- Associated Press - Wednesday, July 29, 2015

MONTGOMERY, Ala. (AP) - Gov. Robert Bentley on Wednesday released his tax and budget proposals ahead of next week’s special session on a budget shortfall.

The governor is seeking $302 million in taxes and new revenue in the special session that resumes Monday. The state is facing a $200 million general fund shortfall for the fiscal year that begins Oct. 1 and additional money is needed for Medicaid and to fund a previously approved prison reform package.

“We’re at a critical point. We’ve got to cut or we’ve got to have new revenue,” Bentley spokeswoman Jennifer Ardis said

The governor is seeking a 25-cent-per-pack cigarette tax increase and related tax increases on other tobacco products and e-cigarettes. He is also seeking to raise the business privilege tax on larger businesses while giving smaller ones a tax cut.

The largest money maker in the governor’s proposals is to end the ability of taxpayers to claim a state income tax deduction for federal Social Security taxes paid. The change would raise $182 million. Alabama is only one of four states that allow the deduction. The governor has also suggested a possible soft drink tax if lawmakers do not want to change the deduction.

Bentley last month called for the lawmakers into special session earlier this month. However, legislators immediately took a three-week recess as they work on their own proposals.

Legislators have been meeting off and on during the recess, but so far no agreements have been reached among legislators.

“That’s all we can do is to try to craft a budget that is workable that doesn’t put state government at risk of shutting down and collapsing and hurting the people of Alabama,” Hubbard said.

Bentley has said he will bring lawmakers back for a second special session if they fail to pass an acceptable budget.

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