Friday, April 24, 2015
2015 Legislative Update: Week 7
The Legislature met for a fairly uneventful seventh week in Montgomery, using legislative days fifteen and sixteen of an allowed thirty. While talk of the budget and possible tax increases continues to dominate the halls of the State House, those measures have yet to be taken up by either the House or the Senate.
A Flat(ter?) Tax Proposal
On Tuesday, Senate Republicans led by Senator Bill Hightower (R–Mobile) unveiled a tax reform proposal that many have called a “flat tax” plan. While that moniker ignores the fact that Alabama already has an essentially flat tax—with most individuals paying 5% and most corporations paying 6%—the proposal has generated some discussion in the State House. The plan, which would require a Constitutional Amendment, would eliminate all income tax deductions and lower the rate paid by individuals to 2.75% and by corporations to 4.59%. Proponents say that the measure would make Alabama’s taxes fairer and subject to less gamesmanship. They also state that the plan is revenue neutral. The measure, Senate Bill 409, was introduced on Thursday with nineteen Republican co-sponsors.
While the Governor has repeatedly pledged that he will not expand Medicaid, many believe that he may pursue a private insurance based plan that would have largely the same effect. Similar plans have been attempted in several other States, including Arkansas. This Tuesday, Senator Trip Pittman (R–Montrose) introduced and brought to the floor a resolution urging the Governor not to expand Medicaid under any plan or set of circumstances. The resolution passed 22-8, with all Senate Democrats opposing the measure. The Senate had intended to use Tuesday to reauthorize a group of agencies that are due to sunset this year. Senator Pittman’s measure, however, provoked Senate Democrats to shut down—or at least drastically slow—the Senate for the rest of the week.
City Power and Jurisdiction
On Thursday, the House approved House Bill 377, sponsored by Representative Ron Johnson (R–Sylacauga), that would limit a municipality’s ability to alter its boundaries. The measure would require that notice of the proposed change be given to residents and businesses at least thirty days before it occurs. The bill would also limit to once annually the number of times that municipalities may alter their jurisdictional boundaries.
In a surprise move, the Senate Finance and Taxation General Fund Committee brought Senate Bill 115, by Senator Arthur Orr (R–Decatur), back up for consideration. The bill, which would privatize the retail alcohol operation of the ABC Board, had previously been rejected 7-6 by the Committee. When brought up for a new vote, however, the legislation received a favorable report by a vote of 12-2. Senator Orr noted in the Committee that he intended to work with interested parties and Senators with concerns before attempting to bring the bill to the Senate floor for consideration.
In another surprise for the week, a bill that would authorize the use of medical marijuana in Alabama was favorably reported by the Senate Judiciary Committee. Senate Bill 326, sponsored by Senator Bobby Singleton (D–Greensboro), was approved on Wednesday by a vote of 4-3, with all present Democrats voting in favor of the bill and all Republicans present voting against it. Optimism about the bill’s passage was short-lived, though. On, Thursday, Senator Jabo Waggoner (R–Vestavia Hills), Chairman of the Senate Rules Committee, said that the bill would not be considered by the full Senate this session.
The Budgets and Taxes
On Wednesday, the House made a move towards slightly decreasing the gap in the General Fund when the House Ways and Means General Fund Committee approved a bill that would delay the repayment of funds to the Alabama Trust Fund. In 2012, the public approved the transfer of $467 million from the Trust Fund to the General Fund. The next year, the Legislature approved a repayment plan, under which $15 million would be due in FY2016. The bill approved by the Committee on Wednesday would delay that $15 million payment to FY2017.
Other than that measure, however, none of the bills related to the budgets or the Governor’s tax proposals moved this week. With less than half of the session remaining, there is increased talk in the State House of a possible summer special session. Although work continues to be done outside the public eye, most expect public discussion of budget cuts and revenue enhancement to begin dominating both bodies in the next week or two. Alternative revenue measures, such as a possible lottery or a compact with the Poarch Creek Indians, are likely to begin picking up support as well.
The Legislature is expected to meet two days next week, on Tuesday and Thursday. The House reconvenes on Tuesday at 1:00 PM. The Senate reconvenes at 10:00 AM on the same day. There are fourteen legislative days remaining in the 2015 Regular Session.