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Annual reminder: Alabama is last in state, local tax collection

Chip Brownlee

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Here’s an annual reminder for you as you decompress from filing your tax returns: Alabama’s state and local governments are collecting less in state and local taxes than any other state in the United States.

Good right? Maybe. Maybe not.

As Tax Day — and an extended deadline caused by web portal outages — pass, 2018 may mark another year when Alabama pulls in less money per capita to operate its state services than any other place in America.

Even less than Mississippi.

Alabama has been behind in tax collection since the early 1990s, according to the Public Affairs Research Council of Alabama, which has produced an analysis of Alabama’s tax revenues since 1988.

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The low taxes are often the largest catalyst for perpetual budget crises in Montgomery and the biggest bump in the road as lawmakers try to balance the two state budgets, a constitutionally mandated requirement.

Budgeting over the last two years in Alabama has been a lot smoother because the state has had billions on hand from a settlement with BP Oil over the 2011 Deepwater Horizon oil spill, but as we head into 2019, Alabama is expected to face another dramatic budget shortfall.

The last major shortfall in 2015 led to an increase of some taxes, including the cigarette tax and taxes on nursing home beds — but property and income taxes haven’t moved much in years.

While Alabamians are some of the most averse to taxes, the meager tax collections provide a strained pool of money not just for the finance of often unpopular government programs but also popular public services like schools, roads, courts, health care and public safety.

PARCA conducted the analysis of Alabama’s tax revenues by relying on the U.S. Census Bureau and its annual survey of state and local governments across the country.

State and local spending are considered together because vary in how they decide to divide up the taxation and collection responsibilities for funding public services and government.

Alabama has the lowest property taxes, both state and local, in the country, ranking 50th of the states. Alabama’s property taxes fund education, state and county general funds and county road and bridge funds.

Alabama and its local governments have developed a reliance on the sales tax and already has some of the highest sales tax rates in the country. And unlike other states, our sales tax applies to groceries and medications.

Sales taxes are often considered regressive because they more heavily affect low-income individuals than high-income individuals.

Despite those high sales tax rates and their effect on the cost of groceries and medication, Alabama’s per capita state and local sales tax collections rank 30th among the 50 states because Alabama’s sales taxes are not as productive.

That, according to PARCA, is because of the smaller tax base of economic activity and because Alabama’s sales tax is narrow compared to most states.

Alabama sales tax applies to almost all sales of goods, but it does not apply the tax to most kinds of business, professional, computer, personal or repair services. And in recent years, the economy has moved more toward the consumption of those services, lessening the effectiveness of Alabama’s sales tax.

In 2015, the last year PARCA performed its analysis, state and local governments collected a total of $15 billion in taxes or $3,144 per resident. Across the U.S., the media per capita value for state and local taxes was more than $1,230 higher at $4,379.

If Alabama collected taxes at a per capita rate equivalent to the national median, the state would have $6 billion more to spend on public services like building and maintaining roads, providing police and fire protection and operating civil and criminal courts — not to mention schools, colleges, libraries and parks, according to PARCA.

Even if national comparisons aren’t inviting, Alabama even stands out among other states in the South when it comes to revenue.

South Carolina, Tennessee, Georgia, Florida, Mississippi and Louisiana all collected significantly more, per capita, than Alabama. If Alabama collected taxes at the same rate as Georgia, for example, the state would have about $1.8 billion more in tax revenue. If it collected the same amount of revenue as Louisiana, it would have $3.9 billion more.

(via Public Affairs Research Council of Alabama)

Alabama has lower tax revenue than other states primarily because of lower tax rates, but a lower-than-average base of wealth also puts the state behind, PARCA said.

(via Public Affairs Research Council of Alabama)

Tennessee and Florida collected less taxes as a percent of personal income — largely because those states don’t collect income taxes — than Alabama. But their higher base of wealth puts them at an advantage, and the states pursue other funding sources — like higher property taxes — to make up for lower income tax revenues.

Alabama’s collections amount to about 8.2 percent of total personal income of state residents. In Mississippi, total personal income is lower than Alabama, but that state’s collections amounted to 10.6 percent of total personal income.

(via Public Affairs Research Council of Alabama)

Because of their greater effort at tax collection, the states have more money to spend per capita than Alabama.

A full analysis of Alabama’s tax system can be found here.

 

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Elections

Secretary of State’s Office begins voter fraud investigation in Wilcox and Perry Counties

Brandon Moseley

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Turnout in Tuesday’s primary runoff was just 12.7 percent across the state. That percentage, however, varied wildly across the state.

Many Democrats did not vote as there were not any statewide Democratic runoffs. Understandably then, the counties with the worst voter participation rates were Democratic dominated Black Belt Counties. Choctaw County was the worst in the state with an incredibly low .59 percent. It was followed by Hale with 1.53 percent. Third worst was Sumter with 1.6 percent followed by Bullock with 2.8 percent.

The Blackbelt had the worst voter turnout; but it also recorded by far the highest turnouts in Tuesday’s runoff election.

The Wilcox County probate judge’s race was apparently so exciting that 44.1 percent of voters turned out despite the heat and no statewide Democratic races.

Wilcox County has 11,058 people. 1,631 of those are under 18. There are only 9,423 voting age persons in the county, but an impressive 9,383 of them are registered voters. That is almost an impossible 99.59 percent voter registration rate. An incredible 4,167 of those voters made time in their day to cast a ballot in Tuesday’s runoff. 4,061 of those voted in the Wilcox County probate judge race, between Democrats Chris Stone and Britney Jones-Alexander. Alexander won the contest. The 44.41 percent voter turnout for the poor Black Belt county was three and a half times the state average.

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Perry County had a 36.35 percent turnout and they were followed by Dallas at 35.43 percent and Greene at 34.08 percent.

The Secretary of State’s office has some suspicions about the success of some of these rural community organizers ability to turn out their votes. Secretary of State John Merrill has launched an investigation into Wilcox and Perry Counties because the number of absentee ballots appears to be unbelievably high.

Sec. Merrill told the Alabama Media Group’s John Sharp that his office is “looking into to prospects of absentee broker operations, in which campaign workers or people with an unknown organization, exchange gifts or cash for absentee ballots.”

Secretary Merrill has said that he wants to make it easy to vote; but hard to cheat.

Below are voter participation rates for all 67 counties:
Wilcox – 44.41%
Perry – 36.35%
Dallas – 35.43%
Greene – 34.08%
Covington – 31.32%
Marion – 27.85%
Fayette – 27.71%
Lamar – 26.19%
Lowndes – 25.47%
Walker – 25.01%
Clay – 24.12%
Coosa – 23.8%
Macon – 21.95%
Crenshaw – 21.09%
Blount – 20.77%
Elmore – 18.92%
Geneva – 18.73%
Marshall – 18.72%
Chilton – 18.08%
Coffee – 18.07%
Autauga – 17.39%
Montgomery – 17.34%
Bibb – 17.02%
Pike – 16.61%
Tallapoosa – 16.42%
Henry – 16.4%
Dale – 15.67%
Baldwin – 15.57%
Houston – 15.03%
Jackson – 14.33%
Limestone – 13.16%
Jefferson – 12.6%
Winston – 12.27%
De Kalb – 11.68%
Chambers – 11.23%
Pickens – 11.18%
Cullman – 11.03%
Shelby – 10.99%
Colbert – 10.79%
Etowah – 10.77%
Franklin – 10.73%
Talladega – 10.3%
Calhoun – 10.22%
St. Clair – 10.08%
Butler – 9.97%
Cleburne – 9.72%
Mobile – 9.49%
Randolph – 9.44%
Lee – 9.41%
Morgan – 9.07%
Barbour – 8.45%
Cherokee – 8.45%
Marengo – 8.01%
Clarke – 7.79%
Madison – 7.66%
Lawrence – 7.43%
Escambia – 7.24%
Lauderdale – 6.88%
Washington – 6.7%
Monroe – 6.46%
Tuscaloosa – 5.94%
Russell – 4.95%
Conecuh – 3.68%
Bullock – 2.8%
Sumter – 1.6%
Hale – 1.53%
Choctaw – 0.59%

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Elections

Walt Maddox, statewide candidates host forum in Gardendale

Brandon Moseley

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Tuscaloosa Mayor Walt Maddox will headline a forum for Democratic candidates at the Gardendale Civic Center on July 30 at 6 p.m. Maddox will be joined by a host of other statewide legislative and local candidates.

Maddox claims that he offers voters a path forward out of the state’s corruption and funding crisis.

“It’s the same crisis we’ve been facing for the last seven years,” says gubernatorial candidate Maddox. “If we don’t do something today, there will be no tomorrow; we need safe infrastructure, access to healthcare and good paying jobs.”

The organizers say they “put people before party” so they can bring about change in Alabama.

“As taxpayers, we have been shortchanged for too long,” says former Gardendale City Councilman Blake Guinn, who is working for the Maddox campaign and is one of the forum’s organizers. “I’m tired of being last in everything but football. I’m looking for candidates who have the energy, intelligence, and vision to move this state forward.”

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Most Alabama politicians are just “rubberstamp” what their national party says, says Jennifer L. Greer, a retired university assistant professor who lives in Gardendale and is also organizing the forum. “I don’t care about Washington. I care about Alabama and getting services for my tax dollars, like Alabama’s First-Class Pre-K in every community.”

Maddox will be joined at the Gardendale forum by:

  • Danner Kline, candidate for U.S. House of Representatives, 6th Congressional District.
  • Judge Robert “Bob” Vance, Democratic candidate for Chief Justice of the Alabama Supreme Court.
  • Dr. Will Boyd, Democratic candidate for Alabama Lieutenant Governor.
  • Joseph Siegelman, Democratic candidate for Alabama Attorney General.
  • Heather Milam, Democratic candidate for Alabama Secretary of State.
  • Donna Smalley, Democratic candidate for Alabama Supreme Court, Place 4.
  • Cara McClure, Democratic candidate for Public Service Commission, Place 1.
  • Kari Powell, Democratic candidate for Public Service Commission, Place 2.
  • Veronica R. Johnson, Democratic candidate Alabama House District 51.
  • Danny Carr, Democratic candidate for Jefferson County District Attorney.

The event is free and open to the public.

Democrats have renewed enthusiasm after Doug Jones defeated Roy Moore for U.S. Senate. Prior to that win, the last Democrat to win a statewide office in Alabama was Lucy Baxley, who was elected to president of the Alabama Public Service Commission in 2008. The last time a Democrat won a gubernatorial election was 1998, when Don Siegelman defeated incumbent Republican Fob James.

The general election will be November 6.

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News

Shelby announces $25.5 million for statewide airport infrastructure

Brandon Moseley

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Thursday, U.S. Senator Richard Shelby, R-Ala., reported that 25 local airports throughout Alabama will benefit from more than $25.5 million in Federal Aviation Administration grants. The funding was awarded by the U.S. Department of Transportation for various airport improvements to support infrastructure construction, safety advances and equipment acquisition.

“These FAA grants support critical projects that aim to improve safety, security, and efficiency of airports across the state,” said Sen. Shelby. “Airport infrastructure plays a vital role in economic growth and development in Alabama, and I look forward to the progress that will stem from these grants.”

Economic Developer Nicole Jones told the Alabama Political Reporter, “Airports affect employment directly and indirectly and serve as a catalyst for economic growth due to their capacity to move people and cargo. The economic benefits can only be reaped, however, when airports are maintained (and funded) properly and utilized by consumers, which is why the FAA grants will be such a blessing for our state.”

“When operated efficiently, smaller, local airports (most of the recipients of the FAA grants), facilitate regional economic development,” said Nicole Jones. “The grants are aimed to do just that – provide maintenance funds so the airports can maximize efficiency and productivity. Thank you to Senator Shelby and to all of the policymakers who worked on behalf of Alabamians to improve aviation in both urban and rural areas.”

The grants range from $7.08 million for the Mobile Downtown Airport to $94,500 for the Thomas C. Russell Field Airport in Alexander City. They are funded through the Airport and Airway Trust Fund and federal appropriations.

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The 25 FAA grants, totaling $25,517,940, will support the following airport projects in Alabama:

  • Mobile Downtown Airport, Mobile Airport Authority – $7,080,027 for taxiway reconstruction, runway rehabilitation and installation of a new taxiway lighting system.
  • MacCrenshaw Memorial Airport, City of Greenville – $3,114,820 for runway reconstruction.
  • H.L. Callahan Airport, City of Fairhope – $3,033,757 for construction of an additional taxiway and access taxiways.
  • Tuscaloosa Regional Airport, City of Tuscaloosa – $2,652,600 for apron rehabilitation and a master plan study.
  • Lanett Municipal Airport, City of Lanett – $1,717,830 for construction of a runway and installation of a new runway lighting system.
  • Birmingham-Shuttlesworth International Airport, Birmingham Airport Authority – $1,417,500 for erosion repair, safety equipment acquisition, sign installation and taxiway rehabilitation.
  • Headland Municipal Airport, City of Headland – $990,000 for construction of an additional taxiway.
  • Auburn University Regional Airport, Auburn University – $832,500 for taxiway rehabilitation.
  • Enterprise Municipal Airport, City of Enterprise – $653,140 for taxiway rehabilitation.
  • Pryor Field Regional Airport, Counties of Morgan and Limestone – $495,900 for taxiway lighting reconstruction.
  • Cullman Regional-Folsom Field Airport, City and County of Cullman – $450,000 for taxiway reconstruction.
  • Carl Folsom Airport, Elba Airport Authority – $446,998 for construction a 7,200-square-foot hangar building.
  • Anniston Regional Airport, City of Anniston – $446,400 for apron and taxiway rehabilitation.
  • Marion County-Rankin Fite Airport, County of Marion – $261,000 for construction of an additional taxiway to provide access to aircraft hangars.
  • Albertville Regional-Thomas J Brumlik Field Airport, City of Albertville – $253,168 for taxiway reconstruction.
  • Shelby County Airport, County of Shelby – $249,970 for construction of a 14,830-square-foot hangar building.
  • Bibb County Airport, County of Bibb – $242,640 for land acquisition to extend protection zone.
  • Moton Field Municipal Airport, City of Tuskegee – $195,480 for runway and taxiway rehabilitation.
  • Talladega Municipal Airport, City of Talladega – $190,410 for taxiway rehabilitation.
  • Bessemer Airport, City of Bessemer – $150,000 for runway rehabilitation.
  • Prattville-Grouby Field Airport, Prattville Airport Authority – $150,000 for installation of airport drainage improvements.
  • Wetumpka Municipal Airport, City of Wetumpka, – $150,000 for installation of a new navigational aid and a new runway vertical/visual guidance system.
  • Walker County-Bevill Field Airport, Walker County – $135,000 for updates to the airport master plan narrative report and airport layout plan.
  • Ozark-Blackwell Field Airport, City of Ozark – $114,300 for runway rehabilitation and installation of new navigational aids.
  • Thomas C. Russell Field Airport, City of Alexander City – $94,500 for installation of a new navigational aid and a new runway vertical/visual guidance system.

Senator Richard Shelby is the chairman of the Senate Committee on Appropriations, which unanimously approved the FY2019 Transportation, Housing and Urban Development, and Related Agencies Appropriations Bill last month.

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Annual reminder: Alabama is last in state, local tax collection

by Chip Brownlee Read Time: 4 min
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