Lawmakers Considering Sending Tax Rebates From Alabama Using Budget Surplus

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Alabama lawmakers are considering sending tax rebates to taxpayers as the state witnesses a massive budget surplus of more than $2.7 billion. If what lawmakers are considering materializes, eligible taxpayers could get up to $500 in tax rebates from Alabama.

Tax Rebates From Alabama: Who Could Get Them And How Much

Alabama’s budget that funds education has a $2.7 billion surplus, while the state general fund has a surplus of $351 million. Lawmakers have been discussing ways to use this budget surplus.

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Sen. Arthur Orr, who chairs the Senate education budget committee, said that lawmakers and Gov. Kay Ivey are working on a proposal that could include sending tax rebates to taxpayers. Additionally, the proposal is expected to include tax cuts and setting aside money for reserves as well.

“We believe, after we take care of state government, at least on the education side, we have enough to send back to the people of Alabama who sent it to us in the first place. In addition to that, with the economy and with inflation, they’re struggling, and so this would be a small manner of relief to them,” Orr said, according to the Associated Press.

Orr noted that lawmakers are considering setting aside about $500 million to send as tax rebates from Alabama. The rebate amount would depend on the eligibility criteria set by the lawmakers, but Orr noted that lawmakers are considering sending at least $200 or $250 to individual files and $400 or $500 to couples filing jointly.

Other Possible Uses Of Surplus Money

Apart from sending these tax rebates, Alabama lawmakers are also considering tax cuts, as well as adding money into reserves, said Sen. Orr.

“I think everyone realizes this is a one-time phenomenon having a surplus like this, and we need to put money back because the economy is getting tighter and tighter,” Sen. Orr said.

Some lawmakers, however, believe the surplus could be used for other purposes, such as Medicaid. According to the Kaiser Family Foundation, Alabama is one of 11 states that hasn’t yet expanded Medicaid as allowed under the Affordable Care Act.

“I think the citizens would get more out of an expansion of Medicaid than they would a one-time check to be able to spend,” Senate Minority Leader Bobby Singleton said.


Democratic lawmakers have long been calling for the expansion of Medicaid, arguing that the expansion would bring health care coverage to over 300,000 people. Republicans, however, have opposed the expansion so far.

Further, Singleton noted that housing assistance for low-income families is another area of need.

Sen. Greg Albritton, who chairs the Senate general fund budget committee, said his priority is to ensure the reserves are enough to ensure there are no budget cuts during an economic downturn.

Sen. Albritton noted that tax rebates from Alabama will “be on the table,” but would want lawmakers to put the education surplus in a trust to fund scholarships.