Lawmakers receive details for Alabama governor's budget proposals

Alabama Gov. Robert Bentley announces a state settlement with BP for the 2010 oil spill in the Gulf of Mexico, Thursday, July 2, 2015, at the Capitol building in Montgomery, Ala.
Alabama Gov. Robert Bentley announces a state settlement with BP for the 2010 oil spill in the Gulf of Mexico, Thursday, July 2, 2015, at the Capitol building in Montgomery, Ala.

MONTGOMERY, Ala. -- As the Alabama Legislature begins a special session devoted to addressing the state's cash-strapped general fund, Gov. Robert Bentley is proposing a number of ways he thinks the state should change its budget and where the money should come from.

The 2015 regular session ended in a political stalemate after Bentley vetoed an austere budget passed by lawmakers that would have cut $200 million from state agencies.

On Monday, acting finance director Bill Newton gave members of the House and Senate budget committees details of the governor's plan for $302 million in new tax revenue as part of a proposed $1.9 billion budget for the 2016 fiscal year.

None of the tax bills has been filed, but Bentley on Monday said he thinks lawmakers are ready to approve modest increases.

Here are some of those ideas:

* Getting rid of a FICA tax deduction would be the largest revenue generator in the governor's tax plan. Newton says the legislation could generate $182 million in new tax revenue. Bentley has said that even the richest Alabamians would only see their taxes rise by $276.

* The governor is trying once again to raise taxes on tobacco products in the state by adding a new 25-cent tax to every pack of cigarettes, and a proportionate tax on other tobacco products. The newest proposal would also include a tax on e-cigarettes. Newton says the tax could generate $70 million.

* Changes to the state's business privilege tax would eliminate tax liability for small businesses with a net worth of less than $10,000, while raising the maximum tax for the biggest businesses in the state with net worth in the top 10 percent. This tax could generate $38 million.

* Another bill would repeal taxpayers' ability to tell employers that they don't need to withhold pay for income taxes. This change would generate $12 million in new revenue.

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