Alabama Tax Plan Faces Long Odds

Alabama voters go to the polls Tuesday Sept. 9 to decide the fate of Republican Gov. Bob Riley’s proposal to raise state taxes by $1.2 billion in order to close a looming budget gap and fund new education programs.

The tax increase hits Alabama’s wealthiest residents, corporations and large landowners hardest. Most low-income Alabamians would get tax cuts. The plan would raise nearly twice as much revenue as is needed to wipe out a $675 million budget deficit. The extra $525 million is slated to fund college scholarships, bonuses for teachers who agree to teach in rural and poor schools and performance-based contracts for school administrators.

State Rep. John Knight (D) told Stateline.org that if voters reject Riley’s plan, deep cuts to state government will follow.

“There will be cuts to education. There will be cuts to human services programs and to law enforcement programs. There will be drastic cuts across the board,” Knight said.

Riley, a conservative who became governor last January 21, introduced his proposal shortly after assuming office. He said his state had “no other choice” than to raise taxes to pay its overdue bills and improve education.

It was a stunning move for the three-term former U.S. representative who had boasted of never voting for a tax increase while in Congress.

“When Ronald Reagan was first elected governor of California, he faced a similar crisis. When asked why he was raising taxes, he replied, ‘Because I have no other choice.’ Neither do we,” Riley said in a televised speech.

In stump speeches and appearances before newspaper editorial boards, Riley regularly casts the upcoming referendum in religious terms, saying the state’s current tax structure is immoral because it taxes the poorest of the poor at too high a rate.

“When I read the New Testament, there are three things we’re asked to do: That’s love God, love each other and take care of the least among us,” Riley said recently, according to The Washington Post.

At present, Alabama collects income taxes from a family of four beginning at $4,600, the lowest threshold in the country. Riley’s proposal would raise the minimum taxable income level to $17,000 this year and $20,000 over the next three years.

A broad coalition of opponents that includes many prominent members of Riley’s own Republican Party as well as the Alabama Farmers Federation and the Christian Coalition of Alabama is fighting his plan.

“The Christian Coalition is unable to support any new permanent tax proposals to cure historical systemic failures and poor public policy of reckless and unmerited spending habits,” the organization’s board of directors said in a statement. The coalition’s president, John Giles, is touring the state to whip up opposition to the proposal.

So far, Giles and his allies appear to be succeeding.

A Mobile Register-University of South Alabama poll found that 57 percent of likely voters oppose Riley’s tax and education plan. Only 26 percent of likely voters said they support it.

The poll, which was conducted August 25-28, included responses from 805 registered Alabama voters and had a 3.4 percent margin of error. The figures represent a slight widening of the for-against gap as compared to earlier polls.

“Where we’re really hurting is among the people who are benefiting from this plan,” Riley spokesman David Azbell told Stateline.org. “There is a natural skepticism about Montgomery among the very poorest of the poor in Alabama, where when you tell them we’re going to lessen your tax burden, we’re going to give your kids college scholarships, we’re going to improve the public schools they go to, they just think it’s too good to be true.”

The plan’s supporters, a group that includes the Alabama Democratic Party, the Alabama Education Association and the Alabama Business Council, are undeterred by the adverse poll numbers. Many are treating the referendum like a campaign, crisscrossing the state to help it pass. But some supporters, such as state Sen. Hinton Mitchem (D), aren’t actively campaigning for it.

“I voted for it and support it next Tuesday, but I have not endorsed it or come out openly for it. The way I look at it, as a senator representing 140,000 people, if the governor has a program that he wants to present, then I think I have a responsibility to let him put that on the ballot. So I voted to let the people vote for it,” he told Stateline.org.

This past Tuesday, Ruben Studdard, winner of Fox Television’s “American Idol,” invited Riley onstage during a performance of Sweet Home Alabama, according to the Mobile Register. Studdard, an Alabama native, headlined the concert, which was organized by the Alabama Partnership for Progress, a business and civic coalition backing Riley’s proposal. Concertgoers were greeted at the door by people handing out pro-tax stickers, with posters and yard signs placed close by for the taking, the Register reported.

Another concert was planned for Friday night. On Saturday, Riley was scheduled to campaign all day at the Alabama-Oklahoma football game. On Sunday, Riley was expected to address the state in a live town-hall meeting.

Riley plans to call legislators into a special session within a few days of Tuesday’s vote to approve a budget for the new fiscal year, which begins Oct. 1.

“We’ve been working on two budgets in the budget office one for if it fails, one if it passes,” Azbell said. “The one for if it fails is not only dramatic cuts, but breathtaking cuts, in essential state government services. But what’s even worse is fiscal year 2004 looks like Club Med compared to fiscal year 2005, and unless we do something, state government in Alabama is pretty much going to grind to a halt in 2005.”