Below are highlights of Gov. Bob Riley’s proposed tax, spending, and accountability plan, which goes before the state’s voters in a Sept. 9 referendum. The plan would do the following:
Accountability
- Impose criminal penalties on state agency directors who permit “pass through” appropriations, a practice by which an agency is directed by a legislator to spend money on an item not authorized by a line item in the state budget. (The governor recently barred pass-through appropriations by executive order.)
- Mandate that superintendents be trained and tested in finance, instruction, and school law.
- Require local school boards to hire chief school financial officers to verify receipts and expenditures.
- Require the state department of education to monitor the financial performance of school systems and call on them to standardize reporting practices and share financial information.
- Impose criminal penalties on local school personnel who deliberately fail to provide accurate financial information.
- End tenure for newly hired school administrators, including assistant principals, financial officers, and instructional supervisors. (Alabama ended tenure for new principals in 2000.)
- Expedite, and reduce the costs associated with, the dismissal of incompetent teachers.
New Education Spending
- Increase the number of instructional days from 175 to 180 over the next five years.
- Provide bonuses to teachers who agree to transfer to underserved geographic and subject-matter areas for a three-year period; provide scholarships to college students who agree to do so for three years once they are licensed.
- Invest more in professional development to fully implement the Alabama Reading Initiative and the Math, Science, and Technology Initiative.
- Establish merit-based college scholarships for students to attend two- and four-year postsecondary programs.
Taxes
- Increase the sales tax on such items as new and used cars, leased cars, and tobacco products.
- Add a new sales tax for product installations and repairs, such as replacing an automobile part or installing a new refrigerator.
- Raise the threshold at which individuals owe income tax. For instance, a worker in a family of four currently must begin paying state income taxes at an income of $4,600. That threshold would increase over several years to about $20,000.
- Raise the child tax exemption from $300 to more than $2,100 and tie the break to the federal exemption and deduction levels in the future.
- Increase from 5 percent to 6 percent the income-tax rate for earnings above $75,000 for individuals and $150,000 for married couples.
- Eliminate the deduction of federal income taxes from state income-tax returns.
- Raise the effective income-tax rate for businesses from 4.2 percent to 6 percent.
Increase property taxes on homes, timberland, and farmland (with some protections for smaller farms.)
SOURCE: Office of the Governor
