Raising Alabama: The need for more revenue
Alabama tax collections rank 50th in the nation
MONTGOMERY, AL (WSFA) - When it comes to funding state government, Alabama is the worst.
According to data from the U.S. Census Bureau, the state ranks 50th nationwide in terms of tax collection. No other state collects less revenue. It’s true that most people think having low taxes is a good thing. But having the absolute lowest is not a good sign, according to economic investors.
Every year Alabama state lawmakers struggle to find the revenue needed to fund the state’s agencies. And one of the state’s leading investors is tired of it. He’s calling for a much-needed revenue boost.
“You have to have funds to meet minimum standards,” explained the RSA’s David Bronner.
Under Bronner’s leadership, the Retirement Systems of Alabama has helped bring out about some of the state’s most celebrated economic development projects, including Mercedes and Airbus. But Bronner says those types of companies could lose interest in Alabama if the state can no longer pay for even basic programs.
He uses a college football analogy:
“What if you had the lowest paid coaches with the worst facilities, do you think you’d be a national winner?” he asked. “I don’t think so.”
When it comes to funding state government, Alabama is no “national winner.”
An under-funded corrections department led to a troublesome federal lawsuit. An under-funded mental health department now means needy patients end up in jails instead of hospitals. And an under-funded public safety department has reduced the number of state troopers on the roads to a record low.
“You have more police in the city of Montgomery than we have state troopers now,” Bronner said. “That’s just unheard of.”
Bronner says just a slight tax boost -- collecting what Mississippi collects, for in stance -- could solve all these problems and more.
According to the U-S Census, each Alabamian pays about $3,000 in combined taxes every year. That’s lower than any other state. Tennessee, for example, collects about $50 more per person. Mississippi collects almost $400 more per person.
When added up, those figures represent a big financial advantage for other states. Our neighboring states of Florida and Georgia each collect $1.5 billion more in taxes than Alabama every year. Mississippi collects $2.5 billion more.
“There are definitely some issues that have to be addressed,” agreed State Representative Steve Clouse.
Clouse is chairman of the Ways and Means General Fund Budget Committee. The Ozark Republican said this year could bring new revenue generating proposals since it marks the beginning of a new 4-year term.
“In the first year of a quadrennium, that’s when you really have to put forth some efforts that might not be 100% popular with the public,” Clouse said.
But according to Clouse, only a gasoline tax hike has been discussed. The money raised would pay for infrastructure improvements like road and bridge construction. He says no other tax increases are on the table.
So what’s PLAN B? Bronner points to state-sanctioned gambling. Without new taxes, he says it’s the only answer.
Bronner has been advocating for a state lottery for decades. He says Alabama is losing out to other states.
“Georgia, Florida, Tennessee. People are lined up for the lotteries over there in cars with Alabama tags on them,” Bronner said.
Bronner also advocates for legalized sports betting in Alabama, now that the U.S. Supreme Court has paved the way.
A number of lottery bills have made their way through the legislature in the past, but only one was approved. And in that case, the public voted it down. It’s unclear whether any gambling bills will be introduced this year.
The 2019 legislative session begins March 5th.
For more information about Alabma’s tax structure and how it compares to other states, check out this data from the non-partisan, non-profit Public Affairs Research Council of Alabama.
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