Before coming to Montgomery, Riley was congressman for the state’s third district, and while in Washington he was a strong supporter of tax cuts and school prayer. He campaigned on a platform of cutting spending and freezing taxes. Now Riley has proposed a revenue and education plan that will phase in tax increases totalling $1.2 billion by 2007. It’s passed the Democrat-controlled legislature, but must be approved by voters in a state referendum on September 9th. So what made Riley move away from his conservative roots?
Riley may have realized desperate times call for desperate measures. Like most states, Alabama faces budget problems, specifically a $675 million shortfall next year. Riley saw three solutions to the problem: He could gut state services, eliminating health care for thousands of seniors and endangering public safety. He could raise taxes just enough to fill the fiscal hole, but then, as he told his constituents, “We would still be last in education, last in social services, last across the board.” Alabama does suffer from some of the lowest quality of life standards in the nation. The economic boom that swept the South during the '90s bypassed this state somewhat, though in recent years new residents, some from the North, some Hispanic, have moved in, and the government did lure Mercedes and Honda to build new factories near Tuscaloosa and Birmingham. But now that the boom is over, the state needs a shot in the arm even more.
So Riley went for option three: He proposed the $1.2 billion plan, which not only fills the fiscal hole, but raises new revenues Riley plans to put toward helping the state’s poorly funded schools and establishing an extensive college scholarship program. It does all this by raising property, income and sales taxes, particularly on the wealthy, while at the same time cutting income taxes for the poor.
In any state, this would be ambitious. Most governors are handling the budget crisis by making painful cuts or by playing elaborate shell games with budget money; none are trying to use the crisis as an opportunity to reform their tax codes, shift the burden from the poor and strengthen public education all in one move of political jujitsu. What makes Riley’s plan courageous bordering on suicidal is the fact that Alabama is one of the most anti-tax, anti-government states in America. If Riley needs an example, he only has to look at what happened to his predecessor Siegelman, who came into office promising to fix the schools by establishing a state lottery. The measure had to be approved in a referendum, which began a bitter campaign between the lottery’s supporters and groups who opposed it on moral grounds. One distributed bumper stickers that read, “The Lottery What Would Jesus Do?” The referendum failed and Siegelman threw up his hands for the next three years, failing to come up with an alternative. The debacle led to his defeat by Riley.
A similar fight is now being waged, as grass roots organizations campaign for or against the plan, spending tens of thousands of dollars on television ads. Business and education advocates support the amendment, the farm and timber industries oppose it because the property taxes will hurt them. The steering committee of Riley’s own party opposes the amendment, while Democrats can’t decide whether to support the plan or stay on the sidelines, hoping Riley impales himself on the referendum. The latest polls show the amendment losing by 20 points.
One reason for Riley’s struggle to win voters’ support is the plan’s complexity. He has to explain how it will help the state and make the tax burden more equitable (Riley is running 15 minute infomercials on statewide TV to do just that); all his opponents have to do is say it raises taxes. Of course, most provisions of the plan simply bring Alabama's tax code in line with other Southern states: the cigarette tax will rise to 31 cents a pack (Georgia’s is 37 cents); poor families won’t pay income taxes until their income hits $20,000 a year, similar to most states. Currently they pay after $4,600 a year, lowest in the nation. There’s a tradeoff here Alabamans pay the lowest state taxes in the nation, but they also rank near the bottom in quality of education.
If the referendum loses, Riley and the legislature will have three weeks to find another solution to the budget crunch. But Riley will know he took his best shot at helping his state. Such political courage is hard to find these days; in California, they’re trying to kick the governor out of office, partially because he lacks such courage. Win or lose, Riley has shown he’s got bravery to spare