MONTGOMERY, Ala. — Gov. Robert Bentley on Wednesday released his tax and budget proposals ahead of next week’s special session on a budget shortfall.
The governor is seeking $302 million in taxes and new revenue in the special session that resumes Monday. The state is facing a $200 million general fund shortfall for the fiscal year that begins Oct. 1 and additional money is needed for Medicaid and to fund a previously approved prison reform package.
“We’re at a critical point. We’ve got to cut or we’ve got to have new revenue,” Bentley spokeswoman Jennifer Ardis said
The governor is seeking a 25-cent-per-pack cigarette tax increase and related tax increases on other tobacco products and e-cigarettes. He is also seeking to raise the business privilege tax on larger businesses while giving smaller ones a tax cut.
The largest money maker in the governor’s proposals is to end the ability of taxpayers to claim a state income tax deduction for federal Social Security taxes paid. The change would raise $182 million. Alabama is only one of four states that allow the deduction. The governor has also suggested a possible soft drink tax if lawmakers do not want to change the deduction.