RILEY TAX PLAN TARGETS ALABAMA INSURANCE INDUSTRY
MONTGOMERY, Ala.-- Officials of Alfa Insurance Companies announced today that an analysis of Gov. Bob Riley's tax plan shows Alfa Companies alone will pay $9 million in increased taxes annually, convincing evidence that revenue paid by Alabama's insurance industry will increase by much more than the Riley Administration's estimate of $10 million per year.
"Alfa policyholders will pay more than half the governor's estimated $10 million just in tax on labor for repairs on insurance claims," said Al Scott, senior vice president. "These costs will trigger increased premium costs for our customers as repair costs increase." He added that this labor tax on repairs would hit all consumers, including the poor, not just policyholders with insurance claims.
"We're very concerned about the impact of these additional taxes on one industry when insurance premium taxes are the number one source of the state's general fund revenue and already make up 17 percent of that state budget," Scott said. Under the Riley Plan, Alfa and its policyholders will experience other tax increases through higher excise tax, higher property taxes and higher lease taxes on automobiles, according to Scott.
"We should also be aware that these cost estimates are only for the first year of the new taxes. As costs increase, so will the new tax, and the total tax burden on the working men and women of Alabama will increase as well," Scott said. The Riley Plan places an unfair burden on our half-million policyholders in Alabama and leaves us no choice but to oppose this increase. "We are working to educate our policyholders and the public about the effects of this plan," Scott concluded.