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 Legislature's top financial expert is forecasting lawmakers will have more money to appropriate for education programs, but less for other state operations.
The director of the Legislative Fiscal Office, Norris Green, gave legislators a forecast Tuesday showing that revenue for the education budget should grow by $238 million in the new fiscal year starting Oct. 1. That means the budget could grow from $5.55 billion this fiscal year to $5.79 billion in the new year.
Alabama legislators will get an overview of the state's financial situation before they begin their 2013 legislative session at noon.
The director of the Legislative Fiscal Office, Norris Green, and the state finance director, Marquita Davis, are scheduled to address legislators at 9:30 a.m. Tuesday in the Capitol. The financial overview is the traditional kickoff for each year's session.
Legislative budget committee chairmen says revenue for the state General Fund budget looks flat for the next fiscal year, but prospects for the education budget are picking up.