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Is the Legislature about to pass a $250 million backdoor tax increase?

Craig Ford

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By Rep. Craig Ford

It doesn’t claim to be a $250 million tax increase, but that’s exactly what would happen if the State Legislature passes a proposed bill to privatize the state’s ABC stores.

Though it may seem like a reasonable, pro-private sector bill that would decrease government bureaucracy and expenses, in reality this bill would hurt small businesses, cost the taxpayers $250 million (or more) a year and worsen the “wild west” situation we already have with private liquor stores.

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Simply put, this bill is a “wolf in sheep’s clothing” that has managed to draw opposition even from ALCAP (the Southern Baptist organization that identifies itself as “Alabama’s Moral Compass”), who fear it would lead to more liquor sales and alcoholism.

Even if it doesn’t lead to more liquor sales, this legislation repeals Alabama’s liquor laws, which will only worsen the “wild west” system we already have, and make it more difficult to track sales and tax collections, as well as allowing direct shipments of spirits.

We already have a serious problem in this State with private retailers not paying taxes, which is why the legislature is taking on other legislation this year to better track retailers. But with the ABC stores, we know what their sales are and that all of their “profits” are going directly to the State’s General Fund Budget.

Privatizing our ABC stores will only result in more tax fraud and tax evasion, and more sales to underage people, since you don’t have to prove your age for a direct shipment or if the store simply doesn’t report that it sold liquor to an underage person.
Moral and public safety arguments aside, this bill is a bad deal for the taxpayers and small businesses.

Supporters of this bill are making several assumptions that are not exactly safe bets. The first is that the closed ABC stores will be replaced by private stores that will fill the void and hire former ABC employees.

In reality, what will happen is that the “Big Box” stores and chains, such as Walmart, Costco, Sam’s, Dollar General, most grocery stores, and everyone else who sells beer or wine, will now get into the liquor business. When that happens, those small mom and pop liquor stores will have far more competition, and many will go out of business.

This also means that the profits these big box stores and chains make will be going out-of-state instead of coming back into the State’s General Fund Budget.

And don’t count on those jobs coming back, either. Since the state of Washington privatized their public liquor stores in 2011, half of their former employees are still unemployed. But even if every single employee is able to find another job, there’s no guarantee that their new jobs will pay anything above minimum wage or include any kind of benefits.

Now, you may be thinking, “Ok, so some people may lose their jobs or take a big pay cut. And maybe a lot of the mom and pop liquor stores will go out of business when Walmart starts selling the same liquor for a better price. But at least it will save the taxpayers’ money to close down these ABC stores and not have to pay for all these employees and their benefits.”

The problem with that argument is that the taxpayers aren’t paying for these stores or the employees and their benefits. In fact, instead of taking money from the State, the ABC stores are making money for the State.

Last year, the ABC stores generated $250 million in revenue for the state – and that’s after paying their employees salaries and benefits, as well as paying all of their overhead costs.

If we privatize our ABC stores, the State of Alabama will lose $250 million out of our State budget, and I don’t know a single legislator who will tell you we can cut $250 million out of our budgets to make up for the lost revenue.

So while this bill might look like it’s saving the taxpayers money, it’s actually going to cost the taxpayers an additional $250 million a year (or more, if sales go up and private retailers continue failing to accurately pay their taxes).

If this bill passes, the only option will be to raise taxes by $250 million or more over the next five years to make up the difference.

Privatizing the ABC stores may sound like a good idea, but the end result would be more people out of a job, more private stores going out of business and more taxes on the working families of Alabama.

 

Rep. Craig Ford represents Gadsden and Etowah County in the Alabama House of Representatives. He served as the House Minority Leader from 2010-2016.

 

Rep. Craig Ford is an Independent who represents Gadsden and Etowah County in the Alabama House of Representatives. He served as the House Minority Leader from 2010-2016.

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Guest Columnists

Opinion | Fighting the opioid epidemic

Bradley Byrne

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For too long, a problem of epic proportion has been growing outside of the headlines in the United States: the opioid epidemic.  The reality is that we can no longer wait to take action.  Drug overdose is now a leading cause of death in the United States.  One hundred seventy-five Americans are dying every day from this crisis. From big cities to small towns, the opioid epidemic has hit our communities hard.

Unfortunately, Alabama has not been spared.  According to the Centers for Disease Control and Prevention (CDC), Alabama ranks highest in the nation as having more opioid prescriptions than people.  Alabama also ranks number one as the highest prescribing state in the nation for opioid pain reliever prescriptions. These statistics are incredibly alarming.

An opioid is a type of narcotic derived from the opium poppy, which includes drugs such as morphine, codeine, hydrocodone, and oxycodone. While these drugs are often prescribed in response to injuries and body pains, they can be prone to abuse and addiction.

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The reality is many of the people who become addicted to opioids first start taking the drugs legally after receiving a prescription from a doctor.  For example, I have heard testimony from athletes who suffer a sports-related injury, undergo surgery, and then become addicted to opioids during the recovery process.  In many cases, this addiction can escalate, driving individuals to street drugs like heroin.

Almost all of us have a loved one or know somebody who has been affected by this terrible epidemic.  The personal stories are what make this nightmare a harsh reality.  Right here in Southwest Alabama, I have heard far too many stories about the dangers of prescription drug abuse.  The impacts of this crisis reach far beyond the person suffering from addiction to parents, to children, to brothers and sisters.  So many have been hurt.

On October 26, 2017, President Trump announced that his administration would declare the opioid crisis a Nationwide Public Health Emergency.  On a strongly bipartisan basis alongside President Trump, Congress is also responding.

In March, the House voted to set aside $4 million toward combating the opioid crisis in the government funding bill for Fiscal Year 2018.  We kept up the momentum last week when the House passed over 25 targeted bills to help prevent and treat opioid addiction and abuse while also ensuring our nation’s drug laws are working to stop the flow of illegal drugs.

One such bill that passed the House is the THRIVE Act, which creates a program to provide low-income individuals recovering from opioid and other substance use disorders with a clean, safe, and structured environment following rehabilitation.

Additionally, the House passed the STOP Act, which aims to halt opioids like fentanyl from coming into America from other countries through a loophole at the Postal Service. The majority of opioids arrive to America through the mail from other nations, such as China, Mexico and Canada. So, this legislation represents an important step to help solve the problem.

It is clear that our work to end the opioid epidemic is far from over.  However, I was pleased to see such strong bipartisan support for many opioid bills this week as we work to make a real difference on behalf of the American people.  You can learn more about the legislation we are working on at www.opioidcrisis.gop.

We cannot and will not sit back and allow the opioid crisis to take the lives of the people we love. We must fight back and ensure Americans get the help they need. I look forward to continuing the work with President Trump to end this epidemic once and for all.

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Guest Columnists

Opinion | Electric vehicles make sense for Alabama drivers

Mark Bentley

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As many as 50 million Americans are about to flip the switch over to electric automobiles with their next purchase, according to the American Automobile Association. A recent survey conducted by the AAA found that popularity of electric cars is trending upwards. With infrastructure and availability all here, Alabama can lead the charge toward electric vehicles.

In its survey, AAA asked Americans if they were considering electric vehicles for their next car purchase. The survey found that 20 percent of Americans say their next vehicle will be an electric car – up 5 percent from 2017.

The Alabama Clean Fuels Coalition encourages Alabamians to make the move to an alternative fuel vehicle, such as an electric car. Electric vehicles offer nothing but benefits, from being more cost-efficient due to cheaper fuel to less expensive maintenance to being environmentally friendly.

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Alabama’s relationship with Mercedes-Benz could be a factor in the state’s future with electric vehicles, too. The automaker announced in January it would be rolling out an electric version of each of its vehicles by 2022. With Mercedes – and most other automakers – launching more electric options, there have never been more alternative fuel vehicle options than we have today.

The Tuscaloosa County facility is the only Mercedes plant in the United States, and it will play a central role in the production of these electric vehicles. As these electric vehicles begin to be produced by the people of Alabama, the next logical step is for them to begin driving them as well.

There has never been a better time to switch over to electric. It is a common misconception that it is a hassle to charge your electric car, whether that be at home or on the road. Charging at home can be done through a 120-amp power supply, which is the same three-prong outlet that powers your television.

The Alabama Clean Fuels Coalition is determined to make driving an electric vehicle in Alabama comfortable by assisting in getting proper infrastructure in place. Alabama currently has 84 electric charging stations, and a total of 198 charging outlets scattered across the state in almost all major cities.

More and more charging stations will continue to pop up across the state as more electric vehicles hit the streets. Current electric charging stations can be found at convenient locations in public, and some residential areas. The new Tesla charging stations in downtown Birmingham are just one prominent example. Several online sites, such as plugshare.com, provide charger locations.

The Alabama Clean Fuels Coalition serves as the principal coordinating point for clean, alternative fuel and advanced technology vehicle activities in Alabama. The ACFC is part of the national network of nearly 100 Clean Cities coalitions that bring together stakeholders in the public and private sectors to deploy alternative and renewable fuels, idle-reduction measures, fuel economy improvements and emerging technologies.

According to Alabama AAA PR and Marketing Director Clay Ingram, our state is warming up to electric vehicles as the technology and infrastructure begins to develop at a rapid pace.

“We have come a long way in accepting this, in a short number of years,” Ingram said. “We love our vehicles in Alabama, and I think there is a lot of room for (electric vehicles) as the technology continues to develop.”

With an average gas price of $2.91 – its highest cost since 2014. Gas prices are expected to increase over time without any anticipation of dropping. The average American spends $1,400 on gasoline a year, while average electric vehicle charging costs are $540 annually. Unlike gasoline cars, electric vehicles don’t typically require oil changes, fuel filters, spark plug replacements or emission checks. In electric vehicles, even brake pad replacements are rare due to the fact regenerative braking returns energy to the battery.

With all the aforementioned factors in mind, it is no surprise that the AAA estimated a below-average cost of ownership with electric vehicles. Electric cars also are the least expensive when it comes to yearly maintenance.

Since the 1970s, lawmakers in the United States have been putting effort into facilitating the research and growth of electric cars. The urge to reduce carbon emissions has given electric car production a lift. Electric vehicles emit an average of 4,500 pounds of CO2, with gasoline cars emitting more than double that.

This current shift to electric will not only have an environmental impact, but also an economic one. According the U.S. Energy Information Administration, the United States has made progress in importing less oil, but still imports nearly 20 percent of what is consumed. The increasing use of electricity as an alternative fuel will further push the United States toward economic independence from foreign countries.

The benefits to driving an electric car are endless! To learn more about the Alabama Clean Fuels Coalition and advice on purchasing an alternative fuel vehicle, please visit www.alabamacleanfuels.org.

Alabama Clean Fuels Coalition, a nonprofit membership-based organization, is the state’s principal coordinating point for alternative fuels and a member of the U.S. Department of Energy’s Clean Cities program. The promotion of clean, renewable, domestic energy sources helps reduce our dependence on foreign oil, improves local air quality and increases economic development opportunities in our local communities. For more information, please visit www.AlabamaCleanFuels.org or call 205-402-2755.

 

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Guest Columnists

Opinion | Biofuels are still an important component of our energy mix

Steven Taylor

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During the last 15 years, biofuels have been a hot topic in the energy production world. You could hardly turn on the television or radio without hearing about the latest research and benefits of biofuels, which can be produced from agricultural and forest residues and dedicated energy crops. In fact, to help encourage the development of biofuel technologies, Congress provided tax breaks and incentives for companies that produced and sold biofuels.

Times have changed, though, and biofuels are not a front-page story today. Presently, natural gas is the darling of the electrical power industry for baseload operations. It’s clean, relatively inexpensive and readily available. Many power plants and manufacturing facilities are converting their old boilers to burn natural gas. Natural gas is on a high and there’s no forecast to determine when it will come down.

But for a moment, let’s reexamine biofuels, as they can still play an important role in our state’s energy production and economic development. According to the Energy Institute of Alabama, our state ranks fifth in the nation for electricity generation from biomass-based fuels. Biomass consists of plants or plant-based materials such as agricultural crop residues, forest residues, or dedicated energy crops such as switchgrass or fast-growing trees. These various sources of biomass can be used not only for generating electrical power or making liquid transportation fuels like gasoline or diesel fuel, but they can create a wide arrary of co-products like plastics and adhesives.

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Here at Auburn University, we are conducting research to maximize the usage of biomass for conversion to biofuels and valuable coproducts. While most people think of corn-based ethanol when biofuels are mentioned, researchers at Auburn are advancing the technology to convert grasses, pine trees and hardwoods to gasoline, diesel, and jet fuels. And to make the fuel production process more economically feasible, we are developing a suite of co-products that can be produced at the same time.

Through grants from Alabama Power Co., the Electric Power Research Institute, the U.S. Department of Energy and the U.S. Department of Agriculture, we have been addressing many of the challenges in using biomass to create renewable biofuels and electrical power. One of the greatest challenges with biomass-based fuels is logistics. Forest and agricultural biomass is usually scattered and is difficult to collect and transport cost-effectively using traditional harvesting machines and trucks. In projects sponsored by the Departments of Energy and Agriculture, we have developed innovative and efficient ways to collect and transport the biomass from its original site to a power plant, refinery, or manufacturing facility. Other research is developing biochemical and thermochemical methods to convert the biomass to liquid fuels, chemical products, and electrical power.

Auburn researchers are also tackling the challenge of capturing gases emitted from landfills. Currently, it’s cheaper to flare the landfill gas than it is to clean and transport it to another location for re-use. Our faculty have developed methods to remove unwanted sulfur from the gas which then makes the gas valuable for production of electrical power or liquid fuels. Additional research has developed smaller-scale, more cost-effective reactors that can convert this gas to gasoline and diesel. Once these processes have been perfected, it will not only allow electric utilities and fuel producers another viable option in clean fuel choices, but the resulting new industries will open the door for more employment opportunities, particularly in our rural areas where forest and agricultural biomass is produced

As you can see, these are exciting times for Alabama’s energy industry. We are continuing to expand our diverse energy base, while finding new ways to utilize resources already in place. Biomass and the resulting biofuels can and will continue to play an important role in adding to our resource mix. To learn more about Alabama’s reliable, clean, affordable energy resources, visit the Energy Institute of Alabama at: https://energyinstituteal.org.

 

Dr. Steven Taylor, P.E. is Professor and Associate Dean for Research
Samuel Ginn College of Engineering Auburn University.

 

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Is the Legislature about to pass a $250 million backdoor tax increase?

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