Mobile County Landowners Association Board of Directors

Position Statement: Governor Riley’s Tax Increase Proposal

Currently, there are two conflicting points of view being put forward in Alabama concerning taxes. President Bush believes that the government should lessen the tax burden on its citizens. Governor Riley, however, believes that the government should increase the tax burden.

President Bush’s position, that it is in the best interest of the people of Alabama and the United States for the government to lessen the tax burden on its citizens, has recently been endorsed by the Congress of the United States. The Congress and the President have agreed that letting people keep and spend more of their money will improve the economy, create jobs, and generate additional revenue for the government.

Governor Riley has adopted a position directly opposed to that of the President. Riley’s position is that it is time to increase the tax burden on the people of Alabama to the tune of an additional $1.2 billion in taxes. According to the U.S. Census Bureau, during the ten-year period from 1992 to 2001, total revenue for the state of Alabama increased from $10.5 billion to $17.9 billion. This is an astonishing increase of $7.4 billion or 70%. According to the U.S. Department of Commerce, per capita personal income in Alabama increased by only 40% during the same time period. Thus, state government had a 70% increase in income, while individuals had only a 40% increase in income. Alabama’s $17.9 billion in revenue ranked 23rd among the states in terms of total revenue. Alabama ranked above Louisiana, Tennessee, South Carolina, Oklahoma, Mississippi, Arkansas, and 21 other states. (For example, Arkansas, ranked at 31, had total revenue of $10.3 billion.) However, in terms of per capita personal income, Alabama ranked 43rd, above only seven states. Thus, while the income of the people of Alabama ranked 43rd, the income of the state of Alabama ranked 23rd.

When Governor Riley proposed the largest tax increase in the history of Alabama, he compared himself to President Reagan when Reagan became governor of California. Now, according to the U.S. Census Bureau, California currently ranks first in total revenue, however, they also rank first in debt owed. Today, California is in serious financial trouble, and there is a grassroots movement to recall the governor. Heavy taxation on the citizens of California has not led to the utopia that many predicted. Is a state on the brink of bankruptcy the financial model our governor feels that Alabama needs to emulate? Could it be, that instead of attempting to move the state’s income up from 23rd to perhaps 19th or 20th with a $1.2 billion tax increase, Governor Riley should be working to move the people’s income up from 43rd to 39th or 40th or perhaps even to a lofty 23rd, which is where the state’s income is ranked? Since a percentage of everyone’s income is paid to the state in taxes, as the people’s income increases so does the state’s income. Perhaps, the best way for the state to get an additional $1.2 billion is for the people to make more money, which is what the President believes.

The MCLA Board strongly believes that President Bush’s position is the reasonable and correct position and strongly supports the President’s efforts to reduce the tax burden on the people of Alabama. If other states follow the lead of Governor Riley, the President’s tax cut and his efforts to improve the economy will be totally negated. Now is not the time for Alabama to increase the tax burden on its citizens and undermine President Bush’s efforts to improve the economy. We urge the people of Alabama to support the President and give his plan a chance to work.