Alabama’s broken tax system usually starves our state of money to fund basic responsibilities adequately. But 2022 may be different. Record tax revenues and a surge of federal recovery dollars could allow lawmakers to address longstanding state needs and inequities – if they have the political courage.
State revenues that pay for our schools, including income taxes earmarked for teacher salaries, went up 16% in 2021, according to the Legislative Services Agency. Internet sales taxes and other revenues for non-education programs grew more than 11% in 2021. Alabama also has received federal funds under the American Rescue Plan Act (ARPA) to aid recovery from the COVID-19 recession. Alabama has $580 million remaining in 2021 ARPA funds, plus another $1.06 billion coming in 2022.
Coming fast behind ARPA are federal infrastructure dollars for roads, bridges and public transportation. And if the U.S. Senate passes it, the Build Back Better Act will include new funds for child care, health care and senior services.
Transformative changes for a better Alabama
Legislators already have begun talking about how to spend this money. Alabama Arise believes wise use of these funds can make Alabama a better place for generations to come. Many of our recommendations are in our statement of principles for spending recovery dollars. A few key Arise recommendations include:
- Untax groceries. Tax cuts should help struggling Alabamians who already pay a disproportionate share of state taxes. Ending the state grocery tax is a good place to start.
- Expand Medicaid. Federal recovery dollars can help free up state money for Medicaid expansion. This would save hundreds of lives and ensure affordable health coverage for more than 340,000 Alabamians every year.
- Make the criminal justice system more just. Legislators just made a misguided decision to spend $400 million of ARPA money on new prison construction. They now should invest in meaningful policy changes like sentencing reform and other alternatives to incarceration.
Alabama lawmakers have a chance to make far-reaching and lasting changes in 2022. Arise and our members will work hard to ensure they seize this opportunity