Montgomery – Alabama's public schools and colleges will lose $59 million in tax revenue from businesses due to the federal economic stimulus package. That's the forecast by Joyce Bigbee, the director of the Legislative Fiscal office.
Bigbee says the accelerated business depreciation schedule in the federal economic stimulus package will affect Alabama's tax collections. That's because Alabama's depreciation schedule is tied to the federal schedule. Alabama's income taxes support public education.
The chairman of the Senate Finance and Taxation-Education Committee had Bigbee explain the loss to his committee Wednesday. Senator Hank Sanders of Selma says it will expand the hole that already exists in the education budget due to the economic downturn.
The federal economic stimulus package also includes tax rebates. Sanders' committee approved a bill Wednesday to remove the state income tax from the rebates. Bigbee says that taxing the rebates would produce $55 million. But Democratic and Republican leaders in the Legislature and the governor have called for waiving the state income tax on the rebates.
(Copyright 2008 by The Associated Press. All Rights Reserved.)