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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.

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.

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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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Crime

Seven inmates, seven workers test positive for COVID-19

Eddie Burkhalter

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The Alabama Department of Corrections on Tuesday said in a statement that seven more prison workers and seven additional inmates have tested positive for COVID-19. 

Four workers and one woman serving at the Julia Tutwiler Prison for Women all tested positive for coronavirus, according to an ADOC press release. There are 16 confirmed cases among staff at the facility. 

The woman serving at Tutwiler prison continues to be asymptomatic and was tested pre-operation for a scheduled surgery, according to the release, which states she has been moved to “medical isolation” and the dormitory where she was housed has been placed on on level-one quarantine, meaning inmates will be monitored for symptoms and have temperature checks twice daily. 

Other positive test results came back for a worker at Ventress Correctional Facility, another at the Alex City Community Based Facility and Community Work Center and one at the Birmingham Community Based Facility and Community Work Center, according to ADOC. 

Four inmates at the St. Clair Correctional Facility who also tested positive for COVID-19 were living in the same small area within the prison’s infirmary as an inmate who previously tested positive for the virus, according to the release. That living area remains on level-two quarantine, meaning inmates remain there for all daily activities, and the entire infirmary at St. Clair remains on level-one quarantine.

One inmate at the Kilby Correctional Facility and another at the Frank Lee Community Based Facility/Community Work Center also tested positive for  COVID-19. 

The man serving at Kilby prison was housed in the facility’s infirmary, and was transferred to a local hospital after showing symptoms of the virus, where he tested positive, according to ADOC. Kilby’s infirmary has been placed on level-one quarantine.

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The inmate at Frank Lee developed symptoms of COVID-19 and was taken to the Staton Correctional Facility to an area under level-two quarantine, where he subsequently tested positive, according to the department. He was then taken to medical isolation at Kilby prison,  and the facility was placed on level-one quarantine. 

There have been 68 confirmed cases among prison workers in the state, while 17 have since been cleared to return to work. 

Ten of the 19 confirmed COVID-19 cases among inmates remain active, according to ADOC. As of Monday the state has tested 176 of Alabama’s approximately 22,000 inmates, according to the department.

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News

State files lawsuit against Birmingham for removing Confederate monument

Chip Brownlee

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Alabama Attorney General Steve Marshall filed a new lawsuit against the city of Birmingham Tuesday for removing a Confederate monument in Linn Park.

Local officials in Alabama’s largest city, which has a majority black population, removed a 115-year-old Confederate Soldiers and Sailors monument in the city’s Linn Park after protestors and demonstrators vandalized it Sunday.

Birmingham Mayor Randall Woodfin ordered the monument removed during the waning hours of Jefferson Davis day Monday, a state holiday honoring the Confederate leader.

“This action is a very, very powerful symbol of our city’s desire to move beyond the pain of the past and uniting into the future,” Woodfin said Tuesday, adding that the city would not disclose the monument’s new location due to security concerns and to protect it from further vandalism.

The city paid $1 to remove the monument, Woodfin said, adding that the city council would need to vote on whether to accept public donations to pay off any fines imposed by the state for removing the monument.

One public fundraiser has raised more than $60,000 in a day to support the city in removing the monument.

The monument has been at the center of a years-long legal battle between Alabama’s majority-white, GOP-led Legislature and predominately black local officials in Birmingham.

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Marshall filing the lawsuit seeking the $25,000 fine, if imposed, would effectively end the legal showdown over the monument.

“In balancing between the costs of civil unrest versus the costs of a civil fine, I think most would agree with me: the city should pay the cost of that civil fine to make sure that there is not any more unrest in our city,” Woodfin said.

Marshall filed the lawsuit against Birmingham for violating the state’s Memorial Preservation Act, which prohibits the removal of historic monuments including Confederate monuments.

This is the second lawsuit filed by the Alabama attorney general against the city of Birmingham over the Linn Park monument.

The lawsuit seeks additional penalties after the city lost a similar lawsuit filed by the state in 2017.

The Memorial Preservation Act was passed in 2017 by the Alabama Legislature to protect architecturally significant buildings, memorial buildings, memorial streets and monuments located on public property for 40 or more years.

The law effectively prohibited municipalities from removing Confederate monuments.

“The State of Alabama first filed suit against the City of Birmingham in 2017 after the City erected barriers around the monument in Linn Park. In November 2019, the Alabama Supreme Court sided with the State and determined that the City of Birmingham had violated the law and was subject to the Act’s penalties. However, the Court held that any violation of the Act was punishable only by a one-time fine of $25,000 per violation,” Marshall said in a statement.

Woodfin, amid nationwide protests, demonstrations and unrest over the killing of George Floyd by a Minneapolis police officer, said he was willing to pay the fine to remove the monument, directing city workers to remove it Monday evening.

Legislation was filed in the 2020 session that would have amended the penalties provision of the act in response to the court’s ruling, but that legislation failed to become law.

“On Monday, I advised Mayor Woodfin that the removal of the 115-year-old Confederate Soldiers and Sailors monument in Birmingham’s Linn Park would violate the law and that I would fulfill my duty to enforce it,” Marshall said.

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Health

Third patient at state’s Mary Starke Harper Geriatric Psychiatric Center dies from COVID-19

Eddie Burkhalter

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A third patient at the state’s Mary Starke Harper Geriatric Psychiatric Center has died from COVID-19, the Alabama Department of Mental Health confirmed to APR on Tuesday. 

There remained 16 active coronavirus cases among patients at the state-run facility, said ADMH spokeswoman Malissa Valdes-Hubert in a message Tuesday.

Those patients are in various states of recovery, she said. 

Valdes-Hubert also confirmed that the members of the Alabama National Guard are to clean the facility on Thursday. 

Under the direction of Gov. Kay Ivey, the Alabama Department of Public Health and the Alabama Emergency Management Agency, members of the Alabama National Guard have since early April decontaminated and sanitized state nursing homes. Guard members also cleaned the Bill Nichols State Veterans Home, which had a serious outbreak of coronavirus, killing more than 20 residents and infecting more than 100. 

Valdes-Hubert said the department is in the process of planning for recovering patients and will release more information when available. 

There were no confirmed cases at ADMH’s two other facilities in Tuscaloosa, Bryce Hospital and the Taylor Hardin Secure Medical Facility as of Tuesday, Valdes-Hubert said.

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National

Sewell implores Alabamians “to speak out and demand change without violence”

Brandon Moseley

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Alabama U.S. Rep.Terri Sewell said that her heart aches for George Floyd and that anger should be directed not to violence but to action.

“The heroes of the Civil Rights Movement showed us it is possible to change history without damaging property and torching businesses that our community members depend on, so I implore all Alabamians to speak out and demand change without violence,” Sewell said. “We cannot let violence distract from the legitimate anger and frustration that we must channel toward action. I pray for both peace and justice.”

Sewell posted a video message Monday in response to protests across the country, which have at some points, turned violent and chaotic. On Sunday, several reporters were attacked in Birmingham, and some businesses were vandalized.

The representative’s video message comes after Birmingham Mayor Randall Woodfin and Montgomery Mayor Steven Reed also called peaceful demonstration. Birmingham implemented a curfew in response to the riotous demonstrations Sunday evening, but the city also removed a Confederate monument from Linn Park.

“To all those who feel marginalized because of the color of your skin: I see you and I hear you,” Sewell said. “Your pain and hopelessness is legitimate — since the founding of our nation, our criminal justice system has failed our black and brown communities. My heart aches for George Floyd, Ahmaud Arbery, Breonna Taylor and the countless others whose senseless deaths have not made the national news cycle.”

Sewell represents Alabama’s 7th Congressional District and is the only black member of Alabama’s congressional delegation.

“As a daughter of Selma, I myself have struggled to reconcile with the moment in which we continue to find ourselves, over and over,” Sewell said in the video statement. “The Foot Soldiers who came before us fought to create a better future, but every day we are reminded that that fight is far from over. They sacrificed their lives in pursuit of an America that lives up to its ideals – an America that we have not yet reached more than 55 years later.”

Sewell said the racism that causes pain can be seen plainly in police brutality and in the staggering health disparities black communities have endured before and during the COVID-19 pandemic.

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“It can be seen in thinly-veiled attempts to put African Americans in our place, holding on to and idolizing a time when our bodies were not our own,” she said. “And it can be seen in the state-sanctioned holidays and monuments that honor the leaders of the Confederacy, including today, ‘Jefferson Davis Day.’”

Sewell said she also knows that the vast majority of Americans across the country and in Birmingham are peacefully protesting for social justice.

“I wish I had all the answers and I could give us all the solutions we need,” Sewell concluded. “For now, I promise that I will work tirelessly to do absolutely everything within my power to bring peace and justice to our communities.”

“My Administration is fully committed that for George and his family, justice will be served,” President Donald Trump said on Monday. “He will not have died in vain. But we cannot allow the righteous cries of peaceful protesters to be drowned out by an angry mob.”

Floyd was killed while being arrested by the Minneapolis Police Department on suspicion of counterfeiting. The police officer who killed Floyd has been arrested and charged with third-degree murder and manslaughter. Activists say more widespread reform of policing and the criminal justice system needs to happen, and the other officers involved in Floyd’s homicide should also be charged.

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