Goat Hill Report- Week Ending March 7, 2025

This week the Alabama legislature completed the fifth week of the 2025 session. The legislature was in session for a three-day week, which means they were on the House and Senate floor on Tuesday, Wednesday and Thursday with committee meetings largely on Wednesday. As previously mentioned, the legislature will be taking off next week, will be back in session the following week (week of March 17), and then will take off the following week (week of March 24). Please note: due to the legislature’s break next week, there will be no weekly legislative report next Friday. The legislature has now completed 13 days, nearing the halfway point of the (maximum) 30-day session. The session is expected to wrap up in mid-May. Details of this week’s notable action and news items are provided below.

House Takes Aggressive Steps on Tax Cuts

Prior to this week, there had been little discussion of new tax relief in the current legislative session. One pending question is whether lawmakers will extend a recent law (currently set to expire in May 2025) exempting overtime pay from state income tax. The cost to the state of that cut, which has been in place since 2023, has been drastically higher than originally estimated. The fate of that measure is still unclear at this point, but House leadership has signaled in the last two days they are likely to prioritize other tax relief measures this year.

On Wednesday, Alabama Republican Party Chairman John Wahl issued a statement that he was working with House leadership on a 4-bill package that would bring approximately $191 million in taxpayer relief. Wahl suggested the bills could be introduced and moved quickly, and that was confirmed when Rep. Danny Garrett (R-Trussville) – who chairs the House Ways & Means Education budget committee – filed the package on Thursday morning. As proposed, HB386-389 would do the following:

1. Reduce the state sales and local sales tax for groceries a full percentage point (from 3% to 2%)
2. Eliminate certain limitations on local sales and use tax for groceries – paving the way for local governments to pursue further reductions
3. Increase the state exemption for taxable retirement income (from $6,000 to $12,000) for individuals 65 or older
4. Expand the optional standard deduction for individuals/married taxpayers for certain gross income levels and adjust certain dependent exemptions

After the bills were introduced, Chairman Garrett’s committee met to consider his proposal and gave a “favorable report” to all of the bills – setting the stage for the tax relief package to be on the House floor on Tuesday, March 18th when the Legislature returns from its scheduled break. Regarding the tax relief developments, House Speaker Nathaniel Ledbetter (R-Rainsville) stated: “We continue to balance responsible financial stewardship with meaningful relief that directly benefits our citizens.” It remains to be seen how the Senate leadership will respond to this fast-track strategy from the House.

DOGE-like ACES Commission Announces Meetings

Alabama House Speaker Nathaniel Ledbetter (R-Rainsville) and Senate Pro Tem Garlan Gudger (R-Cullman) sent a memo to all state agencies demanding transparency and cooperation in their ongoing efforts to improve government efficiency. The two legislative leaders are conducting these efforts through the Alabama Commission on the Evaluation of Services (ACES), which will hold a series of public hearings in March and April. Although reminiscent of President Donald Trump’s Department of Government Efficiency (DOGE), ACES was established by the state of Alabama in 2019 to assess the effectiveness of state agencies and services and to make recommendations for improvement. In the memo sent to all Alabama state agencies, Ledbetter and Gudger stated that any agency that refuses to share information relevant to government expenditures for ACES to evaluate will be “reported to legislative leadership,” as well as to the budget chairs of both chambers. Ledbetter and Gudger also ask in the memo that each agency assign one employee to serve as a person of contact for ACES. Government efficiency has been an active and bi-partisan topic in the legislature, with Alabama House Democrats recently unveiling a three-bill package designed to improve government efficiency. Gov. Kay Ivey has also been a vocal advocate of improving state government efficiency, and she has offered public comments supporting Ledbetter and Gudger’s efforts to further streamline the exchange of information between ACES and state agencies. The first of the public hearings is set for March 19, where ACES Director Marcus Morgan will give a presentation before the House Committee on Fiscal Responsibility to educate lawmakers on ACES’ accomplishments over the past several years.

Political News: Tuberville Running for Governor?

As the 2026 election cycle approaches, the biggest political news item of the week was U.S. Senator Tommy Tuberville’s public statements that he is looking at a run for governor next year. Tuberville told several news outlets that he believes he has a good chance to win, but said he hasn’t made up his mind yet. He noted it would be hard to leave his current position with Republicans in power in Congress. Since his Senate seat and the governor’s seat are both on the ballot in 2026, Tuberville would have to choose between the two offices. The former Auburn football coach has been talked about the governor’s race for months, and his decision will have an impact on the races for other state offices as prospective candidates size up their chances and commit to specific races. The two officeholders who are likely most interested in Tuberville’s decision are Lt. Governor Will Ainsworth (R) and Attorney General Steve Marshall (R). With the governor’s office open since current Gov. Kay Ivey is term-limited, Ainsworth (who is also term-limited as Lt. Governor) is considered a frontrunner to replace Ivey, although a Tuberville candidacy would make him the favorite. AG Marshall, who is also term-limited, has announced he will not run for governor but is widely expected to enter the U.S. Senate race if Tuberville runs for governor. Sen. Tuberville indicated this week he would make a decision later this year, creating a good degree of political uncertainty until he finalizes his plans.

To view bills the ACIA is tracking related to the concrete industry CLICK HERE.

The Alabama Legislative will return on March 24th, 2025.