Cutting School Revenue
5:12 pm
Mon February 11, 2013

Fiscal Cliff Settlement Costs Ala. Schools $70 M

Experts say the fiscal cliff settlement could cut funding to Alabama public schools by as much as $75M.
Experts say the fiscal cliff settlement could cut funding to Alabama public schools by as much as $75M.
Credit istockphoto

Financial experts say the fiscal cliff agreement in Washington will cut funding for Alabama's public schools and colleges by at least $70 million annually.


The fiscal cliff settlement affects Alabama differently than most other states. That's because Alabama is one of the few states that provides its citizens with a state income tax deduction for the federal taxes paid. The federal settlement allowed a temporary reduction in payroll taxes for Social Security and Medicare to expire. It also raised the tax rates on the wealthiest 1 percent of Americans.


The director of the Legislative Fiscal Office, Norris Green, says the two changes should reduce Alabama's income tax collections by $70 million to $75 million annually.


The impact is on education because Alabama sets aside its income tax receipts for education.


Copyright 2013 The Associated Press.