Every Republican governor who thinks of raising taxes next year will walk past Traitor’s Gate and see Bob Riley’s head on a pike.” That is how a spokesman for Americans for Tax Reform responded to the Sept. 9 lopsided defeat of the Riley tax plan.
The Alabama Tax Accountability Coalition was kinder. Their spokesman said, “The electorate is much smarter than people realize and they are fed up with Montgomery and the way politicians spend money.”
Whether Gov. Riley’s head ends up on a pike remains to be seen. However, there is little question about the distrust Alabamians have of the state’s political structure. Poll after poll indicates widespread distrust of Montgomery. Campaign ads against the proposed tax increase effectively played on that distrust and cynicism prior to the vote.
Eliminating waste in state government is the starting point for solving the state’s budget crisis according to the majority of state residents. That is one reason we wrote in the April 10, 2003, edition that “Until the state Legislature cleans up its own act, it is unlikely Alabama voters will ever approve the major changes needed in the state’s tax structure.”
The 2-to-1 vote against the proposed tax plan proved that prediction too true.
It is simply impossible to understand nearly $60 million being used by legislators for pet projects, discretionary accounts, community service grants and other items commonly known as “pass-through-pork.”
That is about 10 percent of the state’s current budget deficit. It will take more than a press conference announcement that legislative “pork” is dead to convince voters this long-standing practice is a thing of the past.
Interestingly few people attacked the need for tax reform in Alabama. We do have a regressive tax system that places more of a burden on the poor than on the wealthy. That is why Alabama Baptists, during their annual meeting in 2000, called for a new tax system that would bring “relief and justice to the poor.”
But agreement on the problem does not mean agreement on the cure. The majority of Alabamians and, undoubtedly, the majority of Alabama Baptists, judged the cure proposed by the Riley tax plan to be worse than the problem.
Even though it was commonly acknowledged that the proposed tax plan shifted a larger share of the tax burden to the wealthier and to the business community, Alabamians said the plan was too big, too complicated and too scary. New taxes on selected services created the notion that everyone would end up with higher taxes.
Add to the mix the nearly 80-year-old state practice of low taxes and low investment in state infrastructure and one realizes it was probably unrealistic to expect Alabamians to make such a dramatic mind change during a short four-month campaign.
Now what will happen? No one knows. The state Legislature is in special session this week trying to answer that question. Some predictions are grim. The most vulnerable among us seem to be at greatest risk. We only know that at the end of the session, there will be a balanced budget and no new taxes.
One unexpected place the budget ax is falling is on independent colleges, including Baptist colleges. The Alabama Student Grant Program provides state residents attending private colleges in Alabama a grant to help defray the cost of their education. The actual amount has been declining for several years. The current allocation of $5.3 million divides out to $600 per student.
Private college presidents argue the $600 investment the state makes in a state resident attending a private college amounts to less than 10 percent of the investment made in a student attending a public college and university in Alabama. As such, the private school investment is a bargain for the state.
According to information made available prior to the special session, the Alabama Student Grant Program is slated to be zeroed out. If that happens, private colleges like Samford University, the University of Mobile and Judson College will take a significant financial hit. The grant program provides actual dollars students bring to the institutions. The dollars are not book numbers and cannot be offset by institutional scholarships.
Reducing the Alabama Student Grant Program by the same percentage of cuts in other programs seems more prudent to the private college community and to us. Eliminating this good program entirely seems a questionable decision. But none of the options are good. There is too little money and too many needs.
Despite the outcome of the Sept. 9 vote, it needs to be remembered that according to a March poll, Alabamians said they were willing to support higher taxes once they are convinced waste has been eliminated from state government.
Hopefully the governor and the Legislature will speedily address such issues as waste, duplication, inefficiency, “pork” and other problems that cause distrust and cynicism of Montgomery. Once that is done, perhaps a cure can by found for the problem of Alabama’s unjust tax system. The problem is not going away by itself.
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