- Associated Press - Tuesday, May 5, 2015

MONTGOMERY, Ala. (AP) - Alabama House Republicans on Tuesday threw their support behind a proposal to raise taxes while cutting and consolidating state government to solve the state’s looming general fund budget crisis.

The plan to raise around $150 million in new revenue would be less than a third of the $541 million requested by Gov. Robert Bentley.

Bills in the plan would raise taxes on cigarettes and car rentals, cap paid state employee holidays and transfer revenue from the Education Trust Fund to the General Fund.

House Speaker Mike Hubbard, R-Auburn, said most Alabamians wouldn’t feel the impact of the tax increases.

“It’s not broad-based,” he told The Associated Press. “That’s the key.”

In a statement announcing the plan, Hubbard said it’s the start of a long-term solution.

“Our budget problems did not appear overnight, and they will not magically disappear with the snap of a finger,” he said.

The House budget committee is expected to consider the bills Wednesday, a week before committee members consider the general fund.

More than a dozen bills comprise the House proposal, which would also include urging the governor to strike an agreement with the Poarch Band of Creek Indians for revenue in exchange for expanded or exclusive rights to run bingo games in the state.

Bills include proposals to increase the price of a pack of cigarettes by 25 cents, raise the auto rental tax to 2 percent from 1.5 percent, suspend traditional state longevity bonuses and raise fees for automobile titles.

One bill would provide a $100 annual tax cut for small businesses while requiring larger companies to pay an additional $7,000 annually.

Another would expand the sales tax to certain out-of-state residents buying cars in Alabama.

The plan also calls for transferring around $50 million in use tax revenue from the Education Trust Fund to the General Fund. That money would later be replaced with revenue from a bill to adjust taxes on motor oil and another bill that would eliminate the zero withholding option on tax returns.

House budget committee chairman Steve Clouse, R-Ozark, said the tax increases each would have a narrow focus.

“I think they are hearing from their constituents about the devastation that would occur in prisons, in courts and in mental health,” Clouse said.

While House Republicans supported the proposal, the GOP leader in the Senate expressed uncertainty.

“I’m not convinced right now my members are in a position to support any tax increases,” said Senate President Pro Tem Del Marsh, R-Anniston.

Bentley issued a statement praising Republicans for agreeing about the need for taxes, but said the plan won’t be enough.

“I applaud the House GOP Caucus for agreeing with me that tax increases are needed to address the revenue shortfall in the General Fund,” Bentley said. “However, their proposal raises only a portion of the needed revenues for state agencies to operate on October 1.”

House Minority Leader Craig Ford, D-Gadsden, said the plan is “just a cover-up for buzzwords for taxes.”

“Since 2010 all they’ve done is legislate morality for the last five years, and now they’re actually having to handle the lead and this is the type of package that we see, just taxing the average Alabamian,” he said.

The Democratic minority has previously endorsed a plan to create a state lottery that would raise revenue for the state’s Medicaid program.

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