On Friday, Sept. 1, 2023, the 4% grocery tax in Alabama was lowered to 3%. According to CBS42, using data from the USDA, the tax reduction could save a family of four about $150 a year.  

But why, exactly, did they lower the taxes in the first place? According to opelikeaobserver.com, “The grocery tax has long exemplified regressive taxation, burdening those with fewer resources by requiring them to pay proportionally more than wealthier individuals. Reducing the state grocery tax is a step in the right direction for tax justice.” 

According to multiple sources, the end goal is to get rid of grocery tax entirely. This would significantly reduce the amount of money customers spend on groceries each year.

Alabama Gov. Kay Ivey stated, “As Alabamians and Americans alike are grappling with tighter times, I am hopeful that this decision by the Legislature to slightly reduce the sales tax on certain food items will be truly felt by Alabama families.”

Next year, on Sept. 1, 2024, the tax is set to lower again, from 3% to 2%. It seems like only good can come out of this decision, right? Unfortunately, while reducing the grocery tax will save money on groceries, it will also reduce revenues to the Education Trust Fund (ETF) by an estimated $300 million a year when fully implemented, according to AL.com. The tax collections to the Education Trust Fund will have to rise at least 3.5% to offset the loss, according to apnews.com. The Education Trust Fund budget funds all public schools in the state, according to aplusala.org. 

Some people might think it’s not a big deal to lose a little funding for education, but we all benefit from a well-funded public education system. If we lose too much funding from education, there will be long-lasting effects on our community. Is this change for the better or worse? I would argue that affordable groceries and a well-funded public education system are equally important. It’s going to be a delicate balance to achieve both goals simultaneously.