Alabama#039;s lesson for the country

Published 12:00 am Wednesday, October 22, 2003

The following is an editorial that appeared in the New York Times on Tuesday.

The Times make some interesting points.

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The budget ax is swinging in Alabama, and the carnage is piling up. A hundred and fifty fewer low-income AIDS patients will receive life-saving medicines from the state. Fifteen thousand low-income Alabamians may lose their hypertension drugs.

High Hopes, a program that offers after-school tutoring to students who fail the high school graduation exam, is being slashed. And up to 1,500 poor children and adults with Down syndrome, autism and other disabilities will not be able to attend a state-supported special-needs camp.

The cuts are reaching down to core government functions. The court system is laying off 500 of 1,600 workers, from clerk's office employees to probation officers. The health department is losing investigators who track tuberculosis, and sharply reducing restaurant inspections.

Alabama's huge budget gap is a result of the voters' rejection, nearly six weeks ago, of Gov. Bob Riley's tax reform plan, which would have generated an additional $1.2 billion, much of it from under taxed timberland. After the vote, Governor Riley was forced to cut most state agencies by 18 percent, and other recipients of state funds by 75 percent. Bad as things are, the impact is being blunted by a fortuitous one-time injection of federal funds. Next year agencies are bracing for a 56 percent hit. If the state cannot find more revenue – and Governor Riley is searching – it may be nearly impossible for basic services, including courts, prisons and police, to operate.

Alabama's disintegrating government is a problem, certainly, for anyone in the state. But it may also be a harbinger of where the nation is headed. There is a "starve the beast" ethic, currently fashionable among conservatives, holding that the best way to downsize government and end the social safety net is to get voters to demand lower taxes. But before we hurtle any further in that direction, we should think hard about whether we want the whole nation to look like Alabama does this year or, worse, next year.

Alabama is not a wealthy state, but its bigger problem is that it is not making an effort to raise the taxes it needs. It is 48th in the nation in state and local revenue as a percentage of personal income, according to Governing magazine. And it has the nation's least equitable tax system. Alabama's income tax kicks in for families of four earning just $4,600. Its property taxes are the lowest in the nation, Governing reports, and "heavily favor farming interests."

As a Republican congressman, Governor Riley strongly opposed tax increases. But when he took over the state government, he realized it could not run on the revenues coming in. He courageously offered up a tax package that raised the needed revenue while shifting the burden from overtaxed poor people to under taxed business interests. But the package was defeated by a skeptical electorate, with many of the no votes coming from low-income Alabamians, whose taxes would have gone down.

The voters were not entirely wrong to be skeptical. No budget is free of waste, not even Alabama's meager one. There is a state tradition of legislative pork, patronage controlled by key legislators. And powerful lobbies, notably the teachers' union, have long gotten more than their share of state funds. But Governor Riley has already trimmed much of the pork. And next year, he will no doubt take aim at teacher benefit packages.

It is easy to sell voters on low taxes, and a well-financed campaign by Alabama's business community – aided, shamefully, by the state Christian Coalition – did just that. What is harder, but vital right now, is making the more challenging case for why taxes, and sometimes even tax increases, are necessary.

One message Alabama voters needed to hear more clearly was that rejecting higher taxes costs more in the long run. Saving $10,000 by denying medicine to a poor, H.I.V.-positive woman is no bargain if she ends up in a state hospital with full-blown AIDS needing $100,000 in care. Tutoring high school students in danger of failing is cheap compared with paying for welfare – or prison.

Alabama voters also need to realize that by entrenching their state at the bottom of the national rankings in taxes and government services, they are putting themselves on the margins of the new, global economy, and sabotaging their future tax base. Businesses looking for low taxes and cheap government will pass right over Alabama and head for Mexico. And companies that want well-educated, skilled workers, the companies Alabama needs to attract, will not locate in a state where high school students do not graduate, TB cases are not tracked and the restaurants may be hazardous.

The nation is facing precisely the same issues as Alabama. The Bush administration has tried to delude the public into thinking we can fight a war, rebuild Iraq, fix our schools, get prescription drug benefits and still enjoy the largest tax cut in history. But the deficit cannot grow forever. Eventually, we will have to pay more or, as "starve the beast" proponents hope, do with much less.

Last month, Alabama voted for fewer social services, less education, and a shoddier legal system – to become, that is, more like a third-world nation. But low as taxes are, the state will never be better at being an underdeveloped country than actual underdeveloped countries are. Alabama's best chance, and the nation's, is to invest in its people and civic institutions, the things that set America apart.

National anti-tax forces are hailing Gov. Riley's setback last month as a great victory. But if Alabama heads into next year without additional revenues, students may have to learn without textbooks, prisoners may be released early, and people may start dying of preventable diseases. We should all pay attention, because if the "starve the beast" crowd continues to prevail in Washington, as goes Alabama so may go the nation.