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2003 CGS - AMROA
Alabama’s Tax Reform:Alabama’s Tax Reform:What Went Wrong and WhyWhat Went Wrong and Why
Dr. Jim Seroka, CGS – Auburn University
Alabama Municipal Revenue Officers Association
December 5, 2003
2003 CGS - AMROA
Tax Reform in Alabama Down Tax Reform in Alabama Down to a Resounding Defeatto a Resounding Defeat
Governor Riley Repudiated by His Own Party
Special Session Makes Dramatic Cuts in the State Budget
Two out of Three Alabamians Vote NO on Amendment 1 on September 9, 2003
2003 CGS - AMROA
Alabamians Who Voted Alabamians Who Voted NONO Were Strongly Influenced By:Were Strongly Influenced By:
68%68% - Opposition to the tax increase on cars & trucks
63%63% - Opposition to 100% market value state property assessment
61%61% -Governor wanting too much
56%56% - Low Trust in the Legislature
2003 CGS - AMROA
Alabamians Who Voted Alabamians Who Voted YES YES Were Strongly Influenced By:Were Strongly Influenced By:
66%66% - Possibility of Teacher Layoff
59%59% - The Unfairness of the Tax System
59%59% - The Performance-Based College Scholarship Fund
52%52% - Potential Closure of Senior Citizen Centers
2003 CGS - AMROA
Alabamians Who Voted Alabamians Who Voted YES YES Strongly Supported:Strongly Supported:
70%70% - Increase in the Child Exemption on State Income Tax
65%65% - Increase in Cigarette Tax
61%61% - Large Timber Companies Paying More in Property Tax
2003 CGS - AMROA
Who Influenced the Vote for Who Influenced the Vote for Supporters of Amendment 1?Supporters of Amendment 1?
• 48% 48% Alabama Education Association
• 36% 36% Governor Riley
• 23% 23% AARP
• 24% 24% Family
2003 CGS - AMROA
Who Influenced the Vote for Who Influenced the Vote for Opponents of Amendment 1?Opponents of Amendment 1?
• 22% 22% Family
• NotNot ALFA
• NotNot Alabama Republican Party
2003 CGS - AMROA
The Vote Was Not Heavily The Vote Was Not Heavily Influenced by:Influenced by:
• TV Ads
• Mass Mailings
• Church Groups
• Political Parties
• Social Groups
2003 CGS - AMROA
Who Opposed Amendment 1?Who Opposed Amendment 1?
• 75% 75% High School/ GED Education
• 72% 72% Household Income under $20,000
• 73% 73% Voters identified as Conservative
• 71% 71% Voters living in rural areas
2003 CGS - AMROA
Who Supported Amendment 1?Who Supported Amendment 1?
• 58% 58% Graduate or Professional Education
• 55% 55% African-American voters
• 51% 51% Voters with 10 – 20 Years in Alabama
• 50% 50% Labor Union Members
2003 CGS - AMROA
17%
34%
49%
Likely SupportOpposedUndecided
For a Tax Initiative to Pass, 2 of 3 For a Tax Initiative to Pass, 2 of 3 Undecided Voters Must SupportUndecided Voters Must Support
• 17%17% are likely to support tax increases
• 34%34% will probably never support tax increases
• 49% 49% could be persuaded.
2003 CGS - AMROA
On September 9On September 9thth, Only 1 of 3 , Only 1 of 3 Undecided Voters Supported Undecided Voters Supported Amendment 1Amendment 1
33%
67%
Support Oppose
2003 CGS - AMROA
Tax Reform Must Be Tied to Tax Reform Must Be Tied to Education to SucceedEducation to Succeed• 38%38% listed
improved education as the most critical issue that they supported
• 11%11% of all voters were critical that the tax package was not tied solely to education
2003 CGS - AMROA
Tax Reform Must Address Tax Reform Must Address Confidence in Government.Confidence in Government.• 31%31% did not see a
need for broad tax change
• 13%13% of all voters did not trust government
• 10% 10% did not understand the package
2003 CGS - AMROA
What Should We Cut? What Should We Cut? – The Voters Speak First Choice– The Voters Speak First Choice
• 27%27% Eliminate Waste.
• 14%14% Cut government salaries.
• 12%12% Throw out the bums.
• 4%4% Cut social welfare programs.
2003 CGS - AMROA
Where Do We Find the Money? Where Do We Find the Money? – The Voters Speak First Choice– The Voters Speak First Choice
• 25%25% Lottery
• 11%11% Alcohol and Tobacco
• 9%9% Property Tax
• 6% 6% Sales Tax
2003 CGS - AMROA
There is Strong Opposition To:There is Strong Opposition To:
• 68%68% Laying Off Teachers
• 54%54% Cutting Aid to Seniors/Children
• 50%50% Increasing State Sales Tax
2003 CGS - AMROA
The Public Strongly Supports:The Public Strongly Supports:
• 73% 73% - Increase in the Tax on Alcohol
• 64% 64% - Increase in the Tax on Cigarettes and Tobacco
• 63% 63% - Introduce a Lottery
2003 CGS - AMROA
The Public is Sharply Divided The Public is Sharply Divided About:About:
• Cutting State Agency Budgets.
• Ending State Support to the Arts.
• Ending Support for Private Schools and Universities
2003 CGS - AMROA
Lesson Learned 1Lesson Learned 1
• Alabama voters will not support tax increases if they are not linked to specific programs that people support.
2003 CGS - AMROA
Lesson Learned 2Lesson Learned 2
• Alabama voters may support limited tax increases if linked to education.
2003 CGS - AMROA
Lesson Learned 3Lesson Learned 3
• Alabama voters will not support tax increases without restoration of faith and confidence in Alabama government.