ALFA PRESIDENT OPPOSES RILEY TAX INCREASE
The following guest editorial was submitted to newspapers throughout the state. The author is Jerry Newby, president of the Alabama Farmers Federation and Alfa Insurance Co.
By JERRY NEWBY
|Alabama Farmers Federation President Jerry Newby|
President of Alabama Farmers Federation
There are dozens of reasons why Alabamians will vote "no" to Gov. Bob Riley's $1.2 billion tax package Sept. 9, but there are four indisputable facts that should cause even tax proponents to question this plan.
First, the $1.2 billion tax increase is almost twice as much as the governor says he needs to balance the state's budgets. Second, the plan lacks the "fundamental change" and accountability measures the governor said are necessary to move Alabama forward. Third, almost 90 percent of the $1.2 billion tax burden will be borne by individual taxpayers. And finally, there is no guarantee that a single penny from the plan will be spent for the programs the governor says he wants.
The proposed $1.2 billion tax package is the largest in Alabama's history, and many economists say, by the time it is fully implemented, the actual price tag will be more like $2 billion. The size of this package should cause concern among fiscally responsible people. Approving a $1.2 billion tax plan to plug a $675 million budget deficit makes no more sense than taking out a $40,000 second mortgage to pay off $20,000 in credit card debt. With no budget or spending guidelines, the extra money soon will be gone, and the state will be facing yet another financial crisis.
Gov. Riley was elected on a platform of bringing accountability to Montgomery, but this package does nothing to rein in reckless spending by vote-hungry politicians. Gov. Riley campaigned on the necessity of prior-year budgeting, but under his plan state budgets still would be based on optimistic revenue projections. This practice has forced Alabama into proration and economic crisis time and time again. Without prior-year budgeting, the state will continue to live from crisis to crisis--each time demanding more money from Alabama taxpayers.
Despite what you may have heard, working families will do the heavy lifting on this massive tax hike. You will pay more property tax on your home and land; you will pay more tax when you buy a car or home; you will pay more tax when you lease a vehicle; you will pay more tax when you renew your vehicle license tag; for the first time ever, you will pay sales tax on labor for vehicle and home repairs; and many working-class Alabamians (not just the rich) will pay more state income tax.
Even more disturbing is how this plan opens the door for future tax increases. Only next time, we won't get to vote on them.
Earlier this year, the governor directed the state revenue commissioner to have all property reassessed every year. That means--even if the tax package is defeated--Alabamians will see their property tax increase every year. We also could see our property taxes skyrocket if county and municipal governments follow the state's lead in increasing the rate of taxation on homes and farmland from 10 percent to 100 percent. The Riley administration already has admitted the new state sales tax on repairs will be collected at the full local sales tax level of six to 10 percent--not the state sales tax rate of 4 percent. This is a regressive tax that will be most costly to those who can least afford it.
The truth is: none of us will really know how much this plan will cost us until we start taking money out of our wallets. But it surely will be more than even those who oppose the tax package are predicting.
Some of you may be willing to spend more to improve education and state services. The only problem is this plan doesn't provide one penny for scholarships or anything else. It simply creates a $1.2 billion slush fund for the Montgomery politicians to spend as they see fit.
The governor came to Montgomery promising to end waste and corruption. It's hard to believe he accomplished those goals in four short months before he introduced his record-breaking tax increase. Until our elected officials prove they can budget our money wisely, it's inconceivable to expect Alabamians to vote for a billion-dollar tax increase.