With the second round of American Rescue Plan Act (ARPA) funds coming from the federal government this year, the Alabama Legislature will need to decide what to do with the extra revenue.

While some have suggested the extra revenue should go back to taxpayers as some sort of rebate, others think it should be saved for a later date if needed.

State Sen. Clyde Chambliss (R-Prattville) recently discussed the issue on WVNN’s “The Yaffee Program.”

“My priority with that are two fold,” Chambliss said. “Number one, making sure that we are saving for a rainy day. We know it’s coming. We’re overdue for a major correction for our economy. Some think that it’s already started, inflation certainly has led to that uncertainty.

“But then also those monies are one-time monies, we need to make sure that we invest them in things that are going to be assets for our state long term, our local areas long term. Those are two big priorities going in to this session.”

The Alabama lawmaker explained why he thinks it’s important to keep some extra money is reserves if possible.

“I was the sponsor of the legislation that created the General Fund budget reserve account several years ago,” he said. “That account has $100 million in it right now, and to me on a personal level that is a huge huge sum of money, but on the state level it’s still, in my opinion, not adequate.

“My first year in the Legislature, we had a $250 million hole in the budget that we had to find revenue for and cut expenses to make sure we had a balanced budget, and thank God we do have a balanced budget here in Alabama. So saving for a rainy day is always something that we need to do.”

When asked why he would support saving the money instead of using it for a tax rebate, Chambliss said handing out checks will not solve the current problems in the economy and might even make inflation worse.

“Well I think we have to ask ourselves this question: ‘What caused inflation and what caused the economic uncertainty that we have right now?’,” he said. “The answer to that is the federal government pouring money into the economy. So, for us to do that again, I think makes our problems worse, not better.”

According to Chambliss, Alabamians already have a low tax burden, so there isn’t an urgent need for a tax rebate right now.

“We also have to keep in mind that we are among the lowest taxed states in the nation, depending on which metric you look at or how you look at it,” he said. “So there are a lot of states that are sending a lot of tax cuts back to their people, but their taxes are way higher than ours and they have room to do that.

“We are at the bottom of tax revenues. That is a good thing, please don’t take that as a complaint, that is a good thing and I want us to stay there. However, us giving a rebate or a tax cut out like some other states that have much much higher taxes is probably not what we need to do.”

Yaffee is a contributing writer to Yellowhammer News and hosts “The Yaffee Program” weekdays 9-11 a.m. on WVNN. You can follow him on Twitter @Yaffee