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Riley's Speech

By: Associated Press
By: Associated Press

The governor's tax plan is expected to go before the voters as early as September 9th 2003. Go to our Message Board and tell us what issues you would like WTVY News 4 to explore.

Tax plan could reduce local property tax revenues, Riley aides
admit August 13th

Figures from the Alabama Revenue Department show some Alabama cities and school districts would have to lower their tax rates if voters pass Governor Bob Riley's tax proposals.

Riley's plan, when fully phased starting in 2008, would raise state property taxes by $401 million annually and local property taxes by another $66 million.

That increase would force some cities and school districts to lower their tax collections so their total state and local property taxes would not exceed caps voters added to the state constitution in 1978.

Under the cap, the tax limit on a one (m) million dollar store is $15,000 a year.

Riley aides said yesterday that if voters pass the plan, Riley will push for another amendment to the state constitution that could fix the problem. Any amendment has to be approved by the Legislature and by voters.

Mike Kilgore, executive director of the Alabama Farmers Federation, which opposes Riley's plan, said the mistake shows Riley wasn't careful enough in preparing the plan.

Eight former Baptist presidents endorse Riley's tax plan August 13th

Eight former presidents of the state's largest religious denomination -- the Alabama Baptist State Convention -- are encouraging voters to approve Governor Bob Riley's tax and accountability plan on September 9th.

The eight former presidents released a statement today.

It says the $1.2 billion plan will make Alabama's tax system more equitable. It says the plan will improve and enhance public services to all citizens, especially children, the elderly and the less fortunate.

Signing the statement were the Reverend Dan Ireland of Birmingham, the Reverend Mike McLemore of Birmingham, the Reverend Walter Nunn of Huntsville, Steve Tondera of Huntsville, the Reverend Harrell Cushing of Montgomery, the Reverend Jerry Gunnells of Mobile, the Reverend Fred Lackey of Jasper, and the Reverend Harper Shannon of Montgomery.

The eight are among 12 living past presidents of the 1.1 million-member Alabama Baptist State Convention.

Shannon says the eight former presidents are speaking as individuals, but their support is in line with the Baptist State Convention adopting a resolution in 2000 supporting tax reform.

Montgomery leaders go to churchs, barber shops to sell tax planAugust 11th

Several black political leaders in Montgomery County are taking the campaign for Governor Riley's tax plan to churches, civic organizations and beauty and barber shops. State Representative John Knight of Montgomery says many low-income families don't realize they would pay less state taxes under Riley's plan. He says one-on-one campaigning will be used to educate them about the details. State Representative Thad McClammy says the challenge for proponents is to make Riley's complex plan easy to understand. He says once his constituents understand it, they want to support it in the referendum September ninth.

Joining the campaign are state Senator Quinton Ross, some members of the Montgomery City Council and County Commission, the Montgomery Improvement Association, and others.

Ross -- a Montgomery educator -- says he believes Riley's plan will be helped by children going back to school and by parents seeing the financial problems of public schools.

The group's announcement this morning was met by three opponents. Don Abrams of Wetumpka carried a sign urging a no vote no September 9th. Abrams said - quote - "I don't want to any more taxes."

A Plus Foundation endorses Riley's tax plan August 8th

The A Plus Education Foundation has thrown its support behind Governor Bob Riley's tax and accountability plan. Chairman Bill Smith yesterday called it -- quote -- "a solid first step in building a bright future for Alabama's schoolchildren."

Smith and A Plus President Caroline Novak singled out the accountability measures, such as offering a five-thousand dollar bonus to principals and central office administrators who give up the job protection of tenure and switch to performance-based contracts. All new administrators would be hired on performance contracts.

The plan also calls for raising administrators' salaries to the Southeastern regional average by 2005.

Smith and Novak praised Riley's plan would provide more money for successful education programs, such as the Alabama Reading Initiative.

Novak is also a leader of the Alabama Partnership for Progress, a group running ads in support of Riley's plan.

Riley tells principals to go out and sell tax plan July 31st

(Prattville-AP) -- Governor Bob Riley told public school principals and administrators meeting yesterday at Prattville High School that he expects them to go out and campaign for his $1.2 billion tax and accountability plan.

He said if the principals wanted their schools "to be the best," they needed to sell his program to voters.

Some of the principals wore buttons saying, "I'm voting yes, ask me why."

A video cameraman from the Alabama Farmers Federation, one of the groups opposing Riley's plan, was at the meeting to document that Riley is holding rallies for his plan on public property.

Riley said there was nothing wrong with holding Wednesday's meeting at a public high school.

Autauga County Superintendent Larry Butler told the meeting he supports Riley's plan because he's tired of saying "no" to principals.

Voters will go to the polls on September 9th to decide on Riley's plan.

Former Majority Leader Dick Armey turns up Riley criticism July 31st

(Montgomery-AP) -- Former House Majority Leader Dick Armey says Bob Riley was never an advocate of higher taxes when they served together in Congress. And he's disappointed that his old friend is now proposing the biggest tax increase in Alabama history.

Armey is now co-chairman of Citizens for a Sound Economy, and he's urging Alabamians to vote against Riley's tax plan on September 9th.

Riley says he's not worried about Armey's opposition. He says Armey gets paid for saying what he's saying.

Armey held a teleconference with Alabama reporters yesterday. He
said he's speaking out on behalf of the seven thousand Alabama
members of Citizens for a Sound Economy. He says many of them
supported Riley in last year's election for governor and they feel betrayed.

Utility customers could see decrease in bills under tax plan July 30th

(Birmingham-AP) -- Customers of Alabama Power and Alabama Gas could see a slight drop in their bills if Governor Riley's $1.2 billion tax plan is approved by voters.

The Birmingham News reports customer's rates could drop, even though the state's two largest utilities would see an increase in their state income taxes.

The taxes and costs the utilities pass on to customers as part of their bills would fall from 6.2 percent to 5.75 percent. That means a customer of either utility would pay $5.75 on a $100 utility bill, down from $6.20.

The utilities themselves would see their state income taxes rise to 6 percent from 4.2 percent.

Both utilities support Riley's tax and accountability plan, which seeks to overcome budget shortfalls and improve education and other services.

Tax threshold set in 1982, not 1933, but still draconian to poor July 30th

Supporters of Gov. Bob Riley's $1.2 billion tax plan have said the threshold at which the poor must start paying income taxes is too low.

They say it has not been changed since 1933. Riley's plan to raise the threshold is a key moral imperative to back his package.

But it turns out that the Partnership for Progress has been citing the wrong date. State fiscal officials say the threshold hasn't been changed since 1982. The group and Riley have said it hasn't changed since 1933.

But the mistake doesn't change the group's assertion that the tax has had a draconian impact on the poor for decades.

Riley's plan would increase the threshold when Alabamians must begin paying income taxes. For a family of four, it would go from the current threshold of a nation-low $4600 to about $17,000.

Fiscal analysts say the threshold started at $3600 in 1935. It rose $275 in 1951 and went to $4,000 in 1965.

The Partnership for Progress was wrong in saying the figure had gone unchanged since 1933. But it actually has been understating the problem.

Factoring in inflation, a family of four with an annual income of $3600 in 1935 would be over ten times as wealthy as a family making $4600 in 2002.

A spokeswoman with Partnership for Progress said the group got its information from the Department of Revenue and didn't mean to mislead anyone.

Riley pledges to educate low-income voters on tax plan July 30th

Governor Riley is trying to spread his message about his tax and accountability plan to lower-income Alabama residents. They've said in recent polls they will vote against the package -- even though Riley says most lower- and middle-income people would receive a tax cut.

A survey of 500 registered voters last week by The Birmingham News and three television stations showed 49 percent saying they would vote against Riley's plan and 39 percent saying they would vote for it. The stiffest opposition, according to the poll, was from low-income residents.

Riley's plan raises the income level where a family of four begins paying income taxes from $4600 to $17,000 and will keep rising in future years. Riley says a family making $40,000 a year would receive a tax break.

Opponents say other taxes in the plan would create a greater tax burden for lower-income taxpayers.

Poll: Riley faces uphill battle on tax plan approval. July 28th

Alabama voters in a statewide poll lean toward rejecting Governor Riley's tax and accountability package, but the survey released yesterday (Sunday) shows the September 9th referendum remains too close to call.

The survey of 500 registered voters last week showed 49 percent
would vote against Riley's plan and 39 percent would vote for it, with 12 percent undecided. It had four-point-four percentage point margin of error.

The stiffest opposition comes from low-income people who actually would stand to benefit from income tax breaks in the plan.

The poll was conducted Monday through Thursday for The Birmingham News and television stations FOX-SIX in Birmingham, WHNT in Huntsville and WSFA in Montgomery.

While the survey shows anti-tax groups have the edge, the pollster, UAB's Larry Powell, believes Riley can still win by reaching low-income voters and selling the popular parts of the plan, like a college scholarship program.

Among voters with household incomes under $30,000, 58 percent were against the plan and 27 percent were for it.

Alfa says its taxes will rise $9 million under Riley's plan. July 25th

(Montgomery-AP) -- Officials at Alfa Insurance estimate Governor Riley's tax plan will raise their taxes by $9 million -- and will result in policyholders paying more.

Company officials say more than half of the increase will come from a proposed new tax on repair and installation services.

Alfa insurance and its sister organization, the Alabama Farmers Federation, are opposing Riley's plan in the statewide referendum September 9th.

A spokeswoman for an organization supporting Riley's plan says
neighboring states have a service tax without skyrocketing premiums.

Alfa has 500,000 policyholders in Alabama. Company officials' prediction of a $9 million increase would equate to $18 annually per policyholder.

Board member: Two-year meeting to cost thousands. July 25th

(Birmingham-AP) -- Governor Riley is set to explain his $1.2 billion tax plan to employees of Alabama's two-year colleges at an unprecedented meeting today (Friday).

But two state school board members say the gathering could wind up costing taxpayers thousands of dollars.

Stephanie Bell, a board member who says the meeting is a wasteful and improper use of tax money, says the state will spend at least $300,000 for the salaries of some 3,000 workers who are expected to attend.

Board member Betty Peters also opposes the meeting.

Roy Johnson, chancellor of the state's 26 community colleges, says the meeting is proper. He says private donors will provide box lunches for those attending the meeting, and that college presidents were told to use money from foundations or donations to cover the cost of busing employees to Wallace State Community College in Cullman County.

Riley, opponents spar over tax plan campaign. July 24th

(Mobile-AP) -- Governor Bob Riley acknowledged the closeness of his campaign for approval of his $1.2 billion dollar tax and accountability package on the September 9th ballot.

In Mobile Wednesday, he also accused opponents of spreading false reports to defeat it. Without naming anyone, Riley had two words for those reports: "Nuts, ridiculous."

One anti-tax group claims property taxes will soar under the Riley proposal. But Riley said that's wrong. In fact, he said, "A lot of people will pay less money next year."

Another incorrect claim -- cited by Riley -- is that funds available if the referendum passes would not be set aside for college scholarships as promised. Riley said once the plan is approved, it would be "crazy" for the Alabama Legislature to stand up and say they would not support the scholarships.

"Once you set that money up," says Riley, "you develop a constituency for it."

Former state Republican Party Chairman Roger McConnell of Mobile has organized opposition to the Riley plan under the Tax Accountability Coalition banner. Coalition spokesman Bob Gambacurta of Montgomery says the group's radio advertising campaign refers to property taxes going up --quote-- "as much as 400 percent," and says "not one dime is dedicated to schools."

Gambacurta says the coalition hasn't said anything in its advertising to date about Riley's college scholarship program. And, he says, "We stand behind everything in our radio commercials."

Riley spoke to 543 business leaders in Southwest Alabama at a Mobile Area Chamber of Commerce luncheon and then delivered an afternoon address to a separate group at the convention center. He arrived in the port city from speech this Wednesday at a convention in Perdido Key in coastal Baldwin County. Also, Riley picked up additional support from three more business groups -- Alabama Association of REALTORS, Alabama Homebuilders Association and Associated Builders and Contractors of Alabama.

www.abetteralabama.org

One year after endorsing Riley, Bishop leads tax plan opponents. July 23rd

(Montgomery-AP) -- Former state Agriculture Commissioner Charles
Bishop's one-year alliance with Governor Riley is over. Bishop held his first news conference yesterday as co-chairman of the Tax Accountability Coalition, the group opposing Riley's tax and accountability plan.

Bishop and coalition founder Roger McConnell called the news conference to criticize a meeting planned Friday in Hanceville for about three thousand community college employees to hear the governor. They said the meeting ought to be moved to a night or weekend so the employees wouldn't be attending on state time to hear a sales pitch for the governor's tax plan.

Two-year college Chancellor Roy Johnson says he won't change it. He says it's a chance for employees to hear him, the governor and state board of education members discuss the state's budget situation.

Bishop accused the governor of being deceptive when he says it will help working people. Bishop says working people will pay more because of the higher sales taxes on cars and the new tax on repairs.

A spokesman for the governor says Bishop needs to look at the impact of the whole package, including raising the income tax deduction for children from $300 to $2200.

Governor seeks church support for tax plan. July 23rd

(Birmingham-AP) -- Speaking at Birmingham's Sixteenth Street Baptist Church, Governor Bob Riley asked religious congregations yesterday to get involved in supporting his $1.2 billion tax plan.

Riley's comments came at a gathering of about 150 ministers and
church leaders organized by the Alabama Partnership for Progress,
which is promoting the plan.

Reverend Dennis Carlson, pastor of Dexter Avenue United Methodist Church in Montgomery, said he already has preached on the need for tax reform and intends to do so again.

But the pastor of Sixteenth Street church, Reverend Arthur Price, is more hesitant to talk politics from the pulpit. Price said the church would still keep members informed of the facts, which he said favor passage of the tax plan.

A leader in the reform movement, Criminal Appeals Judge Sue Bell Cobb said it is difficult for many preachers to discuss tax reform from the pulpit.

She said Alabama's churches were widely credited with killing a
state lottery proposal, and believes religious groups could be the
deciding factor in the tax vote.

Alabama Partnership grows with new members. July 23rd

(Montgomery-AP) -- The coalition pushing Governor Riley's tax and accountability plan is growing.

The Alabama Partnership for Progress announced today that it has
added 10 members: the Children's Trust Foundation, Region 2020, the
Alabama Heart Association, the Alabama Soft Drink Association, the
Alabama Residential Childcare Association, the YWCA of Central Alabama, One Montgomery, the Alabama Historic Ironworks
Association, the Alabama Poverty Project, and Citizens for
Responsible Government.

Spokeswoman Marty Sullivan says more than 55 organizations have
joined the partnership and more are expected.

Riley pushes tax plan in talk to educators. July 13th

(Gulf Shores-AP) -- Governor Bob Riley today asked members of Alabama school boards to learn about his tax plan and then sell as many others on the package as possible.

Riley, speaking to about 350 members of the Alabama Association of School Boards in Gulf Shores, asked them to study his $1.2 billion tax and government accountability package and then go out and sell it to others.

Riley asked the educators, quote, "to convince them how important it is, to explain to them how important it is."

The governor spoke during opening ceremonies of the group's annual conference at Gulf State Park Resort.

The plan, which is up for a referendum on September 9th, would raise taxes on higher-income earners and homeowners and ease the tax burden on lower-income residents.

Riley, who has opposed tax hikes in the past as a Congressman, has said the plan is a last resort for a budget deficit he said will total $675 million at the beginning of the fiscal year October 1st.

Opponents say the plan comes at a bad time because the economy is bad. But Riley says the plan is crucial to lifting the state from the bottom of national education lists.

Pryor, Worley endorse Riley's tax plan. July 11th

(Montgomery-AP) -- Secretary of State Nancy Worley has joined Attorney General Bill Pryor in endorsing Governor Bob Riley's $1.2 billion tax package. So far they are the highest-ranking state officials to stand with the Republican governor.

Worley, a Democrat, said yesterday Riley was courageous to propose the package, and as a former teacher, she plans to vote for it because the new revenue would increase funding to public schools.

Pryor said yesterday the new tax revenue is crucial to underfunded and understaffed criminal justice programs.

Democratic Lt. Governor Lucy Baxley said last month she won't take part in the campaign because she had no role in developing the package.

Republican State Auditor Beth Chapman announced Monday that she
won't endorse the governor's package.

Democratic Commissioner of Agriculture Ron Sparks is studying the plan's impact on farmers and has not taken a position.

Republican State Treasurer Kay Ivey said she will try to help voters understand the governor's proposals, but not attempt to sway their opinion.

David Azbell, Riley's press secretary, said the governor appreciates the leadership shown by Pryor and Worley.

Riley's tax plan attracts praise, criticism. July 9th

(Opelika-AP) -- Governor Bob Riley's $1.2 billion tax and accountability plan picked up its first endorsement from a county Republican committee and came under attack in a radio ad from a Republican-led organization.

The Lee County Republican Executive Committee voted yesterday to endorse Riley's plan, making it the first county committee in the state to take such an action, according to Jay Jones, county GOP chairman and sheriff of Lee County.

Jones said today the committee believes it's time for Republicans to begin standing in support of our governor.

Meanwhile, the Tax Accountability Coalition, founded by former state Republican Party Chairman Roger McConnell, began running a radio ad today encouraging voters to stop Riley's plan in a statewide referendum September 9th.

The radio ad tells voters that if Riley's plan is approved, they will no longer be able to deduct their federal income taxes on their state income tax return.

Bob Gambacurta, a spokesman for the coalition, said the radio ad is running statewide. He said more anti-tax ads will air in the coming weeks.

State Democratic chairman supports Riley's tax plan. July 8th

(Birmingham-AP) -- Alabama Democratic Party Chairman Redding Pitt is supporting Republican Governor Bob Riley's $1.2 billion tax and accountability plan. He's urging other Democrats to vote for it September 9th.

Pitt's comments at a forum yesterday were in contrast to Alabama Republican Party Chairman Marty Connors, who said he does not plan
to vote for the plan and that a majority of GOP county chairmen and state Republican Executive Committee members are opposed to it.

Connors said a big part of their objection is that Riley's plan involves too much, too soon.

Riley's plan would phase in state and local tax increases over four years. The plan would fill a $675 million budget deficit and provide funding for new programs, including college scholarships.

Diverse group formed to support Riley's tax plan. July 7th

(Montgomery-AP) -- Groups that sometimes fight at the Alabama Legislature joined forces today to campaign for Governor Riley's tax and government accountability package.

The new Alabama Partnership for Progress consists of 45 groups. They include the Business Council of Alabama, the Alabama Education
Association, the Alabama Arise lobbying group for the state's poor, the Alabama Watch consumer group, the child advocacy group Voices for Alabama's Children, and the League of Women Voters of Alabama.

The partnership's press secretary, Marty Sullivan, says the groups have risen above divisiveness and are working in unison.

The partnership has registered with the state as a political action committee and plans to do everything from grassroots campaigning to paid advertising before the September 9th referendum on Riley's plan.

One of the people doing that grassroots campaigning is UAB senior Michael Staley. He says the biggest challenge is to teach people the details of Riley's plan. He says people support it once they understand the details.

Sullivan says the biggest misconception among voters is that everyone will pay higher taxes under Riley's plan. She says many Alabamians won't pay more. She says another misconception is that Riley's plan has no accountability. She says it has many accountability provisions, including criminal sanctions for "pass-through pork."

Riley's tax package picks up support in Montgomery, Mobile &
Huntsville. June 27th

Governor Bob Riley's $1.2 billion tax and government accountability package has picked up support in Montgomery, Mobile and Huntsville.

The Montgomery Area Chamber of Commerce endorsed the package
yesterday. In a statement, the board said the package represents "a comprehensive reform initiative designed to move our state forward."

Also Thursday, Mobile Mayor Mike Dow threw his support behind the package. Dow called Riley "courageous" for proposing the package.

The Chamber of Commerce of Huntsville/Madison County also announced today it will encourage voters to back Riley's effort to transform the state's tax structure. Chamber officials said a systematic change is necessary to address the state's fiscal crisis.

Alabama voters will go to the polls September 9th to decide whether to enact the taxes and the new programs they would fund, such as college scholarships.

Opponents of Riley's tax plan to organize Saturday. June 25th

Former state Republican Party Chairman Roger McConnell of Mobile is planning a meeting Saturday in Montgomery to organize grass-roots opposition to GOP Governor Bob Riley's tax plan.

McConnell said he's paying the bill to rent a hotel ballroom for the 1 PM meeting because Riley's multi-billion dollar tax plan "is diametrically opposed" to the party's platform of less taxes and less government.

He said speakers will include John Giles, state director of the Christian Coalition.

The meeting will be held at the Embassy Suites one week after Riley spoke to several hundred supporters of the plan.

Alabama voters will decide the fate of the tax and accountability package in a September Ninth referendum.

Governor holds weekend forum on tax, accountability package. June 23rd

Governor Riley met with supporters of his tax plan for a Montgomery rally Saturday. About 500 people from across the state attended the "Laying the Foundation of Greatness" leadership conference at the Embassy Suites hotel. Riley and his top aides spoke and answered questions about the tax plan.

Riley told the group, "It's no longer up to the governor. It's no longer up to the Legislature. It's up to you." Riley urged the crowd to call radio talk shows, write letters to newspapers, and talk to church groups and neighbors about the benefits of improved funding for state services.

Policy director Sid McAnnally of the group, Campaign for Alabama, provided an overview of Riley's plan, which would change income, property, business and other tax structures to raise $1.2 billion to better fund schools, prisons, senior programs and other services. It also includes accountability measures for state government designed to increase public confidence that tax money isn't being squandered.

Riley recruiting help from local leaders on tax package. June 19th

Governor Bob Riley is recruiting local elected officials and community leaders to help him sell his one-billion dollar-plus tax and accountability package to Alabama voters.

Speaking to an invited audience yesterday at the Mobile Museum of Art, Riley said he needs people to lobby for his package within their communities.

Similar presentations are being held around the state, including one planned Saturday at the Embassy Suites Hotel in Montgomery.

Pepper Bryars, Riley's deputy press secretary, said local elected officials and opinion leaders are being invited to the meetings because they are the ones that people will look to for advice on how to vote on Riley's package on September Ninth.

Critics of the tax plan, such as Citizens for a Sound Economy, say Riley needs to do more cost cutting before pushing the biggest tax increase in state history.

State's biggest banker opposes Republican governor's tax plan. June 16th

(Montgomery-AP) -- Alabama's biggest banker and Republican Bob Riley were on the same side in last year's race for governor. But they'll be on opposite sides September Ninth, when Alabama voters decide whether to approve Riley's record-setting tax package.

Wallace Malone, chairman and CEO of SouthTrust Bank, said Riley's tax plan will take an excessive amount of money out of Alabamians' pockets during a recession.

Riley paints the opposite picture. He says the state's economic climate will be affected more by the federal tax cut and Bush administration's economic policies than anything that happens in Alabama.

Malone, based in Birmingham, heads a bank that operates from Virginia to Texas and has more than $51 billion in assets, more than any other Alabama-based bank.

The governor's package would increase the taxes paid by banks. The administration pegs the increase at $12 million, but the Alabama Bankers Association says it's $15 to $20 million and it's disproportionate to the increase on other businesses.

Because of that Malone plans to be active in the campaign against Riley's plan.

Child advocacy group supports tax initiative. June 16th

(Birmingham-AP) -- Voices for Alabama's Children, a state child advocacy group, will support Governor Bob Riley's proposed multi billion dollar tax increases. The package will be decided by state voters in September.

The group says the recently released "Kid's Count" data indicates Alabama ranks 41st in the nation in the number of its children living below the federal poverty line.

The organization is using that data as a springboard to publicly call on support for the tax reform package. The non-profit group's talking points refers to the proposals as a good start toward a fairer tax system, but said additional funding will be needed to solve the state's problem. Voices also urges ministers across the state to -- quote -- "preach the need for comprehensive tax reform."

Riley staffers once worked for group now opposed to his tax plan. June 11th

(Huntsville-AP) -- Two members of Governor Bob Riley's staff used to work for a Washington-based advocacy group that has launched a campaign against the governor's plan to raise taxes by $1.3 billion.

Riley's chief of staff, Toby Roth, and his appointments secretary, Twinkle Andress, are former employees of Citizens for a Sound Economy, which last week announced a campaign against Riley's tax package.

The group, which is co-chaired nationally by former House Majority Leader Dick Armey of Texas and claims 7,000 Alabama members, did not say how it planned to fight the package.

Roth said his former employer doesn't have all the facts about the need for the tax and accountability package. He said he still believes in the group's philosophy -- limited taxes and government regulation.

Highlights of tax legislation. June 9th

(Montgomery-AP) -- Here are highlights of three big tax bills approved by the Alabama Legislature:

PROPERTY TAX:

  • Raise $391 million annually for state and $71 million for cities and counties when fully implemented in four years.
  • Lower the state property tax rate from six-point-five mills to
    three-point-five mills.
  • End the state's practice of assessing residential property at ten percent of its value, commercial property at 20 percent and utility property at 30 percent. Instead, assess property at its market value for state tax purposes. For county and city tax purposes, residential property would still be assessed at ten percent and commercial and utility property at 22 percent.
  • Raise the current use value on farm and timber property, with prime farm property going from $532 to $650 per acre and prime timber property from $585 to $715 per acre.
  • Limit current use valuation to 2,000 acres by one farm or timber owner. Acreage above that would be taxed at its market value. There is no limit now on current use valuation.
  • Give a 200-acre tax exemption for farms where the owner lives
    on the farm. There is no tax exemption now.

    INCOME TAX:

  • Raise $421 million for the state.
  • Increase the threshold at which Alabamians start paying income
    tax by going to 100 percent of the federal values for standard
    deductions and 70 percent of the federal values for personal and
    dependent exemptions. The state values would rise when the federal
    values go up.
  • Eliminate deduction of federal income tax paid by individual and corporations, as well as Medicare and Social Security paid by individuals.
  • Allow itemized deductions for only medical and dental expenses, charitable donations, home mortgage interest, and adoption expenses.
  • Raise tax rate from five percent to six percent for individuals with net income over $75,000 or couples over $150,000.
  • Lower the tax rate for corporations from six-point-five percent to six percent.
  • Keep retirement benefits tax exempt if they come from a defined benefit plan, such as state employees' and teachers' retirement plan and the plans of most major corporations.
  • Add new exemption, starting in 2006, for up to $40,000 from non-defined retirement benefit programs, such as IRAs and 401Ks.

    SALES TAX:

  • Raise $139 million annually for the state and $64 million for city and county governments.
  • Increase the state sales tax on cars and trucks from two percent to two-point-five percent.
  • Double the state sales tax on leased vehicles from one-point-five percent to three percent.
  • Eliminate the excise tax on lubricating oil and apply sales taxes to it.
  • Levy state and local sales taxes on repair and installation
    services for vehicles and appliances. Currently, the parts used to
    make repairs have sales taxes levied, but the labor or service call
    is not taxed.

    OTHER TAXES APPROVED IN GOVERNOR'S PACKAGE:

  • Raise state cigarette tax from 16.5 cents per pack to 31 cents and raise taxes on smokeless tobacco to generate $52.4 million dollars annually.
  • Equalize utility taxes, which would be revenue neutral.
  • Double recording fees for deeds and mortgages, which would
    generate $44.8 million annually.
  • Raise insurance premium tax to generate $5.2 million.
  • Raise bank taxes to generate $11.3 million annually.

    TAXES IN GOVERNOR'S PACKAGE THAT DIED:

  • Raising registration and title fees on cars.
  • Levying new tax on stocks and bonds.

    Status of governor's package. June 6th

    The status of Gov. Bob Riley's tax legislation and the amount to be raised or lost when fully implemented:

  • Raise cigarette tax: Passed House and Senate and gone to governor. Raise $52.4 million.
  • Raise property tax: Passed House and Senate in different
    forms. Raise $470 million.
  • Equalize utility taxes: Passed House and Senate and gone to
    governor. Revenue neutral.
  • Double mortgage and deed recording fees: Passed House and
    Senate and gone to governor. Raise $44.8 million.
  • Raise sales tax on cars and repairs: Passed House and Senate
    in slightly different forms. Raise $203 million.
  • Remove tax credits for insurance companies: Passed House and
    Senate and gone to governor. Raise $5.2 million.
  • Reduce business privilege tax on banks: Passed House and
    Senate. Gone to governor. Lose $8.4 million.
  • Eliminate some tax deductions for banks: Passed House and Senate and gone to governor. Raise $19.7 million.
  • Raise income taxes: Passed House and Senate in different forms. Raise $415 million.
  • Levy tax on stocks and bonds: Passed House and pending in Senate. Raise $45 million.
  • Raise car registration and title fees: Died in House. Raise $38.2 million.
  • Place Riley's tax and accountability plan before voters in September referendum. Passed House and Senate in different forms.

    The status of the governor's accountability bills:

  • Ban "pass-through pork": Passed Senate and pending in House.
  • Create college scholarship program: Passed House and Senate in
    different forms.
  • Require state employees and teachers to pay more toward their
    health insurance costs: Passed House and Senate in different forms.
  • Create separate, unearmarked fund for new tax revenue: Passed
    House and pending in Senate.
  • Streamline tenure law for dismissing teachers. Passed Senate and House. Gone to governor.
  • Streamline dismissal law for school support workers. Passed Senate and House and gone to governor.
  • Remove tenure protection for assistant principals, instructional supervisors and school financial officers. Passed Senate and House and gone to governor.
  • Extend school year five days and provide enough school staff to meet accreditation standards. Passed House and Senate and gone to governor.
  • Provide incentives to teachers who go into areas with shortages: Passed Senate and House and gone to governor.
  • Institute new financial standards for schools. Passed House and Senate in different forms.
  • Guarantee that teachers will be rehired for the next school year, even if tax package is defeated. Passed House and Senate and gone to governor.

    Two of Riley's tax bills pass. June 5th

    (Montgomery-AP) -- Two more of Governor Riley's tax bills have passed the Legislature. The House gave final approval today to a
    bill to eliminate some tax deductions on banks. And the House and
    Senate gave final approval to the bill raising the state cigarette tax from 16-one-half cents a pack to 31 cents a pack. Some legislators complained that the bill was amended to keep cities and counties from raising their cigarette taxes.

    The Senate this afternoon also approved the governor's bill to require active and retired state employees and education workers to pay toward the cost of their state-funded health insurance.

    The governor's state finance director, Drayton Nabers, says the governor is pleased with the progress that's being made on his tax
    and accountability package.

    The Legislature must end its special session on the governor's package by this weekend.

    Tag tax apparently dead in Legislature. June 4th

    (Montgomery-AP) -- A bill to raise the registration fee for buying a car tag by seven-dollars is apparently dead in the Alabama House.

    The bill's sponsor, Montgomery Representative Dick Brewbaker conceded yesterday the legislation has been shelved.

    The car tag bill was added last week to Governor Bob Riley's tax and accountability package to raise $1.3 billion in new tax revenue by 2008. It was expected to raise an estimated $38.2 million to replace some of the revenue lost in amendments to the governor's package added in the
    Legislature.

    The bill came up for debate in the House Monday night, but House members immediately raised objections and offered a series amendments that would have used the money for causing ranging from
    mass transit in Birmingham to a museum in Macon County for the
    Tuskegee Airmen.

    Press Secretary David Azbell said the tag bill was not an important part of the governor's package.

    Riley's tax bills moving in Senate. June 3rd

    (Montgomery-AP) -- Governor Riley's tax package keeps making progress in the state Senate. The Senate Finance and Taxation-Education Committee voted 14-to-nothing today for Riley's bill to raise 460 (M) million dollars from income taxes. That would come primarily from eliminating deductions.

    The Senate Finance and Taxation-General Fund Committee voted 9-to-4 today for a bill raising taxes on banks. Both bills now go to the Senate for consideration.

    The Senate approved the governor's cigarette tax hike last night, but the Senate rewrote it to prevent cities and counties from raising their taxes on cigarettes. The House refused today to go along with that change. That means the bill will go to a conference committee that will try to work out a compromise between the Senate and House.

    Riley's tax bills survive in Senate. June 2nd

    (Montgomery-AP) -- Governor Riley's tax package passed critical tests today in the state Senate. The Senate voted 27-to-5 for a revised version of his cigarette tax bill. It hikes the tax from 16.5 cents a pack to 31 cents.

    The Senate also approved the governor's bill to extend the school year by five days.

    A Senate committee voted without dissent to approve the governor's bill raising the sales tax on cars and placing sales taxes on installations and repairs.

    That bill now goes to the Senate for consideration. The other two bills have to go to the House for review.

    House passes bill to change property tax laws. June 2nd

    (Montgomery-AP) -- The Alabama House voted for a bill that would
    dramatically change the state's property tax law and raise about $400 million a year in new revenue by 2008.

    The property tax bill is one of the two major planks in Governor Riley's package of tax and accountability bills to raise one point three billion dollars in new tax revenue. A bill to raise about $460 million a year by raising income tax on high income citizens and corporations passed the House Friday.

    The House is continuing to debate tonight a bill that ties all parts of the governor's package into a constitutional amendment to be voted on in a statewide referendum in September.

    The House voted 52 to 38 in favor of the property tax bill. It will cause the owner of a $100,000 house to pay an extra $11 a month.

    Tax increases may be ahead regardless of Riley's plan.

    If the state Legislature or Alabama voters kill Governor Riley's $1.2 billion tax package, it doesn't mean there won't be tax increases.

    Instead, it means the Legislature may enact tax increases in September that don't require a vote of the people. Says Bill O'Connor, manager of the Campaign for Alabama: "Revenue has to be found. If it's not, important services -- life-supporting services -- will be jeopardized." O'Connor manages the business organization that helped Riley develop his package and is running ads to support it.

    The Legislature starts its final week in special session to consider Riley's tax and accountability package. If the Legislature approves Riley's package this week (w/o 6/2), it wouldn't take effect unless approved by Alabama voters. State law requires that such a referendum must be delayed for 90 days after legislative passage, which will put it in early September.

    Riley would bring the Legislature back into special session immediately after that referendum to enact state budgets for the fiscal year starting just three weeks later.

    House committee changes tax package at request of Hubbert.

    Teachers' lobbyist Paul Hubbert won a fight with Governor Bob Riley's administration over earmarking some money from the $1.2 billion tax package to be used to prevent future cuts to the education budget.

    The House Education Finance and Appropriations Committee changed a proposed constitutional amendment to designate a percentage of the increases from the tax package to go to the education budget in slow economic years.

    Riley has requested that all new money from the package, which raises income and property taxes, go into an Alabama Excellence Initiative Fund and not be earmarked for specific purposes.

    Riley's finance director, Drayton Nabers, said the change could endanger Riley's tax package, which is expected to raise enough money to fill a $675 million hole in the state's budgets next year and provide additional money for future years.

    Nabers declined to elaborate when asked if Riley might withdraw his entire package if the change remains.

    Income tax bill passes House committee

    An Alabama House Committee has approved a bill that will raise almost a half billion dollars by increasing income taxes for wealthier citizens and corporations. The bill lowers the tax burden on lower and middle-income residents.

    The House Government Finance and Appropriations Committee voted
    eight to six to pass the income tax bill. It is the largest single part of Governor Riley's plan to raise one point two billion dollars in new tax revenue a year.

    The new money is to be used to fill a projected $700,000 hole in next year's budget and to provide extra money for future years.

    The income tax bill will be considered by the full House tomorrow (Friday).

    The committee turned down an amendment by Representative Laura
    Hall of Huntsville that would have given lower income Alabama residents a tax credit on their income tax to offset having to pay sales tax of food products.

    Riley's tax bills delayed in House committees

    The Alabama House has passed the first five bills in Governor Riley's one point two billion dollar package of tax bills.

    One of the bills would raise the tax on pack of cigarettes from 16.5 cents to 31 cents. That bill passed the House on 76 to 20 vote.

    The House also passed a bill that would double the tax charged to record deeds and mortgages. Another bill passed by the House would levy a one dollar tax on every one thousand dollars of stocks, bonds and other intangibles beyond $100,000 for individual taxpayers and $200,000 for joint taxpayers.

    The five bills were among the first bills to come up in the House in a special session to consider Riley's package of tax and accountability bills. The governor is trying to fill an anticipated almost $700 million deficit in next year's state budgets and to create additional revenue for future years.

    House committee approves first tax bill

    A House committee has passed the first bill in Governor Bob Riley's tax package that would raise $1.2 billion in tax revenue.

    The House Education Finance and Appropriations Committee today (Wednesday) approved legislation that would levy a $1 tax on every $1,000 of stocks, bonds and other intangibles.

    The first $100,000 stocks and bonds owned would be exempt for an individual taxpayer and the first $200,000 would be exempt for joint taxpayers.

    The bill would raise about $55 million a year.

    Both House budget committees began work this morning on the tax bill.

    Legislative committees begin looking over governor's proposals.

    Legislative committees in the House and Senate begin the process of reviewing Gov. Bob Riley's package of tax and accountability bills.

    Monday night in a televised speech, Riley said Alabama's defining moment is here. He asked taxpayers to support the largest tax increase in state history.

    He didn't give specifics. But Riley did say legislators cannot balance the budget by making cuts alone. He said doing so would have disastrous consequences. That includes laying off teachers, opening prison doors and cutting extracurricular activities in schools.

    Riley said, "These are not scare tactics. This is reality, and I cannot, in good conscience, order such cuts."

    His tax plan would affect property, income, sales and business taxes. His state finance director, Drayton Nabers, says it would raise taxes for 35-percent of Alabamians with the highest incomes. But he says the other 65-percent should pay less or about the same.

    House Speaker Seth Hammett calls it the boldest package he's ever seen from a governor.

    Some say more taxes OK as long as money goes to schools.

    Dotsie Hall of Wetumpka says she won't vote for the tax increases proposed by Gov. Bob Riley unless she sees proof that the money will be spent responsibly.

    The governor's tax package was a hot topic among customers at Ron Kennedy's fruit stand on U.S. 231 Monday afternoon, with most people agreeing that Alabama public schools need more money. But they were skeptical that new tax revenue will ever reach Alabama classrooms.

    Forty-four-year-old Donnie Sullivan of Wallsboro said he's tired of hearing about government and education officials getting pay raises and he thinks his taxes are high enough.

    But 33-year-old Lee Smith of Montgomery said he would vote for the tax increase if he was assured that 110 percent of the money would be spent for education.

    Kennedy said he thinks Riley is proposing the wrong remedy to the state's financial problems. He thinks politicians should consider a lottery.

    In Montgomery, parents and grandparents picking up children at Forest Avenue Elementary School said they weren't crazy about paying higher taxes, but were willing to do it if they were assured the money would go to improve schools.

    Highlights of Alabama governor's accountability plan.

    Highlights of Governor Riley's accountability plan:

  • Pay the full tuition at a public university, college or two-year school to Alabama students who meet still-to-be-determined academic standards.

  • Don't earmark, or set aside, any new tax revenue for a specific purpose so the Legislature and governor can decide its best use each year.

  • Require many state employees and public education employees to pay more toward the cost of their health insurance until they reach the regional average. Employees making less than twice the federal poverty level would receive discounts.

  • Require state workers and public education employees who retire with less than 25 years of service to pay more toward their health insurance.

  • Prohibit "pass through" pork, where legislators hide their special projects in the budgets of state departments.

  • Direct the State Board of Education to create financial incentives for teachers who go into underserved regions and hard-to-staff subject areas.

  • Provide scholarships to students who agree to teach in underserved regions or hard-to-staff subject areas.

  • Abolish the state Tenure Commission and use arbitration in teacher dismissals.

  • Remove tenure for school administrators, supervisors and
    financial personnel.

  • Require the state superintendent of education to educate and
    test local superintendents on fiscal management.

  • Require financial audits of all public school systems.

  • Increase the school year from 175 to 180 days.

  • Increase funding for the Alabama Reading Initiative so it is available to every child.

  • Expand the Alabama Math and Science Initiative, which provides
    students with intensive training in math and science.

  • Provide every school with distance learning capabilities so a
    teacher in one city can instruct classes in other cities.

    Tax impact - examples of Riley's tax package.

    How Governor Bob Riley's state property tax plan would affect
    homeowners:

  • Drop the state tax from $6.50 annually to zero on a $50,000 house.

  • Increase the tax $93 a year on an $85,000 house, which is the average home price in Alabama.

  • Increase the tax $136 a year on a $100,000 house.

  • Increase the tax $421 a year on a $200,000 home.

    How the governor's income tax plan would affect families:

  • Cut as much as $600 for a single mother who makes $35,000 a year and has three children.

  • Cut as much as $150 for a married couple with two children and a $70,000 income.

  • Increase as much $940 a year for a married couple with two children and a $150,000 income.


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