Would repealing Alabama’s grocery tax eat away education money?

This week Governor Bentley signed an Executive Order creating a task force to study a tax repeal on groceries.

He also presented this plan during his recent State of the State address on February 7, and at least one Senator said it will take money away from schools.

“The grocery tax generates about $250 million into the education trust fund,” according to Senate President Pro Tem Del Marsh.

“This year we had about 90 million extra dollars. Had that been in place we would have been short on education. I think we got to really look at that. Where’s that money going to be replaced? That’s the first I’ve heard from the Governor.”

Alabama is one of 14 states that levy a sales tax on groceries, but that could change after a review of “the potential financial impacts to the state budgets and other direct and indirect economic impacts to the state’s economy,” Governor Bentley wrote in a press release.

“My goal for this task force is to remove four percent off food items and put that money back in the pockets of Alabamians who need it the most, such as low-income individuals and families on a fixed income,” the Governor said.

Those appointed by the Governor to study the state’s food tax structure include Alabama Department of Revenue Commissioner Julie Magee, who will chair the task force.

“I look forward to working with the rest of the Task Force to deliver the Governor’s objectives as outlined in the Executive Order,” Magee said.

The Task Force must deliver their recommendations to the Governor and the Legislature by June 1.