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Alabama’s Tax Reform: What Went Wrong and Why

Alabama’s Tax Reform: What Went Wrong and Why. Dr. Jim Seroka, CGS – Auburn University Alabama Municipal Revenue Officers Association December 5, 2003. Tax Reform in Alabama Down to a Resounding Defeat. Two out of Three Alabamians Vote NO on Amendment 1 on September 9, 2003.

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Alabama’s Tax Reform: What Went Wrong and Why

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  1. 2003 CGS - AMROA

  2. Alabama’s Tax Reform:What Went Wrong and Why Dr. Jim Seroka, CGS – Auburn University Alabama Municipal Revenue Officers Association December 5, 2003 2003 CGS - AMROA

  3. Tax Reform in Alabama Down to a Resounding Defeat Two out of Three Alabamians Vote NO on Amendment 1 on September 9, 2003 Governor Riley Repudiated by His Own Party Special Session Makes Dramatic Cuts in the State Budget 2003 CGS - AMROA

  4. Alabamians Who Voted NO Were Strongly Influenced By: 68% - Opposition to the tax increase on cars & trucks 63% - Opposition to 100% market value state property assessment 61% -Governor wanting too much 56% - Low Trust in the Legislature 2003 CGS - AMROA

  5. Alabamians Who Voted YES Were Strongly Influenced By: 66% - Possibility of Teacher Layoff 59% - The Unfairness of the Tax System 59% - The Performance-Based College Scholarship Fund 52% - Potential Closure of Senior Citizen Centers 2003 CGS - AMROA

  6. Alabamians Who Voted YES Strongly Supported: 70% - Increase in the Child Exemption on State Income Tax 65% - Increase in Cigarette Tax 61% - Large Timber Companies Paying More in Property Tax 2003 CGS - AMROA

  7. Who Influenced the Vote for Supporters of Amendment 1? • 48% Alabama Education Association • 36% Governor Riley • 23% AARP • 24% Family 2003 CGS - AMROA

  8. Who Influenced the Vote for Opponents of Amendment 1? • 22% Family • Not ALFA • Not Alabama Republican Party 2003 CGS - AMROA

  9. The Vote Was Not Heavily Influenced by: • TV Ads • Mass Mailings • Church Groups • Political Parties • Social Groups 2003 CGS - AMROA

  10. Who Opposed Amendment 1? • 75% High School/ GED Education • 72% Household Income under $20,000 • 73% Voters identified as Conservative • 71% Voters living in rural areas 2003 CGS - AMROA

  11. Who Supported Amendment 1? • 58% Graduate or Professional Education • 55% African-American voters • 51% Voters with 10 – 20 Years in Alabama • 50% Labor Union Members 2003 CGS - AMROA

  12. For a Tax Initiative to Pass, 2 of 3 Undecided Voters Must Support • 17%are likely to support tax increases • 34%will probably never support tax increases • 49% could be persuaded. 2003 CGS - AMROA

  13. On September 9th, Only 1 of 3 Undecided Voters Supported Amendment 1 2003 CGS - AMROA

  14. Tax Reform Must Be Tied to Education to Succeed • 38% listed improved education as the most critical issue that they supported • 11% of all voters were critical that the tax package was not tied solely to education 2003 CGS - AMROA

  15. Tax Reform Must Address Confidence in Government. • 31% did not see a need for broad tax change • 13% of all voters did not trust government • 10% did not understand the package 2003 CGS - AMROA

  16. What Should We Cut? – The Voters Speak First Choice • 27% Eliminate Waste. • 14% Cut government salaries. • 12%Throw out the bums. • 4% Cut social welfare programs. 2003 CGS - AMROA

  17. Where Do We Find the Money? – The Voters Speak First Choice • 25% Lottery • 11% Alcohol and Tobacco • 9% Property Tax • 6% Sales Tax 2003 CGS - AMROA

  18. There is Strong Opposition To: • 68% Laying Off Teachers • 54% Cutting Aid to Seniors/Children • 50% Increasing State Sales Tax 2003 CGS - AMROA

  19. The Public Strongly Supports: • 73% - Increase in the Tax on Alcohol • 64% - Increase in the Tax on Cigarettes and Tobacco • 63% - Introduce a Lottery 2003 CGS - AMROA

  20. The Public is Sharply Divided About: • Cutting State Agency Budgets. • Ending State Support to the Arts. • Ending Support for Private Schools and Universities 2003 CGS - AMROA

  21. Lesson Learned 1 • Alabama voters will not support tax increases if they are not linked to specific programs that people support. 2003 CGS - AMROA

  22. Lesson Learned 2 • Alabama voters may support limited tax increases if linked to education. 2003 CGS - AMROA

  23. Lesson Learned 3 • Alabama voters will not support tax increases without restoration of faith and confidence in Alabama government. 2003 CGS - AMROA

  24. Thank You Center for Governmental Services 2236 Haley Center Auburn University AL 36849-5225 Tel. (334)844-4781 Fax. (334)844-1919 www.auburn.edu/cgs 2003 CGS - AMROA

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