Legislature Moves to Make Alabama Tax Code More Transparent

By Bill Hightower

Today the Alabama legislature passed a bill to protect taxpayers and enhance government transparency. It requires the non-partisan Legislative Fiscal Office (LFO) to produce an annual tax expenditure report detailing all tax incentives, exemptions, credits, and deductions provided during the prior tax year, which is more than $2 billion each year. The legislation was sponsored by Senator Bill Hightower (R-Mobile) and Representative Terri Collins (R-Decatur) and is a key part of the Republican Senate Caucus’s “Paving a Path for the Future” 2015 legislative agenda. The legislation now goes to Governor Bentley for his signature.

“The public deserves to know how Montgomery is crediting, exempting, or spending our citizens’ tax dollars,” said Senator Hightower. “Every year, Alabama gives away over $2 billion in incentives, credits, and exemptions, and there is no one place to go to gather this information. Now the legislature will have an annual report to help solve that problem.”

The legislation requires the Legislative Fiscal Office to begin preparing a tax expenditure report in 2017. The report will coincide with the Governor’s annual budget proposal to the legislature, which happens at the beginning of each legislative session. The report will serve legislators as they craft policy by detailing where exclusions to the tax code go each year. It will also be made publicly available online.

“Over the past several decades, politicians who controlled Montgomery awarded hundreds of tax exemptions, deductions and credits to their special interest groups. It is time for us to closely review these special interest tax breaks and decide which ones may be justified and which ones need to go. If the average man, woman and family who pay taxes in Alabama don’t get special treatment, the Montgomery insiders shouldn’t either,” remarked Rep. Collins.

National rankings show that Alabama needs to improve transparency of its tax and revenue policy. The tax expenditure report will shine a light on state government and improve Alabama’s national ranking.

“I commend Senator Hightower for his hard work on this Alabama Senate Republican agenda item,” said Senate Majority Leader Greg Reed. “This legislation makes state government more accountable to the people and pushes the state toward better fiscal responsibility.”

Senator Bill Hightower is a Republican representing Mobile County in the Alabama State Senate. Follow Sen. Hightower on Twitter for the latest legislative updates: @hightower_bill

 Representative Terri Collins is a Republican representing Morgan County in the Alabama House of Representatives. She is chairwoman of the House Education Policy committee.