Over the years I have constantly heard that desperate times always call for desperate measures. With that premise in mind, it’s quite evident that state government in Alabama is facing a most desperate financial situation. It would be an understatement to say that we have a monumental fiscal crisis on our hands. Unfortunately, it’s a crisis that will only get worse unless some real changes are made in our tax structure. For at least the past 50 years, Alabama Governors and Legislators have consistently promised “no new taxes” when running for their respective offices. During that same period of time, however, we have seen programs that are funded out of the General Fund and Special Education Trust Fund “patched” to the point that there is no longer room for even a small patch to be applied.
Since the days of Gov. George C. Wallace, the state’s unofficial policy whenever fiscal problems arose was to “rob Peter to pay Paul.” We are now paying for that approach to funding programs in government and that’s bad news for Alabama citizens. A lack of long-range planning over the years has played a major role in our current financial problem. We have had no real long-range planning in state government, or at the very best a minimal amount, and that failure has caused our state to suffer greatly. I can never recall a time when we were in a worse shape in state government from a fiscal perspective. It’s time to do much more than cut budgets and layoff state employees and teachers.
Without any doubt, it’s time in Alabama to get rid of “unnecessary programs” both in state government and in public education. But to be realistic, there aren’t that many programs that truly can be described as being unnecessary. And, even if we got rid of those that do qualify, it would save us very little money. On the other hand, eliminating or even cutting back on necessary programs will hurt our state and will wind up causing tremendous fiscal problems in the future. I believe all agree that cutting out a single program that is “essential” would be a tragic mistake. So what is the answer?
As mentioned above, with state finances in terrible shape and budgets being considered that will hurt lots of folks, it’s time to start looking at ways to adequately fund state government, including public education. It’s good to see Gov. Robert Bentley take steps to close corporate tax loopholes for multi-state and multi-national companies. That’s long overdue and without question it should be done now. The Governor’s plan is a good one and hopefully will have strong support in the Legislature. In my opinion, cutting out corporate tax loopholes should be the first order of business.
Under current law, any increase in state income tax collections would go to the Special Education Trust Fund, the main source of state tax dollars for public schools and colleges. It’s been estimated that closing loopholes used by multi-state or multi-national corporations could raise about $200 million a year. Gov. Bentley should be commended for taking a bold step in this direction.
The tax burden in our state on middle and low income Alabamians is totally inequitable and grossly unfair. Those who can least afford to pay are hit the hardest. Also, small business owners pay their share of taxes and they should not be treated unfairly. We have let the huge corporations off the hook for years in large part due to the existing loopholes in our tax laws.
Even before the loopholes are dealt with and closed, we should take a close look at our system of ad valorem taxation and make the needed changes. Property taxes in Alabama are much too low, making a restructuring of how we tax property an absolute necessity. The inequitable tax burden on middle and low income Alabamians has been and continues to be a major problem. This has held our state back both socially and economically. When compared with how large landowners and timber companies are taxed in our state, most all Alabama citizens are being treated unfairly. It’s time to change things!
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