By Samuel Mattison
Alabama Political Reporter
A new report from the Pew Research Center found that Alabama’s tax revenue has slowly grown over the past two years, but has seen significant improvement since the late 2000s crash that almost derailed the global economy.
The report, which accounts for inflation, showed that while Alabama has grown considerably since 2008, it is still 5.3 percentage points shy from its peak tax revenue in the third quarter of 2007.
“Even as the nation’s economy expanded in 2017 for the eighth year in a row, state tax revenue had its weakest two-year stretch of growth—outside of a recession—in at least 30 years,” the report read.
Comparatively, however, Alabama is doing better than its southern neighbor Florida, which is still 15 percentage points from its peak tax revenue in 2006.
Gov. Kay Ivey’s administration has made Alabama’s economic growth a key part of her re-election platform, which kicked off on stability in the state’s economy.
Since Ivey has taken office, multiple businesses have come to set up manufacturing plants in Alabama, the state has hit its lowest unemployment rate in history, and nearly 12,000 new jobs have been created.
The rises in tax revenue as told by the report come at a critical time as Alabama plans to ramp up spending in two appropriation bills for the General Fund and the Education Trust Fund.
For the most part, the bills reflect Ivey’s proposal, which called for an increase in spending
Recently, the General Fund bill passed an Alabama Senate committee on Wednesday. The budget, which is being carried by Finance and Taxation General Fund Chairman state Sen. Tripp Pittman, R-Montrose, would raise spending by $159 million, and bring the general fund to $2 billion.
The budget was increased to accommodate the prison system and, moreover, the mental health facilities overseen by the Department of Corrections, which faced a federal ruling that said they were not constitutionally sufficient.
Other increases went to a 3 percent pay raise for state employees.
The Education Trust Fund also received an increase to the tune of $216 million as Ivey requested more money for her education initiative “Start Strong, Finish Strong.” New funds for early education and reading initiatives were highlights of the proposed legislation.
The General Fund is expected on the Senate floor sometime this week, and the Education Trust Fund is still awaiting its Senate committee meeting.
Overall, the nation has escaped the recession and is now seeing a period of tax revenue growth. The report said the aggregate of all 50 states’ tax revenues showed that they are 6 percentage points above their peak in 2007.
President Donald Trump repeatedly has touted the economy as a staple of his administration despite the steady growth through President Barack Obama’s administration. Recently, when the stock market took a tumble, Trump lashed out at the news media to explain the drop.
“In the “old days,” when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!” the president tweeted after the Dow Jones took a 1,300-point plunge earlier this month.