Alabama Legislature Gives Approval to the State’s Largest Tax Increase

The Democrat-controlled Legislature approved the largest tax increase in state history Saturday -- a $1.2-billion package that now goes to a vote of the people.

Republican Gov. Bob Riley pushed through a package built largely on property tax and income tax increases while Alabama struggles through its worst fiscal crisis in decades.

“For 100 years, we have been trying to do some of the things that happened today,” Riley said.

The package would plug a $675-million deficit in state budgets, institute government accountability measures and provide funding for new education programs, including college scholarships for “B” students.

The package would also alter what is ranked as one of the most regressive tax systems in the country by reducing property and income taxes on Alabama’s poor while raising taxes on many middle-income and all upper-income families.

But it hinges on voters statewide accepting or rejecting the plan Sept. 9, a referendum required in Alabama for most tax measures to become law.

Farmer and timber groups hope to defeat the proposal by portraying it as a threat to Alabama’s agricultural heritage.

“It’s going to hurt farmers. All farmers will see their taxes go up 300 to 400%,” said Paul Till, spokesman for the Alabama Farmers Federation.

Senate President Pro Tem Lowell Barron, a Democrat who helped guide Riley’s package through the Legislature, said a bipartisan effort combined with a record budget deficit created the climate for historic change.

“Something of this magnitude could happen once every 100 years. The significance is a realignment -- a Republican governor proposing a very progressive tax package that most people would deem something that more liberal Democrats would do,” Barron said.

If the proposal fails at the polls, state officials said they have two choices: raise taxes that don’t require a vote of the people, such as sales taxes, or release prisoners, cut medical services to the poor and elderly, and end football and band programs in high school.

Jess Brown, a political scientist at Athens State University, said Riley’s package would be difficult to pass because Alabamians have a long history of opposing property tax increases, even for school funding.

“This opposition to property taxes has deep historical and cultural roots in the state,” he said.

Riley is selling the package as more than a way to fill a budget deficit. He said it would “change Alabama for generations” and bring fairness to an “immoral tax system” that has long treated the state’s poor unfairly.

Wayne Flynt, an expert in Southern political history at Auburn University, said Riley’s morality argument wouldn’t work in more secular states, but it appeals to conservative Christians in a Bible Belt state.

“He is locating the debate in the Bible and biblical justice to the poor. I think the whole nation is mystified by that,” Flynt said.