Resource: Fact Sheet

Explaining Alabama’s state grocery tax reduction: What it covers and what it doesn’t

By Carol Gundlach

The sales tax may seem less visible than other taxes because we pay it in small bits, unlike once-a-year property and income tax payments. But in reality, the sales tax is the most regressive of Alabama’s three major state taxes (income, property and sales). It consumes a much greater portion of the household budget for families with low and middle incomes than it does for wealthier families.

Sales taxes on food and other necessities add to the financial strain facing families who struggle to make ends meet. Fortunately, Alabama’s new grocery tax reduction will help ease that strain and make our state’s tax system more just.

How the new law changes sales tax rates

Alabama’s state sales tax rate (4%) is lower than that of most states. But in addition to the state sales tax, people also must pay local sales taxes when shopping. When you add in local sales taxes, the combined Alabama sales tax rate – averaging 9% – is among the nation’s highest. Combined municipal, county and state sales taxes range from 7% in the Kansas community (in Walker County) to 12% in Ohatchee (in Calhoun County).

 

HB 479 reduced the state portion of the sales tax on food from 4% to 3%, effective Sept. 1, 2023. Another reduction to 2% will come in September 2024, or the first year afterward when education revenues grow by at least 3.5%. This means that in a locality with a 9% combined sales tax rate, the overall food tax is now 8%. That reduction will save Alabamians the equivalent of about half a week’s groceries each year.

The new law allows – but does not require – cities and counties to reduce their sales taxes on groceries. Most have not, citing the difficulty of securing other revenue sources due to limits on their ability to levy other local taxes imposed by the state constitution.

What does and does not qualify as ‘food’ under the law

The new law reduces the sales tax on “food,” defined as anything eligible to be purchased with benefits under the Supplemental Nutrition Assistance Program (SNAP). This federal definition of “food” does apply to a broad range of foods and drinks, including:

  • Fruits and vegetables (fresh, frozen or canned)
  • Meat, poultry and fish
  • Dairy products
  • Breads and cereal
  • Snack foods and non-alcoholic beverages 

However, not everything qualifies for the grocery tax reduction. It does not apply to prepared meals served at restaurants or to most other hot, precooked foods. And it does not apply to many other items commonly purchased in a grocery store or the grocery section of “big box” stores like Walmart, Costco or Target. Items taxed at the new, lower rate do not include:

  • Foods that are purchased hot
  • Household cleaning supplies or paper products
  • Pet food
  • Alcohol or tobacco
  • Vitamins, cosmetics and hygiene items

Items not defined as “food” are still subject to the 4% state sales tax and the full local tax. This is true even if the items are sold at a grocery store or a retailer with a grocery section. Your receipts may show separate subtotals to reflect the different sales tax rates that apply to food and other items. (Look up your local sales tax rates here.)

What should happen next

Implementation of the grocery tax reduction ran into brief first-day hiccups at some stores, leading to some initial confusion. But one thing should be crystal clear and easy to understand: Reducing the sales tax on food will make life better for every Alabamian.

The new state grocery tax reduction will combat hunger and make it easier for Alabama families to afford food. And eventually eliminating the rest of the state grocery tax would help even more. Alabama Arise is committed to continue working to untax groceries responsibly and sustainably in future legislative sessions.

How will the grocery tax reduction law (HB 479) benefit every Alabamian?

By Alabama Arise

HB 479 by Rep. Danny Garrett, R-Trussville, is a grocery tax reduction law that will benefit every Alabamian. Gov. Kay Ivey signed it into law June 15 after it passed the House 103-0 and the Senate 31-0. Below is a look at the principles that make a grocery tax reform bill good, what the new law does and what Alabamians need next.

Alabama Arise supporters gather outside the State House in Montgomery during Arise’s Legislative Day on April 11, 2023. More than 100 Alabamians came to urge their lawmakers to end the state sales tax on groceries.

What makes a grocery tax reform bill good for Alabamians

  • Provides a tax cut for families with low incomes across Alabama (not just wealthy households).
  • Protects education revenue to ensure our children’s classrooms are adequately funded in the years to come.
  • Is broad enough to have a meaningful and long-lasting impact.
  • Provides an immediate grocery tax reduction.

Provisions of the new law

  • Provides a tax cut for all Alabamians, cutting the current 4-cent tax in half as soon as September 2024.
  • Limits detrimental impacts to the Education Trust Fund (ETF) by making this tax cut contingent on projected growth to the ETF.
  • Is a broad, long-term tax cut on a wide range of foods, not just a limited subset.
  • Provides an immediate grocery tax reduction beginning Sept. 1, 2023.

What we need next

  • A complete elimination of the state grocery tax, rather than just part of it.
  • An active replacement of grocery tax revenue in the Education Trust Fund budget, such as elimination of the state deduction for federal income taxes (FIT) and other reforms of Alabama’s upside-down tax system.

Why is HB 479 a good plan to untax groceries?

  • It provides a tax cut on groceries for families with low incomes across Alabama (not just wealthy households).

    • The sales tax on groceries is a cruel tax on survival, driving struggling Alabamians deeper into poverty. The 4-cent state grocery tax costs a family of four about $600 a year, based on estimates using the moderate-cost food plan from the USDA’s cost of food at home reports.
    • This law will reduce Alabama’s 4-cent state sales tax on groceries to 2 cents in two steps. The cut will be 1 cent in 2023 and another 1 cent in 2024, assuming that projected ETF revenues grow by at least 3.5%. If they don’t, the reduction will occur in the first year when revenue growth does meet that threshold. This reduction will be an important step toward eliminating this regressive tax that makes it harder for families to make ends meet.
    • What’s missing? An ideal grocery tax proposal would eliminate the state’s entire 4-cent grocery tax, rather than just half of it. This is a cause for which Alabama Arise will continue to advocate.

  • It protects education revenue to ensure our children’s classrooms are adequately funded in the years to come.

    • Lawmakers should ensure proposals to untax groceries protect funding for public schools while making life better for struggling families across our state. 
    • The law specifies that the second half of the tax cut will occur on Sept. 1, 2024, if projected growth in total net ETF receipts for 2025 is at least 3.5%. If not, the cut will occur in the first year afterward when receipts do grow by that amount.
    • What’s missing? Alabama ultimately needs a concrete replacement for grocery tax revenues in the ETF budget to ensure we are good stewards of our children’s school funding.
      • Phasing out the federal income tax (FIT) deduction, a tax loophole that overwhelmingly benefits the richest 10% of Alabamians, would allow the state to eliminate the entire state grocery tax sustainably. This policy solution also would protect hundreds of millions of dollars’ worth of education funding each year.

  • It is broad enough to have a meaningful and long-lasting impact.

    • This tax cut applies broadly to eligible foods under the Supplemental Nutrition Assistance Program (SNAP), rather than only foods eligible under the Women, Infants and Children (WIC) program. The SNAP definition covers more food items and will make implementation clear. This is a long-term solution, not a one-time or temporary fix.

  • It provides an immediate grocery tax reduction.

    • Beginning Sept. 1, 2023, the state grocery tax will fall to 3 cents. This 1-cent reduction could provide a family of four with an immediate annual tax cut of about $150.
    • As prices continue to rise on many of the essentials that folks need to survive, every dollar helps families across Alabama who are struggling now to make ends meet.

This fact sheet was updated on June 16, 2023, to reflect the final text of HB 479 as enacted.

It’s time to provide older Alabamians with a second chance: Pass Rep. England’s HB 229

By Alabama Arise

Alabama’s prison population has steadily been getting older and more expensive to house. 

  • In 2005, about 36% of people in Alabama Department of Corrections (ADOC) custody were between ages 15 and 30. By 2021, that number had been halved and is now around 18%. 
  • Our state’s crime rate fell dramatically – by nearly 17% – from 2005 to 2019. 
  • This aging trend among incarcerated Alabamians will have an enormous impact on our state’s ability to pay for and house people in prison, now and in the future.

We can’t afford – financially or morally – to keep incarcerating people who were convicted of offenses involving no physical injury and who already have served more than 20 years.

  • The falling crime rate and the severely harsh nature of Alabama’s 1977 three-strikes law mean the share of older people in ADOC custody who were convicted of offenses involving no physical injury but have lengthy sentences has grown dramatically over time.
  • This has resulted in a disproportionately older and more expensive prison population. And it has contributed greatly to severe prison overcrowding, leading to a U.S. Department of Justice lawsuit.
  • These older inmates are the least likely to reoffend but the most costly to incarcerate, most commonly due to health care costs. Between 2000 and 2022, the state’s aging prison population contributed to a dramatic increase in the cost of incarceration. In this period, the average cost of incarceration per inmate rose from about $25 a day to more than $80, a cost increase of 220%.

HB 229 would allow a narrow group of people who were convicted of offenses involving no physical injury and who already have served more than 20 years of a life sentence a chance to petition for resentencing.

  • Only a narrow group of people serving enhanced sentences due to three-strikes guidelines would have the chance to be resentenced. This one-time opportunity would expire within five years.
  • Incarcerated individuals would qualify for resentencing only if all of the following apply:
    1. Their sentence was not the result of an offense causing serious physical injury to another person.
    2. They were sentenced to life without the possibility of parole.
    3. They received a final sentence at a trial court prior to May 26, 2000. 

The bottom line: We need to reform Alabama’s three-strikes law.

  • This bill would offer the possibility of resentencing only to older people who are incarcerated for offenses involving no physical injury and who already have served more than 20 years of a life without the possibility of parole (LWOP) sentence.
  • Alabama’s punitive sentencing practices have caused disproportionate harm to people with low incomes and people of color. This bill would be one important step to begin addressing some of the injustices resulting from those practices.

It’s time to provide older Alabamians with a second chance: Pass Rep. England’s HB 229

  • Alabama’s prison population has steadily been getting older and more expensive to house, adding to the state’s overcrowding problem.
  • We can’t afford – financially or morally – to keep housing people who were convicted of offenses involving no physical injury and who already have served more than 20 years.
  • HB 229 would allow a narrow group of people who were convicted of offenses involving no physical injury and who already have served more than 20 years of a life sentence a chance to petition for resentencing.
  • We need to reform Alabama’s three-strikes law. This bill would help address the injustices of sentencing practices that disproportionately have harmed people with low incomes and people of color.
A line graph showing the number of people aged 15-30 in Alabama prisons was cut in half from 2005 to 2021. ALEA says crime fell by 17%.
Data and graphic shared by Alabama Appleseed in its report “New Prisons for Old Men.”

It’s time for Alabama to end outdated death penalty practices: Pass Rep. England’s HB 14

By Alabama Arise

HB 14 by Rep. Chris England, D-Tuscaloosa, would require unanimous jury sentencing in death penalty cases and make the ban on judicial override retroactive. Here’s why Alabama Arise supports this legislation:

Alabama is one of only two states* that doesn’t require a unanimous jury verdict to sentence someone to death.  

  • In Alabama, only 10 jurors need to agree to sentence someone to death. Every other state with a death penalty requires a unanimous jury sentencing verdict.
  • The Supreme Court recently ruled in Ramos v. Louisiana that criminal convictions for serious offenses must be unanimous, because the Constitution requires a jury to find a person guilty beyond a reasonable doubt.
  • Decisions to impose a death sentence should have to be unanimous, too. There’s a reason nearly every other state with the death penalty requires unanimous jury sentencing in death penalty cases: taking someone’s life isn’t something that can be undone.
  • Alarmingly, one person is exonerated for every eight people executed from Alabama’s death row.

Judicial override ended in 2017, but more than 30 people are still on death row in Alabama because a judge overruled the jury’s sentence. 

  • Until 2017, Alabama was the last state allowing judges to override a jury’s decision to impose a life sentence and instead sentence someone to death. 
  • Judges used this practice, known as judicial override, to undermine the sentencing decisions made by juries. This practice was one of the factors that contributed to Alabama’s consistent top-five ranking in executions per capita. 
  • Judicial override in Alabama ended in 2017, but that legislation didn’t benefit everyone because the ban was not retroactive.
  • More than 30 people now on Alabama’s death row would benefit from this provision as they were put there by a judge who undermined a jury’s decision not to execute someone.

It’s time for Alabama to end outdated death penalty practices: Pass Rep. England’s HB 14

  • Alabama is one of only two states that doesn’t require a unanimous jury verdict to sentence someone to death.
  • Judicial override ended in 2017, but more than 30 people are still on death row in Alabama because a judge overruled the jury’s sentence.

*Florida passed a law in 2023 that allows a non-unanimous jury to impose a death sentence in the state.

Why Arise supports HB 479 / SB 257, a good plan to untax groceries in Alabama

By Alabama Arise

SB 257 by Sen. Andrew Jones, R-Centre, and HB 479 by Rep. Danny Garrett, R-Trussville, are grocery tax reduction bills that would benefit every Alabamian. Below is a look at the principles that make a grocery tax reform bill good, what the bills do and what Alabamians need next.

What makes a grocery tax reform bill good for Alabamians

  • Provides a tax cut for families with low incomes across Alabama (not just wealthy households).
  • Protects education revenue to ensure our children’s classrooms are adequately funded in the years to come.
  • Is broad enough to have a meaningful and long-lasting impact.
  • Provides an immediate grocery tax reduction.

Provisions of the Jones/Garrett legislation

  • Provides a tax cut for all Alabamians, cutting the current 4-cent tax in half over the span of four years.
  • Limits detrimental impacts to the Education Trust Fund (ETF) by making this tax cut contingent on growth in the ETF.
  • Is a broad, long-term tax cut on a wide range of foods, not just a limited subset.
  • Provides an immediate grocery tax reduction beginning Sept. 1, 2023.

What we need next

  • A complete elimination of the state grocery tax, rather than just part of it.
  • An active replacement of grocery tax revenue in the Education Trust Fund budget, such as elimination of the state deduction for federal income taxes (FIT) and other reforms of Alabama’s upside-down tax system.

Why is HB 479 / SB 257 a good plan to untax groceries?

  • It would provide a tax cut on groceries for families with low incomes across Alabama (not just wealthy households).

    • The sales tax on groceries is a cruel tax on survival, driving struggling Alabamians deeper into poverty. The state sales tax on groceries costs the average Alabama family approximately $600 a year.
    • This bill would reduce Alabama’s 4-cent state sales tax on groceries to 2 cents over a multiyear period. The cut would be 1/2 cent per year and ultimately would give the average Alabama family an annual tax cut of about $300. This reduction would be an important step toward eliminating this regressive tax that makes it harder for families to make ends meet.
    • What’s missing? An ideal grocery tax proposal would eliminate the state’s entire 4-cent grocery tax, rather than just a fraction of it. This is a cause for which we will continue to advocate.

  • It would protect education revenue to ensure our children’s classrooms are adequately funded in the years to come.

    • Lawmakers should ensure proposals to untax groceries protect funding for public schools while making life better for struggling families across our state.
    • The bill specifies that the tax cut would occur only if the growth in total net receipts to the ETF in the immediately preceding fiscal year was at least 2% more than the prior fiscal year.
    • What’s missing? Alabama ultimately needs a concrete replacement for grocery tax revenues in the ETF budget to ensure we are good stewards of our children’s school funding.
      • Phasing out the federal income tax (FIT) deduction, a tax loophole that overwhelmingly benefits the richest 10% of Alabamians, would allow the state to eliminate the entire state grocery tax sustainably. This policy solution also would protect hundreds of millions of dollars’ worth of education funding each year.

  • It would be broad enough to have a meaningful and long-lasting impact.

    • This tax cut would apply broadly to eligible foods under the Supplemental Nutrition Assistance Program (SNAP), rather than only foods eligible under the Women, Infants and Children (WIC) program. The SNAP definition covers more food items and would make implementation clear. This is a long-term solution, not a one-time or temporary fix.

  • It would provide an immediate grocery tax reduction.

    • Beginning Sept. 1, 2023, the state grocery tax would be reduced to 3.5 cents. Though the immediate reduction is small, this 0.5-cent reduction would provide the average Alabama family an immediate $75 annual tax cut.
    • As prices continue to rise on many of the essentials that folks need to survive, every dollar helps families across Alabama who are struggling now to make ends meet.

Alabama shouldn’t make housing insecurity a crime: Vote ‘No’ on HB 24

By Alabama Arise

HB 24, sponsored by Rep. Reed Ingram, R-Pike Road, would make it a Class C misdemeanor to loiter on a public roadway or the right-of-way of a public roadway. This effectively would criminalize Alabamians who are experiencing homelessness and asking for help. Here are three reasons why Arise opposes this bill:

Alabama should invest in solutions to housing insecurity, not criminalize poverty.

  • Being housing insecure shouldn’t be a crime. Neither should asking neighbors for help.
  • This bill would create unnecessary hardship for people who lack housing. They also could increase the likelihood of tense encounters between police and marginalized Alabamians.
  • This legislation could have the unintended consequence of exacerbating the overcrowding and funding crisis within our county jails.

Multiple federal courts already have deemed this type of law unconstitutional.

  • Passing this bill would result in expensive litigation that would waste Alabama taxpayers’ money. And the most likely outcome would be for the state to be retold what a federal court already has stated: Laws like this are unconstitutional.
  • A federal judge intervened in March 2023 to block a similar municipal law and to prevent the Montgomery Sheriff’s Office and the Alabama Law Enforcement Agency from arresting people who were soliciting donations. The 11th U.S. Circuit Court of Appeals also has ruled these kinds of laws violate the First Amendment.
  • By criminalizing poverty in this way, our state would be demonizing a marginalized segment of our population. Alabama also would be wasting valuable resources on lawsuits seeking to impose fines (or potentially jail time) on the people who can least afford them.
  • This bill would be a bad and unconstitutional approach to an issue that requires empathy and communal engagement, not callousness and incarceration.

Putting people in jail over housing insecurity would be both cruel and expensive. Investing in housing and other support services is a much more humane and efficient approach.

It’s time for Alabama to stop criminalizing poverty: Oppose HB 24

HB 24, sponsored by Rep. Reed Ingram, R-Pike Road, would make it a Class C misdemeanor to loiter on a public roadway or the right-of-way of a public roadway. This effectively would criminalize Alabamians who are experiencing homelessness and asking for help. Here are three reasons why Arise opposes this bill:

  • Alabama should invest in solutions to housing insecurity, not criminalize poverty. Being housing insecure shouldn’t be a crime. Neither should asking neighbors for help.
  • Multiple federal courts already have deemed this type of law unconstitutional. This bill likely would result in expensive litigation that would waste Alabama taxpayers’ money.
  • Putting people in jail over housing insecurity would be cruel and expensive. Investing in housing and other support services is a much more humane and efficient approach to addressing this issue.

Vote ‘No’ on HB 209 – Rep. Kiel’s bill that would narrow voting rights in Alabama

By Alabama Arise

Voting rights are an essential part of the democratic process, and we should be wary of any legislation that unnecessarily prevents people from voting. But HB 209, sponsored by Rep. Jamie Kiel, R-Russellville, would do just that. This bill would make it a felony to assist others in the absentee ballot application and submission process, except under very narrow exceptions. Here are three reasons to oppose this bill in the Alabama Legislature’s 2023 regular session:

Alabama’s absentee voting application process is already secure and safe. There’s no need to add confusing and frightening requirements to an already secure process.

  • This bill would prohibit any person from knowingly distributing, ordering, requesting, collecting, completing, obtaining or delivering an absentee ballot application or absentee ballot of another person.
  • Making it a crime to assist people in the absentee ballot application process is completely unnecessary. It would create a chilling effect on voters as they become more fearful of an already difficult process. 
  • This legislation reflects an untrue and dangerous narrative about voting rights and the voting process in our state. Former Secretary of State John Merrill repeatedly has gone on record to say the 2020 election was safe, and that few, if any, instances of voter fraud occurred.

This bill likely would have unintended consequences. Innocent people would become the victims of ideological warfare.

  • The stated intent of this legislation is to ensure that people don’t profit from, or take advantage of, the absentee ballot process. However, because the penalties are so severe, they almost certainly would scare people who are attempting to assist voters who legitimately need help.
  • This bill would make it a felony to drop off a neighbor’s or friend’s absentee ballot or ballot application, even if that person has a disability or no form of transportation.
  • The bill’s exception allowing immediate family members to drop off a ballot or ballot application for you is not enough to mitigate harm. This exception is too narrow (for example, it does not explicitly mention in-laws) and would lead to further confusion around the voting process.

We need to expand access to voting, not make it more difficult. 

  • Alabama has a shameful history when it comes to preventing groups from voting in our state. We have long been at the center of the battle for civil rights and far too often on the wrong side of history. 
  • Our 1901 state constitution was written explicitly to establish white supremacy and disenfranchise Black and poor white Alabamians. This shameful legacy unfortunately persists in many aspects of our state’s voting process today.
  • Our state has some of the strictest voting procedures in the country. Movements for an Election Day holiday, early voting periods, automatic voter registration and no-fault absentee voting all have met with intense opposition in the Legislature through the years.
  • This bill would be one more barrier in a long line of barriers going back more than 100 years that attempts to limit democratic participation in Alabama. We need to remove unnecessary voting barriers, not add more of them.

Vote ‘No’ on HB 209 – Rep. Kiel’s bill that would narrow voting rights in Alabama

  • Alabama’s absentee voting application process is already secure and safe. There’s no need to add provisions that could confuse or frighten people or discourage them from participating in our democracy.
  • This bill likely would have real and unintended consequences for people who are just trying to help their friends or family members vote.
  • Alabama already has some of the strictest voting laws in the nation. We should be making it easier, not harder, for people to be part of the democratic process.

Vote ‘Yes’ on SB 154 / HB 264 – Sen. Barfoot & Rep. Wadsworth’s bills to end debt-based driver’s license suspensions

By Alabama Arise

Debt-based driver’s license suspensions are harming people and communities across Alabama. SB 154 by Sen. Will Barfoot, R-Pike Road, and HB 264 by Rep. Tim Wadsworth, R-Arley, would ease this burden for thousands of people. Here are four reasons to support these bills in the Alabama Legislature’s 2023 regular session:

95% of the nearly 170,000 suspended driver’s licenses in Alabama stem from unpaid traffic tickets, not dangerous driving.

  • Nearly 170,000 Alabamians have their driver’s license suspended not because they are habitually reckless or dangerous drivers, but because they have failed to pay a traffic ticket or failed to show up in court to discuss an unpaid traffic ticket.
  • This legislation would provide that an individual’s driver’s license may not be suspended for: (1) failure to pay a traffic fine or (2) failure to appear in court for a post-adjudication hearing regarding a traffic fine.
  • This legislation still would keep dangerous drivers off the road in numerous ways. (1) It would allow points to accrue to a driver’s license for each traffic violation. When someone reaches 12 points, they would be considered a habitually reckless and dangerous driver and would have their license suspended. (2) It would allow a court to suspend a driver’s license for failing to appear at an initial court hearing or missing more than one post-adjudication compliance hearing. (3) It would allow a court to suspend a license if the individual misses more than half of their payment plan’s stipulated payments in a year.
  • This legislation does not apply to DUIs or people with commercial driver’s licenses.

When someone loses their license, they often also lose their ability to keep or obtain employment. That makes it virtually impossible to obtain the funds needed to pay for their ticket.

  • The intent of this legislation is to ensure responsible drivers who have minor traffic infractions but can’t afford to pay the ticket or the payment on time do not lose their license simply because of the lack of financial resources.
  • Gov. Kay Ivey aims to add 500,000 workers to the workforce by 2025, but that goal will be extremely difficult to meet when nearly 200,000 Alabamians have their licenses suspended for unpaid debt.
  • In 2023, 31% of underemployed and unemployed Alabamians cited lack of transportation as the main reason they weren’t working up to their potential.

Many people whose licenses are suspended for debt-based reasons such as unpaid tickets make desperate choices to clear their debt.

Research shows that:

  • 89% had to forgo basic needs like food, utilities or medicine.
  • 73% were forced to request charity that they wouldn’t otherwise have needed.
  • 48% took out a high-interest payday loan to pay off their tickets.
  • 30% admitted to committing crimes like selling drugs or stealing to pay off their debt. So the practice of debt-based license suspensions actually decreases (rather than enhances) public safety.

If the thousands of Alabama drivers who lost their licenses for debt-based reasons had kept their licenses, Alabama would have brought in an extra $277.8 million in revenue over the last five years.

  • If the 165,958 Alabama drivers who lost their licenses for failure to pay or failure to appear had kept their licenses – and their jobs – Alabama would have brought in an extra $277.8 million in revenue from income and gas tax revenue over the last five years, according to research by a UAB economist.
  • In contrast, the total amount Alabama could bring in if it collected all the outstanding debt owed by these drivers is $144.2 million total. So we’re sacrificing $277.8 million to try to collect $144.2 million.

Vote ‘Yes’ on SB 154 / HB 264 – Sen. Will Barfoot & Rep. Tim Wadsworth’s bills to end debt-based driver’s license suspensions

  • 95% of the nearly 170,000 suspended driver’s licenses in Alabama stem from unpaid traffic tickets, not dangerous driving.
  • When someone loses their license, they often also lose their ability to keep or obtain employment. That makes it virtually impossible to obtain the funds needed to pay for their ticket.
  • Many people whose licenses are suspended for debt-based reasons such as unpaid tickets make desperate choices to clear their debt.
  • If the thousands of Alabama drivers who lost their licenses for debt-based reasons had kept their licenses, Alabama would have brought in an extra $277.8 million in revenue over the last five years. We’re sacrificing $277.8 million to try to collect $144.2 million.

 

It’s time to expand Medicaid and close Alabama’s coverage gap

By Alabama Arise

Here are five reasons it’s time to expand Medicaid and close Alabama’s coverage gap:

  1. Nearly 300,000 Alabamians with low incomes would benefit from Medicaid expansion.

    • People in the coverage gap earn too much to qualify for Medicaid, but not enough for an affordable private health insurance plan on the Marketplace. This leaves them in the health coverage gap.
    • The vast majority of people who would gain coverage through Medicaid expansion are working. More than 100,000 Alabamians in the coverage gap hold jobs that are important but pay low wages. Thousands more are self-employed, serve as caregivers or attend school.
    • People who work low-wage jobs and can’t afford private coverage are among the Alabamians who would benefit from closing the coverage gap. So are workers who are between jobs, uninsured veterans, adults who are caring for children or older family members and people who are awaiting SSI determinations.

  2. We can afford it now. Medicaid expansion comes with a $619 million signing bonus.

    • States that close their coverage gap will receive a 5-percentage-point increase in the federal match rate for Medicaid for two years. This is thanks to an incentive in the American Rescue Plan Act.
    • An increased federal match rate would bring $619 million to Alabama over the next two years.
    • The state’s cost to close the gap in the first two years would be roughly $423 million. That means nearly $200 million in additional federal funding would come to our state above and beyond the cost to extend Medicaid coverage up to hard-working Alabamians. And that doesn’t even count other budgetary savings for the state and the revenue generated by thousands of new jobs across Alabama.

  3. Closing the coverage gap helps workers stay employed.

    • States that have closed the coverage gap have seen a greater increase in labor force participation among people with low incomes than in non-expansion states. One in three Alabama adults have a disability.
    • Injuries or manageable illnesses like diabetes can get so severe for those without health coverage that they prevent people from working or leading healthy lives. 
    • People with disabilities are more likely to be employed in states that have expanded Medicaid than in states that haven’t.

  4. Sixteen rural hospitals are at immediate risk of closing. Medicaid expansion can keep them operating.

    • Expanding Medicaid will help more rural residents afford health care services and reduce the financial losses experienced at hospitals from serving uninsured patients or providing uncompensated care.
    • Research shows that a rural hospital being located in a Medicaid expansion state decreases the likelihood it will close by an average of 62%.
    • Rural hospitals in states that have expanded Medicaid coverage have more sustainable median operating margins compared with rural hospitals in non-expansion states.

  5. Medicaid expansion can help strengthen mental health care services in Alabama.

    • We need more coverage and better care for Alabamians with mental health conditions. Medicaid expansion would allow more people with these conditions to access the vital care they need.
    • Alabama’s mental health care and substance use treatment providers deliver nearly $50 million worth of uncompensated services each year. Closing the coverage gap could drastically reduce this amount and allow more mental health services to be provided to people in need.

It’s time to expand Medicaid and close Alabama’s coverage gap

  • Nearly 300,000 Alabamians would benefit from Medicaid expansion.
  • We can afford it now. Medicaid expansion now comes with a $619 million signing bonus.
  • Closing the coverage gap helps workers stay employed.
  • Sixteen rural hospitals are at immediate risk of closing. Medicaid expansion can keep them operating.
  • Medicaid expansion can help strengthen mental health care services in Alabama.

What would an ideal plan to untax groceries in Alabama look like?

By Alabama Arise

Several tax bills (including grocery tax cut bills) will be discussed this year in the Alabama Legislature. What makes a tax reform bill good for Alabamians? Here are four important factors to keep in mind:

It provides a tax cut for families with low incomes (not just wealthy households).

Alabama’s state sales tax on groceries is a cruel tax on survival. It increases hunger rates, drives struggling families deeper into poverty and adds pressure to household budgets with every trip to the grocery store. 

The average Alabama family spends approximately $600 a year on state grocery tax. By reducing or eliminating the state grocery tax, we are taking an important first step toward making it easier for working families to make ends meet.

It protects education revenue to ensure our children’s classrooms are adequately funded in the years to come.

Revenue from Alabama’s individual income tax and sales tax (including the grocery tax) goes to the Education Trust Fund, which supports public education throughout the state.

Lawmakers should ensure their proposals to untax groceries protect funding for public schools while making life better for families across our state. We can and should do both.

It is broad enough to have a meaningful and long-lasting impact.

It is important that any bill to reduce the grocery tax allows SNAP-eligible foods (rather than only WIC-eligible foods) to be untaxed.

If only WIC-eligible foods are untaxed, grocers would have a hard time implementing the bill. Families would be confused when grocery shopping, as relatively few items would be untaxed, while most would not be.

The reduction should be sustainable in the long term, rather than just being a temporary fix.

An ideal grocery tax proposal will do all the things on this list while eliminating the state’s entire 4-cent grocery tax, rather than just a fraction of it.

It provides an immediate grocery tax reduction.

As prices continue to rise on many of the essentials that folks need to survive, families across Alabama are struggling now.

We need to help Alabamians at a time when they need a grocery tax reduction the most, rather than putting it off until future years.