Alabama Governor Proposes Tax cuts, Education Expansion

MONTGOMERY, Ala. (AP) - Governor Riley used the state's strong economy to propose a something-for-everyone agenda in his State of the State address Tuesday night to the Alabama Legislature.

Riley said the budget deficit he inherited in his first term is gone. And he's beginning his second term with the economy booming.

He proposed a record 850 million dollar bond issue for school construction projects and a seven percent raise for teachers. That's the same amount the Alabama Education Association has been seeking. Riley did not propose a raise for state workers.

The governor also called for creation of bonuses for teachers with superior performance and a mentoring program for new teachers to help reduce the high attrition rate.

Many of Riley's proposals came out of his "Plan 2010" campaign platform. They included providing a second income tax cut to help middle-class families, eliminating the state income tax on the
first ten thousand dollars of taxable retirement income, and
removing the state sales tax on nonprescription medicine.

Riley also called for tax credits for workers who go back to school for training in high-demand jobs and for employers who hire low-income workers, welfare recipients and disabled veterans.

For small businesses, Riley proposed that employers be allowed to deduct from their state taxes twice the amount they pay for health insurance premiums ... and that their workers be allowed to deduct twice the amount they contribute toward the insurance.

On ethical issues, Riley said his campaign platform and those of the Democratic and Republican legislative caucuses agree on three things: banning the transfer of campaign donations between political action committees, requiring lobbyists to disclose "every penny" they spend on public officials, and eliminating pork projects hidden in the state budgets.

Without giving details, Riley said he plans to send the Legislature a package of bills that he called "the strongest illegal immigration laws in the United States."

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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