Tax hike passes Senate; up to voters now

Published 12:00 am Saturday, June 14, 2003

Who would have believed that a Republican Governor who never supported a tax bill in four terms in Congress would successfully push through a conservative Alabama Legislature the largest tax increase in the state’s history?

Does this once again prove the ole saying, &uot;politics makes strange bedfellows.&uot;

When I first saw the 23-bill package that covered everything from ‘soup to nuts’, I did not give it much of a chance.

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But as the facts came out about the justifiable need that exists and the fairness of the tax proposals, I began to concede that there was some chance for something historic to happen.

And indeed it did.

At 3:30 p.m. Saturday we met and passed the final three bills in a package of tax and accountability reforms that will net more than $1 billion in new revenue.

These bills include increases and decreases in taxes for Alabama citizens.

I will attempt to give you a short version of exactly how this package of reforms might affect you.

First of all, if you make less than $20,000 per year, you will pay no Alabama income tax under this new law.

Previously, the tax schedule kicked in at $4,600 and you had some tax obligation, albeit small.

This is a significant change for low-income wage earners.

There is one new tax which will affect every consumer.

A new sales tax was placed on services where there is an installation or a repair, such as to an automobile or a home appliance.

There is a slight increase in the tax on the purchase or lease of an automobile.

If you are a timber farmer, and have more than 2,000 acres of timberland, then you will pay additional taxes.

Presently all timberland fits in a category called current use, which can provide a below-market assessment for tax purposes, but this legislation put a 2,000 acre cap on tax filers who choose the current use option.

The biggest income producer in the package was the property tax bill which affects all homeowners.

Each homeowner in the state will pay more property tax if this package passes with voter approval.

One bill in the package did not survive.

There was a proposal to tax certificates of deposit, stocks, bonds and other intangible property.

Many of us thought this was very unfair in that it taxed money which had already been taxed, such as a savings account.

This bill died in the Senate and there was no active role on the part of the Riley Administration to revive it.

So you might say that we had a consensus that this bill should not pass.

I supported most of this package because I am persuaded that the citizens of Alabama need and deserve services which they cannot presently get with the amount of revenue coming into the state treasury.

We do not have enough prison guards, we do not have enough state troopers, we are way behind in our senior citizen services, such as medicaid, and we are losing teachers left and right to our sister states.

I have also seen over the past quarter century Alabama government approach solutions with patchwork efforts, never planning ahead and always wanting to ask the taxpayers to solve a problem in a crisis.

I consider this a long-range solution, and I will oppose any and all efforts to come back to Alabama citizens for more money to solve the same problems.

One final important note – you, the people, will have the final say on whether or not any of these taxes go into effect.

There will be a statewide referendum on this issue on September 9, 2003, and you can voice your opinion through the ballot box.

This is the way it should be.

Until next time, remember &uot;I’ll go with you or I’ll go for you&uot; to help you solve any problem related to state government.

Senator Wendell Mitchell can be reached at 334-242-7883, or by writing to P O Box 225, Luverne, Alabama 36049.