Beware of coming “Tax Cut” campaigns
By Staff
Johnny Mack Morrow
Columnist
Alabama has the lowest taxes in the nation, according to the U.S. Bureau of Economic Analysis. This fact may come as a shock to state politicians who are calling for tax cuts as a cure-all for everything from the recession to the common cold.
The fact is that in Alabama you pay less in state and local taxes than anywhere else in America.
That also means state government does more with every tax dollar, simply because we have less of them and the same responsibility to educate our children and provide critical services like public health.
First and foremost, the reason why Alabama is the lowest tax state in the nation is because Alabamians want it that way. When Gov. Riley pushed for the largest tax increase in history in 2003 with Amendment One, voters went to the polls and voted it down overwhelmingly.
He has not tried another major tax overhaul since, saying the people have spoken.
The Legislature has listened to the people and has kept taxes as low as possible while still maintaining essential public services. This hasn’t happened overnight—it has happened over many years of votes, and many years that Democrats have been in the majority in the Alabama House and Senate.
Again, it may come as a shock to the hyper-partisan and the folks who fling political rhetoric; it was Alabama Democrats who have kept taxes the lowest in the nation.
Now as we get into the election season we start to see commercials and speeches about tax cuts. It is important to be honest with the facts and also about what is best for the state in the long run.
The question is when we are already the lowest in the nation, should we cut taxes further and what would be the outcome of such an action?
Let’s take a cut in the income tax for example.
Every penny of income taxes paid by individuals and corporations is earmarked solely for education.
Every dime of income tax goes directly into the Education Trust Fund that pays for every classroom in the state, as well as invests money into our colleges and universities.
A cut in income taxes is a cut in the Education Trust Fund.
As it stands now, the Education Trust Fund has $1.5 billion less than just two years ago because of the recession and the rise in unemployment.
Because the Alabama economy is still in the doldrums, we are looking at a $450 million deficit for next year for the state K-12 budget, on top of the $1.5 billion loss. We have eliminated everything from textbooks to transportation, and still there may be layoffs of thousands of teachers just to balance the budget.
Lowering the state income tax would mean even more hurt and a larger school budget cut. It is as simple as that.
Washington politicians often say tax cuts will pay for themselves because it will supposedly stimulate the economy and therefore generate more tax revenue. Some Alabama politicians may also use this pie-in-the-sky reasoning for a state tax cut.
Let’s look at reality for a second.
Alabama already has the lowest taxes in the nation, far lower than Georgia or Florida, yet our economy and unemployment are the same or worse than our neighboring states. The instant benefit of lower taxes these Washington politicos constantly talk about is not seen.
However, we see all too well the devastating effects of less funds going to schools. A tax cut would be another hit in an education system already reeling.
Also, by cutting education now we cut future economic growth, because one great truth is better educated young people get better jobs.
There is no merit in tax cuts that would lead to further cuts in education. Yet, in this election year, look for the “tax cut” as a mainstay in some campaigns.
We should be proud of our lowest taxes ranking, but we should never mortgage our future for a cheap political ploy.
Johnny Mack Morrow is a state representative for Franklin County. His column appears each Wednesday.
