MONTGOMERY, Ala. (WIAT) — A new bill in the legislature would cut the state’s grocery tax in half, and so far, every state senator has signed on as a co-sponsor.
SB257 would reduce Alabama’s 4% grocery tax to 2% over a four-year period, with a half-percent decrease every year as long as the revenue to the education budget continues to grow.
Alabama is one of three states that fully taxes food. Shoppers said that extra spending adds up.
“I have a sister who lives in another state, and they don’t have grocery tax. So it makes a big difference,” Debbie Collins said after getting groceries at a Piggly Wiggly.
Bill sponsor Andrew Jones (R-Centre) said budget surpluses and inflation makes now the perfect time to reduce this tax. The bill requires education budget revenue to grow at least 2% each year for the tax reduction to occur.
“So that 2% growth is roughly twice the cost of the half cent of the deduction,” Jones said. “So we’d make sure that education is whole, our teachers and students are protected.”
Jones estimates the tax cut will amount to roughly $304 million. He said decades of debate over this issue have finally come to a head.
“It’s an important issue,” Jones said. “Every Alabamian can get behind this. So I think we’ve got a great shot.”
Gov. Kay Ivey says she is open to the proposal.
“Times are tough for everybody across the nation, and I want to do everything I can to help our people,” Ivey said. “So I’m open to any suggestion, and my door is always open for new ideas.”
Those with the Association of County Commissions of Alabama, however, said this bill raises some concerns.
In a statement, ACCA Executive Director Sonny Brasfield explained that if counties then also cut their grocery tax and lose too much revenue, they lack the same authority the state has to bring new taxes.
“The county commissions don’t have a general authority to levy taxes and fees,” Bransfield wrote in the statement. “For that reason, this issue is a little more serious. If the Legislature removes the sales tax on food and gives local governments the ability to remove local levies on food, I have no doubt that attention will turn to every courthouse and city council chamber in the state. I think we will need to have a statewide plan in place to recoup this revenue to continue providing services at the local level.”
Lawmakers just crossed the halfway point of the legislative session and have 15 meeting days left to pass bills.