Franchise tax solution should be start of overhaul

Published 12:00 am Friday, December 10, 1999

Forgive this play on words but for the Alabama Legislature it is out of the franchise tax pan into the wine tax pan.

The Legislature in a belated but expeditious manner resolved the franchise tax crisis in the recent special session. To give them a "Standing O" for their rare workmanlike performance would not be justified. What they did should have been done months ago.

But with that crisis behind them they are faced with another crisis, albeit not nearly so threatening as far as dollars and cents are concerned.

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Decades ago the legislature imposed a tax on Alabama winemakers (and there is only a handful of them) which was dramatically lower than the tax imposed on out-of-state wineries. (If that sounds familiar it shouldthat was precisely what was constitutionally wrong with the franchise tax.)

It was a given that sooner or later the out-of-state wineries would challenge the law. In fact there are countless letters on file dated back years ago from Alcoholic Beverage Control Board execs warning the legislature that this would happen.

Nothing was done and now the chickens have come home to roost. The out-of-state wineries went to court, and the courts predictably declared the tax imbalance unconstitutional.

We are not talking about nearly as much money as was involved in the franchise tax affair, but in this instance the out-of-state firms are demanding a refund of all the taxes they paid under the old formula. It could add up to tens of millions of dollars.

What we have here is one more example of why a major overhaul of Alabama's tax system is needed. Is it likely to happen on Gov. Siegelman's watch? Not likely.

Give Rep. Alvin Holmes, D-Montgomery, a few points for persistency. He tried again in the recent special session to get the "Heart of Dixie" slogan off Alabama's motor vehicle license plates. He didn't succeed, but like Gen. McArthur of old, his parting words were "I shall return."

His latest effort would have provided that the state produce tags with and without slogan, thus giving the people an option as to what tag they would display.

Holmes says he will try again in the regular session. You can bet the farm on that.

A few of us old political hacks can remember a time when no Alabama politician would be caught dead riding in a foreign-made automobile, especially in North Alabama where labor union membership was particularly strong.

To be seen riding in a car not made with union labor was a political no-no. The politicos could all whistle the song: "Look For The Union Label."

Now comes the announcement that the official mode of transportation for Gov. Siegelman will be a Mercedes-Benz M Class sports utility vehicle made at the firm's huge plant in Vance near Tuscaloosa.

The governor got a sweetheart deal that none of you are likely to get from your local automobile dealer; A three-year lease at no cost. Maintenance and insurance will be provided by the state, but that's all.

The first statewide poll on the 2000 presidential election in Alabama had to be encouraging for state Republicans who are still licking their wounds from the 1998 debacle.

The survey done by a Mobile newspaper showed likely GOP nominee George W. Bush outpolling Democrat A1 Gore by almost a 2-1 margin-43 per cent to 22 per cent.

Alabama Republicans are hopeful that their candidates for state office in 2000….most especially in the judicial races…can ride the Bush coattails to victory.