Friday, September 22, 2023

The high price of Alabama’s low taxes

  Say this about Alabama’s attitude toward guns: It reveals lawmakers’ priorities.

  For instance: when faced last year with a choice between gun access and funding law enforcement, Republican legislators chose gun access. 

  This came from a bill that made concealed carry permits optional. There was no mass demand for this. But the National Rifle Association threw a ball, and GOP lawmakers chased it. 

  But here’s the problem. Pistol permits were a major source of revenue for Alabama sheriffs. Losing that created a funding problem, as the Alabama Sheriffs’ Association repeatedly pointed out before the bill's passage.

  Lawmakers tried to address that shortfall with a grant program, which doesn’t restore all the lost income. But as Ralph Chapoco reported in his series on fines and fees, they also quietly passed other bills creating or raising existing vehicle and court fees. 

  In two cases, lawmakers avoided bumping up fees. Instead, they authorized sheriffs to hold fundraisers to keep their departments going. 

  “I couldn’t tell you exactly how much I would like to raise or anything like that,” Autauga County Sheriff Mark Harrell told Chapoco. “It is just based on how well we do, or whatever idea we come up with. Anything is better than nothing.”

  Harrell requested the legislation, and you can’t blame him for looking for any way to keep his cruisers on the road. 

  But this is madness. 

  Legislators ostensibly pledged to law and order cut off a key funding source for law enforcement agencies and directed two sheriffs to hold fundraisers — most likely rodeos but nothing stopping bake sales — to fund a critical public service. 

  In many other cases, they shifted the burden from gun owners to car owners and people in the criminal justice system.

  It’s not a new way of running Alabama government. It’s not efficient. But it persists.

  Because it’s all about who pays. 

  In Alabama, a car is almost always a prerequisite for work. Wide swaths of the state are rural and mass transit is rarely an option. Levy any sort of fee on vehicles, and everyone — no matter their income — will have to pay that charge.

  If you end up in the criminal court system, you’ll get assessed a series of costs that you can’t escape. 

  This all burdens lower-income Alabamians. Taxing those least able to pay often means you’ll drive people into debt without ever fully collecting what you’re owed. Nor will it provide funds to deliver adequate services. Alabama has accumulated over $900 million in unpaid court debt since the late 1980s. 

  A fairer revenue system, which gets money from people who can actually pay, would ease the burden and stabilize government revenues. That looks like reasonable property assessments, progressive income tax rates and thresholds, and absolutely no levy on groceries.

  But a fair tax system would require the most powerful people in the state to shoulder some of the burden of governance. That would trigger a constitutional crisis for Alabama government, designed to shield the powerful from any duty to their fellow Alabamians.

  The state constitution, framed in part by wealthy planters, imposes severe caps on property taxes. 

  “The Alabama Constitution of 1901 was drafted primarily by the most influential people, who were large landowners and large industries, who did not want to pay property taxes on large land holdings,” Thomas Spencer, senior research associate with the Public Affairs Research Council of Alabama, told Chapoco. 

  Later amendments capped property assessments, driving down revenues still further and contributing to public school struggles. (Fundraisers may be new for Alabama sheriffs; they’re a way of life for state teachers.) 

  The state’s income tax, enacted in 1933, set a top rate of 5% for married couples making $6,000 or more. This was progressive for 1933: making $6,000 that year was equivalent to making about $140,000 today. 

  But despite Alabama’s best efforts, time marched on. And because the rates and thresholds were frozen into the amendment, inflation gradually undercut the intent of the law.

  Now, making $6,000 a year is, well, making $6,000 a year, way below the federal poverty level. Alabama has adjusted deductions to make up for this, but many other states save their highest tax rates for people making hundreds of thousands of dollars a year. 

  See a pattern here?

  Income and property taxes, properly applied, will fall heaviest on top-income earners, the ones most able to pay. The people Alabama government considers the weakest and most in need of protection.

  Fines and charges fall heaviest on those least able to pay. The people our government treats, figuratively and sometimes literally, as criminals who have far more income than they deserve.

  So Alabama’s local governments collect $567 per capita in property taxes. They collect $1,346 in fees and charges. 

  We are a low-tax state. But we still pay. Because the cost of government is only low for the most well-heeled among us. 

  Lifting property tax caps and adjusting income tax rates won’t happen any time soon. Heck, we allow people to write their federal income tax payments off their state taxes, which favors the wealthy even more. 

  But doing so wouldn’t just ease the burden on the poorest. It would be a far more consistent and reliable source of revenue for the state. It’s far easier to collect money from people who can pay than people who can’t. 

  And it just might relieve schools — and sheriffs — of the need to pay for critical services through bake sales. 


  About the author: Brian Lyman is the editor of Alabama Reflector. He has covered Alabama politics since 2006 and worked at the Montgomery Advertiser, the Press-Register, and The Anniston Star. His work has won awards from the Associated Press Managing Editors, the Alabama Press Association, and the Robert F. Kennedy Center for Human Rights.


  This article was published by Alabama Reflector.

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