Conceding defeat around 8:30 last night, Governor Bob Riley remained optimistic about the future of Alabama. And with a margin of defeat of his proposed tax package of more than 2 to 1, Riley had little to be optimistic over.

With 99 percent of the precincts reported as of 10:40 p.m., a total of 855,793 in opposition to the 414,396 for, or a 67 to 33 percent total, the referendum is considered a landslide victory for the opposition.

But there were counties where the tax package actually passed, according to numbers released by the Associated Press. Counties in the "Black Belt" were the leading counties in support of the package, with Bullock, Hale, Greene and Dallas Counties all voting in favor of the amendment. Surprisingly, Lee County, traditionally one of the most conservative counties in Alabama, also passed the amendment. Other conservative strongholds, however soundly defeated the package. Baldwin, Calhoun and Mobile Counties all voted in opposition to the package - as did Covington,

Crenshaw, Pike and Escambia Counties.

Roger McConnell of the Tax Accountability Coalition, the leading group opposing the tax increase, said he appreciated the battle, and that this was a victory for the people.

"This has been a fun race," McConnell said. "It has engaged people all over the state. We wish the governor well, and this vote showed that the people in Alabama are fed up with the people in Montgomery wasting their money."

Rosemary Elebash, state director of the National Federation of Independent Business said the defeat of the tax plan was a victory for small businesses.

"History was made today in Alabama," Elebash said. "Voters stood up and spoke with a unified voice in telling Montgomery politicians that they would not stand for measures that stifle growth and threaten the state's economy. In a resounding message, they said 'no' to a tax plan that would have imposed an unnecessary and unfair burden on thousands of small-business owners and families across the state."

Elebash went on to say that now is the time for all parties to pull together for Alabama.

"We look forward to a constructive dialogue with the Riley Administration to focus on how we can advance the economic well-being of Alabama and its small-business owners."

Governor Riley, in his concession speech that sounded more like a victory speech than a concessionary one, thanked all of the individuals involved in the campaign for all their hard work, and said the stumping trail has been a learning experience for him.

"I have had the greatest opportunity in the last few months, the opportunity to meet thousands of Alabamians," he said. "The people of Alabama have said they want an honest government, and we're going to give that to them. The people have said they want a level of accountability Š a government we can trust Š and we're going to give them that.

"The people have said we want a smaller government, and that begins tomorrow (today)."

Riley went on to say that just because the tax package was defeated, that doesn't mean reform isn't coming to Alabama - and it could be reform that some people won't like.

"We are going to have to reduce government," he said. "We're going to have to be judicious in the cuts we make," he said referring to the dependency so many people in the state have on government programs.

"Sixty percent of the people in this state said they want change, and we're going to give them that," he continued.

But, Riley didn't call the defeat a loss. In referring to the high percentage of voters that turned out for the referendum, Riley called it a victory.

"In a democracy, that is where our power and strength comes from," he said referring to the ability to cast a vote on an issue. "Alabama's best days are yet to come."

When Governor Riley kept referring to "we're going to give them that starting tomorrow," he meant calling the Legislature back into session in order to pass a balanced budget and begin making cuts.

Representative Seth Hammett, D-Andalusia, and Speaker of the House issued a statement Tuesday night regarding just that issue.

"Governor Riley says he will call a special session of the Legislature on Monday, September 15 for the purpose of developing state budgets for the new fiscal year that begins on October 1," Hammett said. "Without new revenue, we will begin the process of program reductions in order to have balanced budgets.

"We know that budgeting for the 2004 fiscal year will be difficult, but we must remember that balancing the budgets for the 2005 fiscal year will be an even greater challenge because $235 million in one-time federal funds will not be available," Hammett concluded.

The cuts Hammett talked about are expected to include thousands of non-violent criminals being released from prison, thousands of students enrolled in pre-kindergarten programs turned away, teaching positions being slashed, funding for the Children's Hospital of Alabama and sickle cell research being cut or eliminated, Alabama State Trooper numbers being reduced, funding for domestic violence shelters reduced or eliminated, trial courts being delayed, and much more.

Some have questioned if that will really happen, and it's not known what the governor has in store for the budgets until later in the day today, as he said during his speech last night.

In Covington County, organizations like the Opportunity House, a domestic violence shelter in Opp stands to lose as much as $42,000, said Opportunity House Executive Director Deborah Hooks (see related story, page 14).