Orr bill would phase out grocery tax

MONTGOMERY — State Sen. Arthur Orr has drafted legislation that he said would phase out the grocery tax on food. The proposed bill would take one cent off the grocery tax every year on certain foods covered by the Women Infants and Children (WIC) federal program. Orr said.

The current grocery tax is 4%.

“Well it’s fairly simple,” said Orr (R-Decatur), chairman of the Senate Education Budget Committee. “The bill would eliminate the sales taxes over time on what we know as the WIC definition … It focuses on the healthy foods, which of course means the cost to the education budget, or to our educational systems, is lesser by choosing a narrower definition.”

Orr said his bill does include some “stop-gap” measures if the tax cut results in too much of a revenue loss to the education budget.

“The bill does have some stop-gap measures that, if the state revenues don’t grow over a certain percentage, we will hit a pause button and that would stop the further reduction of taking a penny off a year,” he said, “but if we grow by leaps and bounds over four years, you would see it gone over four years on those food items.”

Orr said the bill also would prevent local governments from using it as an opportunity to raise their own taxes.

“There’s been a real concern that if we take the tax off groceries in Alabama that the local governments will come in and replace it with local taxes,” he said. “This would freeze out any such action at the local level where they could not backfill and come in and raise taxes on the items in the WIC definition of food.”

Orr said he’s not sure if the bill stands a good chance of passing, but he’s going to make the effort to get it through.

“I have not talked to that many colleagues,” he said. “But as the budget chair … any such proposal will come through my committee so I want to make sure that for me, not that I’m any more special than any other legislator, but I also have got to watch the budgets in the long term revenue to support our educational systems.”

Orr said this is a good compromise between those who want to cut the grocery tax and those who are worried about depleting the budget.

“As far as the grocery tax, this is the top line, this is about as far as we can go today,” he said. “If someone came in and said ‘let’s just cut all the grocery taxes in the next few months in perpetuity forever,’ that’s something that would cause great difficulty and harm to our budgets.”