Deal pushes Education over the Cliff
MONTGOMERY, Ala. (AP) — 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.