the Senate anyway will make it even more difficult for House leaders to wrangle their members.

Republican legislators warned when Governor Bentley called the surprise Special Session that there had not been any significant movement toward the favorability of increasing taxes. Legislators had initially thought they would reconvene later in the summer once a cohesive plan was in place, but Bentley was concerned well-financed gambling interests would be able to mount a campaign in favor of expanding gaming, so he accelerated the timeline.

The previous standoff between pro-tax Republicans, gambling expansion advocates, and conservatives led to the legislature passing a balanced budget relying on cuts, which the governor vetoed. Some additional reform measures have picked up support since then, but if there isn’t an increase in momentum in that direction, Governor Bentley may find himself in a position to decide whether or not his threat to call multiple special sessions is worth it or not.

The Alabama Legislature is constitutionally obligated to pass a budget for the next year before the current fiscal year ends on September 30th.