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House Ways & Means Committee Passes Tax Increases

 

By Brandon Moseley
Alabama Political Reporter

Tuesday, September 9, the Alabama House Ways & Means Committee met to consider a controversial series of revenue measures in an attempt to pass a State General Fund (SGF) budget.

Republicans passed a number of revenue bills in rapid fire fashion over the objections of House Democrats.

State Representative Christopher John England (D-Tuscaloosa) said on Facebook, “House General Fund Committee has passed bills raising taxes on cigarettes, businesses, car titles, and car rentals and porn. That’s right, porn…They are now headed to the House for debate and possible final passage as early as tomorrow.”

State Senator Bill Holtzclaw (R-Madison) said, “The talk in the halls of the State House today focused on the $130M in new taxes that a House Committee passed in a meeting this morning. These bills will now move to the full House for a vote as early as tomorrow. It has been reported that all but one Democrat voted against these tax increases in committee today – go figure.”

The Committee voted to raise the cigarette tax by 25 cents a pack, from 42.5 cents to 67.5 cents.  This will generating an estimated $66 million a year.  HB3 was sponsored by Rep. Connie Rowe (R-Jasper).

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They also voted to raise the maximum business privilege tax from $15,000 to $30,000.  HB21 also exempted businesses with net worths of less than $10,000 from paying the minimum business privilege tax.  An estimated 100,000 very small businesses will actually get about a $150 tax break from this decision.  The changes will generate an estimated $22 million a year for the SGF. The legislation was sponsored by State Representative Mike Hill (R-Columbiana).

The committee voted to increase the fee for car titles from $15 to $28.  HB14 was sponsored by Rep. Reed Ingraham (R-Montgomery).  The move will generate an estimated $19 million a year.

The GOP legislators also voted to increase the car rental tax from 1.5 percent to 2 percent.  HB15 will generate an estimated $6 million a year and was sponsored by Rep. Chris Sells (R-Greenville).

The Ways & Means committee also voted to charge a $400 per bed tax on Alabama’s nursing homes.  This move will generate an estimated $8 million a year for Medicaid. The fee would apply only in fiscal years 2016 and 2017 and is subject to approval by the Center for Medicare Services (CMS).  HB12 was sponsored by House Ways & Means Chairman Steve Clouse (R-Ozark).

Pharmacies were hit with a tax of 15-cents per prescription in HB8, sponsored by Rep. Elaine Beech (D-Chatom).  The pharmacy tax would generate an estimated $8 million a year for Medicaid. Like the nursing home tax, It would only apply in fiscal years 2016 and 2017 and would also be subject to review by CMS.

The Committee also passed an excise tax on porn.  The Legislative Fiscal Office did not know how much revenue it would generate so it was not included in the budget calculations, but sponsor, Rep. Jack Williams (R-Vestavia) estimated that HB17 would bring in “North of $10 million.”  Under Rep. Williams plan the state would charge an excise tax on the cover charge of every nude or topless club in the State.  The excise charge would also apply to skin magazines, porn DVD sales, porn movie downloads, etc.

The Committee passed HB20, which was sponsored by Rep. Ken Johnson (R-Moulton).  HB20 would charge sales tax on vehicles sold in Alabama to residents of other states, where that state is not offering reciprocity with the State of Alabama.  It was estimated that that bill could raise $2 million for the State of Alabama.

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At 2:00 pm the Committee returned and passed House Bill 1, the actual State General Fund budget.  This budget is $1.78 billion. HB1, sponsored by Chairman Clouse, is more than the $1.62 billion SGF budget which passed the legislature in the regular session, but was vetoed by Gov. Robert Bentley (R).  Bentley had originally requested an incredible $2 billion SGF, but lowered that to $1.9 billion of fiscal year in the first Special Session.  More recently the Governor’s request has been $1.86 billion.

Republicans were just elected last November on a platform of no new taxes and downsizing State government.  Many conservatives fear that raising taxes on the people of Alabama will result in damage to the Republican brand and either conservative revolts in future GOP Primaries or more conservative voters dropping out of the practice of voting altogether.

 

Written By

Brandon Moseley is a former reporter at the Alabama Political Reporter.

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