Riley's Tax Package Gets Favorable Marks From University Of Alabama Economist

A University of Alabama economist is criticizing a study predicting negative economic consequences from Governor Riley's tax plan. Carl Ferguson, director of the Center for Business and Economic Research, says Alabama should benefit from spending more on education and state services. Ferguson spoke out today about a study by Beacon Hill Institute at Suffolk University in Boston.

The study predicted that Alabama will have 24-thousand fewer jobs next year than it would have without the tax hike and that disposable income will go down two-point-three billion dollars. Ferguson says the study is based on faulty job projection figures. But the executive director of the Beacon Hill Institute, David Tuerck, says the numbers came from the Alabama Department of Industrial Relations.

Ferguson says the study falsely assumes that most of the new tax dollars will be spent on health and welfare programs. Ferguson expects most of the new money to be spent on education, which he says will help grow the state's economy. Tuerck says tax hikes in other states have benefited Medicaid and other non-education programs. The Beacon Hill study was commissioned by the Alabama Policy Institute. It was based on Riley's plan as it was introduced in the Legislature, and it has been widely used by critics of the plan. Ferguson's news conference Thursday was organized by proponents of Riley's plan.