When Alabama lawmakers return to Montgomery Tuesday for the 2023 regular legislative session, they’ll have a “good” problem to deal with – surpluses. Officials project a small surplus in the general fund while the education trust fund will have a $2.7 billion surplus.
Stacy offers a look ahead to the big issues this legislative session.
The state’s coffers are riding high largely because of federal COVID money and increases in income and sales tax receipts. Lawmakers have $1.1 billion specifically from the American Rescue Plan Act to allocate.
“Most lawmakers realize these dollars are temporary,” Stacy said. “So I don’t think you’re going to see anything too long term.”
For instance, Stacy pointed to a one-time tax rebate, an idea floated by Republican Sen. Arthur Orr of Decatur, as opposed to a permanent tax cut. While details aren’t settled, this could be a single payment of $200 to $500. At the same time, Stacy said he’s heard pushback suggesting the state is better off taking that surplus and spending it, particularly in education, to put Alabama on better footing.
“I really do think this is something to watch because the ground is not settled here,” Stacy said.
Some Republicans have said they want to focus on school choice this session, which Stacy said means education savings accounts. ESAs have gained traction in a number of states. The idea is the state gives parents money in an account which can then be used to send their child to another school, be it private, public or homeschool.
“That’s the theory,” Stacy said. “But when you get into the details it gets very complicated very quickly.”
Critics have said this would drain money away from the education trust fund. They also say this amounts to a tax break for current private school and homeschool families.
“Other folks are saying, ‘Maybe we should invest and double down on the existing choice policies we have, like charter schools, like the [Alabama] Accountability Act that is essentially vouchers for students in struggling schools, instead of going whole hog into education savings accounts,’” Stacy said.
Drug Trafficking, Economic Development and Abortion
With drug overdose deaths on the rise, particularly from the synthetic opioid fentanyl, Stacy anticipated a bill that will increase penalties for those who traffic fentanyl. He also will be watching for a reauthorization of state economic development incentives, which are set to sunset this year.
“I’m curious what changes will get made. Will there be more transparency?” Stacy said.
Abortion could also come up, with proposals to add exceptions for rape and incest to Alabama’s near-total abortion ban along with another that would repeal an old state law that made inducing abortion a misdemeanor.
Republicans overwhelmingly control the Alabama House and Senate, but Democrats hope to see some of their proposals make it into law. On their agenda is a removal of the state sales tax from groceries, a perennial issue in the legislature, and waiving state income tax from overtime pay.
“I thought that was really interesting because that’s something you could probably hear from a Republican in years past,” Stacy said.
Democrats will also continue their push to expand Medicaid under the Affordable Care Act.
Apart from individual issues, this will be the first legislative session since the 2022 election. About a quarter of lawmakers are new. Stacy said new legislators are often eager to quickly fulfill the promises they made on the campaign trail.
“But you often run into just the legislative realities. Sometimes things are impractical. Sometimes they’re impossible,” Stacy said.
At the same time, it will be four years before legislators have to go before voters again. That means tough votes or big-ticket items can come up in sessions immediately following elections. That was the case in 2019 when lawmakers passed a gas tax increase.
The House has a new speaker in Rep. Nathaniel Ledbetter of Rainsville, who took over after the retirement of Rep. Mac McCutcheon of Monrovia. Ledbetter is a former mayor of Rainsville and was first elected to the House in 2014. He’s been the majority leader since 2017.
“The big question out there is will he allow as much debate as Mac McCutcheon did,” Stacy said. “Speaker McCutcheon was kind of notorious for letting debate go on into the night. There’s a lot of rank-and-file Republicans who would rather not be on the floor all night. So that will be a first big test for the new speaker.”