Tobacco tax goes down in flames in Alabama Legislature

—

August 4, 2015

MONTGOMERY, Ala. — Among the tax increases initially considered most politically palatable by members of the Alabama Legislature has been a 25 cent-per-pack increase in the cigarette tax—a proposal which prompted a dramatic series of events in a House committee meeting Tuesday and ultimately failed.

A tobacco tax increase is a major part of both House Leadership and Governor Bentley’s proposals to fill the General Fund’s projected budget shortfall.

The governor’s proposal differed significantly from the bill brought before the House Ways and Means-General Fund committee Tuesday, most notably by increasing the tax only on cigarettes (not all tobacco products), and leaving nicotine-containing vapor products completely untouched. The bill would bring appoximately $66 million to the General Fund.

Because revenue bills must originate in the House, there is no corresponding Senate bill, meaning the cigarette tax is off the table unless another bill is introduced during the Special Session’s remaining five working days.

After a vote ended in a narrow 7-8 loss for the tax increase, the committee adjourned for an hour-and-a-half recess, during which time Governor Bentley and his staff reportedly spoke with Republican members who initially voted against the bill.

Holding the line against the tax increase in the second vote were Republican Representatives Mike Holmes, Millican, and Mooney, who stood with four Democrats.

The six Republicans voting in favor were: Reps. Clouse, Ken Johnson, Gaston, Greer, Lee, and Wingo.

Interestingly, the four Democrats voting against the bill, Reps. Hall, Bracy, Knight, and Warren, are all members of the Black Caucus, which reportedly agreed to stand against the proposed tax increases to protest Use Tax money being diverted from the Education budget.

Sources: The Alabama House Black Caucus has just decided to take a firm position against tax hikes. #alpolitics #ThingsINeverThoughtIdTweet

— Cliff Sims (@Cliff_Sims) August 3, 2015

Many present at the committee meeting expected a second vote on the tobacco tax to be taken following the recess, but instead committee chairman Clouse introduced an amendment to the General Fund budget cutting Medicaid by $156 million, which passed before the meeting quickly adjourned.