Alabama budget chairmen Friday said support for Gov. Kay Ivey’s proposed tax rebates has softened since first discussed in early March.

“The rebate that’s been suggested will probably be moderated to some level,” Senate Education Budget Chair Arthur Orr, R-Decatur, told AL.com.

Ivey proposed $400 rebates for people who filed Alabama income taxes in 2022, or $800 for families. Overall, the governor proposed sending $967 million in rebates.

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House Education Budget Chairman Danny Garrett, R-Trussville, said support for the rebate idea has “softened” in the House of Representatives.

“People are looking at is that the best way [to spend the money],” Garrett said. “The House has never been opposed to rebates, but they’ve never been gung ho and over time, that support has softened a bit.”

“You take a rebate and you divide it over multiple classes,” Garrett added, “and it may be significant or it may not be significant. You’re probably excluding people that are not going to be happy if they don’t get a rebate. And then you have some people who say for that amount of money, I would rather you do something for my local school or something that would be an investment of some type.”

Neither offered an alternative rebate amount. Both said they’re still studying possibilities.

The cost of the rebate is expected to come out of $2.8 billion in surplus tax collections in 2022. Both lawmakers said they aren’t sure they’ll spend all of it, and are considering putting some into a savings account that can be accessed when needed.

“Right now, the only savings account we have, we can only access in proration,” Garrett said.

Proration occurs when tax receipts come in below expected levels and budgets must be cut during a budget year.

Orr and Garrett said they expect there will be tax reductions and some permanent tax cuts going forward, but didn’t specify what those could be. Lawmakers appear poised to cut Alabama’s tax on groceries, and Orr is shepherding tax cuts for those at the lowest level of the income scale.

Orr said lawmakers could consider the education budget and supplemental spending bill as early as the first week in May.

Read more: Bills to make modest cuts to Alabama income tax advance.

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