Low property taxes make Alabamians least-taxed in nation
Published 12:00 am Wednesday, April 7, 2010
As many of you are preparing to file your tax returns, do not feel too badly because the U.S. Census Bureau has revealed that we Alabamians pay the least amount in taxes of any other state in America. Yes, we in Alabama continue to have the lowest taxes in the nation. The primary stimulus for our low tax rate stems from our having the lowest property tax in America. In fact, we could double our state property tax and still be the lowest in the nation.
The Census Bureau took tax collection figures from all sources to determine the ranking. Taxes tallied by the bureau included personal and corporate income taxes, sales taxes, fuel taxes and property taxes. Alabama’s average state and local tax collection per person was also the lowest among the 50 states for fiscal years 2005 and 2006. In the latest report two of our neighboring states were fast on our track to be No. 50. Mississippi ranked 49th and Tennessee 48th when it came to paying taxes. Our other two neighbors’ tallies revealed that Georgia ranked 34th and Florida was in the middle of the pack in 26th place.
The five highest tax-paying states were Alaska, New York, Wyoming, Connecticut and New Jersey. Having the highest taxes in the nation is not particularly politically popular. New Jersey, which has been known perennially for high taxes, is a good example. Their Democratic Gov. John Corzine chose to raise the state’s already high property tax and was tossed out of office last year.
Our own two-term Gov. Bob Riley surprisingly offered a massive tax increase measure to Alabama voters his first year in office, which was overwhelmingly rejected. However, Riley is singing a different tune today. He praised the census report placing us 50th and said it was positive “because it really does make a difference when we have people that are retirees moving into the state and when you look at different businesses that are looking at coming into the state. Taxes will be a major part of that decision.”
Naturally, education leaders say it is a negative. State School Superintendent Joe Morton said there is an obvious drawback to low taxes. In Morton’s opinion, “It’s hard to be No.1 in education if you’re No. 50 in spending capability.”
Alabama’s teacher lobbyist Paul Hubbert agrees with Morton. Hubbert’s response to the figures was that “it puts the state at a disadvantage in providing education, health care, roads, police protection and other services.” These are factors, in his opinion, that many companies consider when scouting plant locations.
No matter what side you agree with it is obvious that our current field of gubernatorial aspirants believe that the majority of us like our low tax system. All six of the Republican candidates for governor adamantly oppose any new taxes. Even our two Democratic hopefuls are reluctant to embrace a platform of new or increased taxes. Ron Sparks comes the closest by offering a lottery, which is only a voluntary tax at best. Given this political scenario it appears likely that we will continue to boast of the lowest taxes in the country.
I can tell you from my experience on Goat Hill that unless the governor proposes and works to raise taxes it will not happen. The legislature is not going to offer and raise taxes on its own. In fact, the last time we raised any new revenue for the General Fund or Education Trust Fund was 27 years ago when George Wallace was governor.
Wallace, who was in his fifth term, knew how to get things through the legislature. Some would say he ran the House and had a pretty strong hand in the Senate. He decided he needed more money in the state coffers so he called one special session after the other in 1983, ramrodding what he called “revenue enhancement measures” through the legislative labyrinth.
Believe me, none of the eight candidates for governor this year is a George Wallace. Whichever one is elected will probably be relegated by the legislature to being an irrelevant figurehead in the legislative process. Given the magnitude of the deficit and problems the new governor will inherit I suspect they will be a one-term governor.
See you next week.