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Over the last several months, Alabama Gov. Bob Riley (R) has traveled throughout the state to promote his $1.2 billion tax increase. He promoted it as a way not only resolve the state’s fiscal crisis, but also to shift the tax burden from the poor to the rich, and to improve public education in Alabama. As voters traveled to the polls last week, it was apparent that the governor’s months of campaigning could not overcome decades of distrust of the state legislature. Expensive ad campaigns from the powerful national anti-tax lobby also played a large part in the campaign. When the smoke cleared, Gov. Riley’s tax proposal was defeated by a 67 to 33 percent margin, with those standing to benefit the most among the strongest opponents.

Before becoming governor in January 2003, Bob Riley served six years in the U.S. House of Representatives during which he never voted for a tax increase. So, why the sudden change of heart? “I’m tired of Alabama being first in things that are bad and last in things that are good,” theWashington Post quoted Riley as saying at an Alabama Rotary Club meeting.

Had the governor’s plan passed, Alabama teachers would have benefited most. Riley proposed lengthening the school year from 175 to 180 days over the next five years, providing teachers with a great deal more time for planning and collaboration. In addition, the plan would have provided bonuses to teachers who agreed to teach in high-need areas. It would also have invested more money in professional development for teachers. For students, Riley’s plan would have established merit-based college scholarships to two- and four-year colleges among students who achieve a qualifying score on the ACT.

To pay for these spending increases, Riley sought to raise the tax burden on wealthier individuals while easing the amount low-income families would have to pay. For starters, the plan would have raised the tax threshold at which individuals owe income tax from $4,600 to about $20,000 over the course of seven years. At the same time, he would have increased the income tax rate from 5 to 6 percent for individuals earning above $75,000 and $150,000 for married couples. He also sought to increase property taxes on homes, timberland, and farmland-although he did include some protections for smaller farms. Alabama now has one of the lowest property tax rates in the country. Under the current tax code, wealthier citizens pay an effective tax rate of 3 percent while the poorest pay 12 percent.

Alabama’s state tax code is written into its constitution and any changes require a constitutional amendment. The tax proposal therefore had to go before Alabama’s voters. From the outset Riley faced an uphill battle to overcome deep cynicism and mistrust of a state government that seemed to still operate under the “good ole boy” system of pork and patronage. Throughout his tour of the state, Riley attempted to explain the accountability provisions that accompanied the tax package. “There’s no way the legislature could ever do anything else with that money,” he told Education Week. “But when the opposition has TV ads saying, ‘It’s not going to education,’ then it clouds it.”

Opposition radio and television ads, combined with decades of voter distrust, proved too much to overcome. Groups such as Americans for Tax Reform, Citizens for a Sound Economy, and the Family Research Council actively campaigned against the tax increase. After the outcome became known, they portrayed the defeat as a warning to politicians across the country who are eyeing tax receipts as a way to balance the books.

Low-Income Voters Less Likely to Support Tax Package

As poll results started coming in, it appeared that the low-income voters who would stand to benefit the most from the tax increase were among its leading opponents. Interestingly, those who were more financially secure were more likely to support the proposal. According to the Washington Post, a University of Alabama at Birmingham poll taken a few days before the vote found that low- to middle-income voters opposed the tax increase by 30 percentage points while upper-income voters, the group facing tax increases, were opposed by a much lower margin, 14 percentage points.

After hearing Gov. Riley speak in Prattville, Ala., 81-year old lawyer Harold Howell was quoted by the Washington Post as saying, “I think everybody here feels like we’re overtaxed. But, you know, when you get down to it, what you’re asking for is peanuts compared to the incomes that people in this room here make. And it’s payback time for us. I got my education in this state, and I make a living out of this state, and it’s time to help the kids that’s coming up. I support you.”

In the end, according to the Washington Post, Riley’s own party came out against his proposal while its natural constituency-Democrats-kept their distance. Now, without a tax increase, Gov. Riley must consider other options, such as spending cuts to public schools, higher education, and Medicaid-to balance the state budget. Whatever the decision, it is the students in Alabama who continue to be cut out.

“Alabama Tied in Knots by Tax Vote”:

“Alabama Voters Reject Tax Increase”:

“Alabama Measure Would Raise Taxes and Hopes”:

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