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Published in Print: May 28, 2003, as Ala. Governor Urges Tax Hike To Stem Crisis

Ala. Governor Urges Tax Hike To Stem Crisis

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Seeking to avoid teacher layoffs and other painful budget cuts, Alabama's new Republican governor proposed a sweeping, $1.2 billion package of tax increases last week.

"I have spent most of my life fighting higher taxes," Gov. Bob Riley, a former member of Congress who took office in January, told Alabamians in a televised address May 19. "No one wants to raise taxes, especially me. And I don't like being forced to do it now, but I believe we have no other choice."

At the same time, the governor said that higher taxes alone were not the answer for Alabama, a state with a projected revenue shortfall of at least $600 million in fiscal 2004 and some of the lowest taxes in the country. Alabama's fiscal 2003 state budget is $17.1 billion. He argued that the revenue plans must be coupled with new accountability demands for state government and public education, including changes to tenure rules he said would "make it easier to remove incompetent administrators or teachers."

Gov. Riley called a special legislative session this month—interrupting the regular session—to deal with his package. If it passes, voters will decide its ultimate fate in a statewide referendum later this year.

The special session began May 19 and must end before June 9, when the regular session resumes.

The ambitious scope of Mr. Riley's plans caught many people by surprise.

"It's not only surprise—it's virtual shock," said Rep. Richard J. Lindsey, a Democrat and the chairman of the House education finance and appropriations committee. "It's a bold, ambitious plan, but it's one that Alabama has needed for a number of years, so I applaud his efforts."

Rep. Lindsey said that he thought the chances of getting the package through the legislature were good.

Tenure Changes

Gov. Riley warned that without new revenue, the state would have to take drastic action, such as laying off teachers, forcing senior citizens from nursing homes, and putting "felons back on the street."

"These are not scare tactics," he said in his address. "This is reality, and I cannot, in good conscience, order such cuts."

Observers say the governor has worked hard to build support for his plan from key education and business leaders, including the powerful state teachers' union.

"I think everybody involved in the [fiscal 2003] budget realized that the state has simply run out of money," said Paul R. Hubbert, the executive secretary of the Alabama Education Association. "We can't stand that kind of hit and maintain any semblance of quality."

The state is predicting some 4,000 layoffs of teachers and school support personnel in the next school year unless more revenue is found, said Tom Salter, a spokesman for the Alabama Department of Education. He said many school systems were already sending pink slips to nontenured teachers.

"By law, the teachers have to be notified before the last day of school whether or not they're going to be rehired," he said.

Mr. Hubbert said he was comfortable with the governor's plans on the accountability side of the equation, including the tenure measures.

"Nothing [would change] in the tenure law for teachers or fair-dismissal law for support personnel except the hearing process," he said.

However, for newly hired school administrators—including assistant principals, financial officers, and instructional supervisors—tenure would be replaced by performance-based contracts. Alabama already ended tenure for new principals in 2000.

"We are very accustomed to accountability, and that doesn't frighten us," said John C. Draper, the executive director of the Council for Leaders in Alabama Schools, a group that represents school administrators.

He called the overall plan "the most positive package we have seen in the history of this state."

'High-Stakes Gamble'

Other proposed changes include requiring school superintendents to receive training and testing on fiscal management, and gradually increasing the number of school days from 175 to 180.

Gov. Riley also wants to add money to the state's reading, and math and science programs. At the same time, educators would pay more for health insurance.

The new tax revenue would come mostly from changes in income, property, and sales taxes.

If the legislature enacts his package, Gov. Riley will take the entire plan—not just the tax hikes—to Alabama voters in a referendum. That step could be a tougher sell than getting the legislature on board.

"'Billion-Taxer Bob' is the phrase that's currently floating around," said David L. Martin, a professor emeritus of political science at Auburn University.

"It's a high-stakes gamble," he added. That is especially the case, he argued, because "there's no indication that Riley has a Plan B."

He added that the plan would make the state's tax system more equitable. Gov. Riley would significantly raise the threshold for owing income tax, now $4,600.

"Wealthier people would pay more," Mr. Martin said.

Vol. 22, Issue 38, Pages 14,17

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