MONTGOMERY, Ala. -- An Alabama House budget committee will hold a public hearing Tuesday on a proposed cigarette tax increase that's less than a third of the size sought by Gov. Robert Bentley.
The bill by Rep. Patricia Todd, D-Birmingham would raise the raise the cigarette tax by 25 cents per pack. It is considerably less than the 82 cents per pack increase that Bentley had proposed as part of a package to help fill a hole in the state General Fund budget.
With six weeks to go until the end of the regular session, a few of Bentley's ideas are getting an airing in committee, but they have been sharply reduced from what he originally proposed.
Todd's bill would raise an estimated $60 million, said budget committee chairman Rep. Steve Clouse, R-Ozark. Bentley's proposal would have raised $205 million
Clouse said there was not support in the House for the size of the increase that Bentley was seeking.
Bentley had proposed $541 million in tax increases to fill a projected shortfall in the state General Fund budget for the fiscal year that begins Oct. 1.
The governor has said he is willing to look at alternative ideas, but that lawmakers must find a way to address the budget hole. He has threatened to bring them back into special session this summer to avoid deep cuts to government services.
The governor said Monday that he had not seen Todd's cigarette tax proposal.
"I'm going to be happy only with $541 million," Bentley said. "If that's part of the package, I'm fine, but there certainly has to be more than that."
The committee will also hold a public hearing Tuesday on a proposal to raise the rental tax on automobiles. Bentley had sought to raise the car rental tax from 1.5 to 4 percent. Clouse said that will be reduced to take the increase to 2 percent. That will raise an estimated $6 million, Clouse said.
The Alabama Legislative Fiscal Office has projected a $290 million budget shortfall next fiscal year. In addition, the state also has unfunded needs in corrections and Medicaid and owes money to repay funds borrowed from a rainy day fund and a state trust fund to patch up the budget in previous years.
In addition to the cigarette tax, Bentley's other large money making proposal was to raise the sales tax on automobile purchases from 2 percent to 4 percent. That would have raised $200 million. Clouse said he did not see support for that idea.
Clouse said the committee will likely debate the General Fund budget next week.