By Brandon Moseley
Alabama Political Reporter
The modern Republican Party has been built on the principles of lowering taxes and fighting the growth and expansion of government in to all aspects of Americans lives. That said there are two camps within the GOP: the freedom wing that believes strongly in those principles and the establishment wing that is not so opposed to big government as long as they are the ones in charge of it.
On Thursday, September 10 the Republicans in the Alabama House of Representatives chose which side they wanted to be in and most sided with the old guard establishment wing of the party: personified and led by Speaker of the House Mike Hubbard (R from Auburn). Hubbard (outside of his 23 indictments) is best known legislatively for leading the charge on Governor Bob Riley’s Amendment One debacle in 2003. Hubbard and his key allies in the legislature steamrolled the conservatives. Most of the Democrats joined the Tea Party GOP in attempting to block the tax increases.
Representative Ed Henry (R from Hartselle) voted against every proposed tax increase. An exasperated Henry said, “I think we should name today “Taxmageddon 2015!””. “The tax man cometh! Very sad day for Alabama voters who expected promises to be kept.”
The House passed taxes on nursing home beds, pharmacies, cigarettes, car rentals and car titles. The more controversial increase in the business privilege tax was carried over and is likely to come up on Friday along with the excise tax on porn.
House Minority Leader Craig Ford (D from Gadsden) told the ‘Alabama Political Reporter’ that the legislature should, “Do the lottery before we raise taxes on the people of Alabama.”
Ford said that the Democratic Caucus will not support tax increases unless there is also a lottery on the table. The Democrats also favor an expansion of Medicaid.
State Representative Phil Williams (R from Huntsville) said, “I am not totally an anti-tax guy. There are times where I would vote for tax increases.” “But we are just kicking the can down the road.”
Rep. Phil Williams said, “Trying to slow down all the tax bills that have passed today. Taxes are a necessary part of life and my family has paid a ton of them, but when we have an incredibly UNFAIR system of taxes in our state I will not vote to raise a few extra bucks to “pay the utility bills in the ivory towers of Montgomery”. So many of the political class do not even participate and work out “tax credits” for themselves. The Legislature knows this. In September 2012 we were told that if we could borrow the funds to deal with that years crisis we would make tax reform measures a priority so today’s crisis would not come. We did not, and here we are.”
State Representative Allen Farley (R from McCalla) said, “Before we can talk to the people of the state of Alabama about increasing the revenue we have to talk about how we are spending the revenue that we already have.”
Farley said that the cigarette tax is a regressive tax and as a former Sheriffs deputy he went into neighborhoods where people smoked who did not have the money to smoke. Raising the tax on those people is not going to make them quit smoking.
Rep. Farley said that the state has billions of dollars tied up because of earmarks. Lots of that money is federal dollars but “We also have $3.991 billion in state earmarked bills.” “In the last special session the Governor proposed un-earmarking $397 million of that. With the help of the Speaker’s budget we increased that to $501 million.” That passed the House but was defeated in the Senate. Farley objected to un-earmarking not being part of the call in this session. “I can’t vote for any tax until we are serious about how we are using the revenue we already have.”
Representative John Rogers (D from Birmingham) said that he opposed the plan because it, “Was just a patchwork solution.” “We have the lowest property taxes anywhere in the country.” “We need to working on a short term and a long term fix and don’t need to do a patchwork plan where we will be back here again next year.” “Close corporate loop holes.”
Rep. Will Ainsworth (R from Guntersville) said that the legislature should consider instead transferring money from the much more flush Education Trust Fund, “Education has a reserve that is just staggering to me.”
Ainsworth said, “The Cigarette tax is dead in the Senate. “We have an obligation to find a consensus.” Ainsworth said that the 78/22 plan would not be just a short term solution and would mean $163 million this year for the general fund. “I introduced that in the regular session as well as the special session and could not even get a committee hearing.”
Ainsworth suggested backfilling the use tax transfer by raising the tuition on out of state students at Alabama Universities, which he said is lower than in neighboring states. “51 percent of the students going to the University of Alabama are out of state students.” “We could raise $100 million by raising the tuition on out of state students.”
A visibly angry Speaker Mike Hubbard told Rep. Ainsworth to go back to “Go sit down.” Ainsworth was trying to introduce an amendment when Hubbard said that he had used up too much of his time. Ainsworth formally challenged the Speaker’s ruling on the rules. In a rare showdown over the rules, the House sided with Hubbard 74 to 4.
Rep. Mike Holmes (R from Wetumpka) said that he had serious concerns about the revenue stream. That the wholesalers had already bought tax stamps for the current cigarette tax and those products were already on the shelves. It could be weeks or months before the new stamps could go out. “It feels like we are legislating morality. We are making personal choices for our citizens by penalizing them for their choices.”
Rep. Connie Rowe (R from Jasper) carried the cigarette tax bill for the establishment. Rowe said, “I feel like this is part of the solution to keep our state government operating,” but admitted, “I don’t feel good about raising taxes.” Rowe justified the cigarette tax because, “I understand that this one polls well in the state.”
Rep. Henry said, “No one in my district told me to go to Montgomery to take more of their money to grow government.”
House Ways & Means Committee Chairman Steve Clouse (R from Ozark) praised the “Very vigorous debate”; but said that, “The vote was a little closer than I thought it would be.”
Clouse said that if the business privilege tax does not pass then we will have to cut another $22 million out of the budget.
Henry said on Facebook, “House passes another tax on your title fee this time. They pushed another vote 51-49 to almost double the price of your car title.”
The 33% increase to the car rental tax passed just 50 to 49. People who rent or lease cars will see the tax increase from 1.5 percent to 2 percent of their rental/lease.
The legislature also raided $37.5 million from the Education Trust Fund (ETF) to assist the troubled SGF.
State Representative Tim Wadsworth (R from Winston County) explained; “HB30 being debated . Bill transfers $222,500,000 in use tax funds from Education Trust Fund to General Fund. Bill moves obligations of the Education Trust Fund which is about $185,000,000 to the General Fund. It results in a Net loss to the Education Trust Fund and a net gain to the General Fund of $37,500,000 -I VOTED NO. Bill passed.”
The tax proposals will have a more difficult time in the Senate.
State Senator Paul Bussman (R from Cullman) said, “Committee votes overwhelmingly to REJECTS my proposal to use rolling reserve funds to help support the general fund needs. Majority of committee is Republican – only one voted in favor. We will continue to have one part of government thriving and the other part will continue to suffer. In my opinion, the State will never be successful as long as we continue to allow haves and have nots. I will not support any new taxes and will actively fight to prevent my constituent from paying more taxes when the legislature is unwilling to make the tough decisions to correct the problems.”
Senator Paul L. Sanford (R from Huntsville) said, “My Scaled back Multi-State Lottery Bill (aka Powerball) did not make it out of committee today. Solutions are slim and far between in Montgomery. Please know I have offered two opportunities at solving General Fund Revenue problems on a long term basis:
1) Alabama Shared Revenue Fund (Sanford 78/22 Plan)
2) Alabama General Fund Lottery
Both have failed so now I will stop any taxes that come to the Senate.”