Alabama’s Speaker of the House is optimistic that the Education Trust Fund (ETF) will grow enough next year to implement the second phase of the tax cut on groceries.

Right before the end of the 2023 session, the Legislature passed a bill to cut the sales tax on groceries in half.

The tax cut will be implemented in two phases – with the first 1% cut happening this year and the second 1% cut taking place next year, if there is enough revenue and the ETF grows a certain amount.

Even though the fund at the end of May was -1.56% year-over-year, Speaker Nathaniel Ledbetter (R-Atmore) still believes there’s a good chance it will grow enough for the second cut to take place.

Ledbetter discussed the issue Wednesday on WVNN’s “The Yaffee Program.”

“I think it’s pretty good,” Ledbetter said about the chances for growth in the ETF. “We’re seeing an influx of new jobs coming to Alabama. I think that helps grow our economy and once that happens I believe the growth of the education trust fund will be enough that we will be able to do another 1%.”

The lawmaker said he would like the state to eventually abolish the tax and believes that will one day happen.

“We’d like to take all tax off groceries,” he said. “I think we can do that. I do think we’ve got the guardrails in place just to make sure the Education Trust Fund grows to overcome the amount we’ve taken out, and I think that’s the conservative thing to do. And, once that happens, we’ll be able to move forward and begin to remove the rest of the grocery tax.”

Ledbetter thinks the grocery tax cut is just one of many accomplishments of the Legislature this session.

“We’ll I think it’s a very successful session. I think some of us have been talking about it as a historic session because of the things we’ve done,” he said. “We come in early with ARPA funds, we allocated $1.2 billion to different agencies across the state, then got back that incentive package that I think is going to grow jobs, better paying jobs in our state. We cut the state grocery tax, the largest tax cut in Alabama history, and then gave a tax cut to overtime, people that work overtime get don’t have to pay state taxes. After that we gave rebates.

“It’s been a session that I think is one that we can be very proud of.”

In order for the tax to decline to 2% in September 2024, the state estimates revenue growth in 2025 has to be at least 3.5% above 2024.

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