2003 CGS - AMROA

Alabama’s Tax Reform: What 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 to 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 NO 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 YES 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 YES 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 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 Opponents of Amendment 1? 22%22% Family NotNot ALFA NotNot Alabama Republican Party

2003 CGS - AMROA The Vote Was Not Heavily Influenced by: TV Ads Mass Mailings Church Groups Political Parties Social Groups

2003 CGS - AMROA 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? 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 For a Tax Initiative to Pass, 2 of 3 Undecided 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 9 th, Only 1 of 3 Undecided Voters Supported Amendment 1

2003 CGS - AMROA Tax Reform Must Be Tied to Education 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 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? – 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? – 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: 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: 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 About: Cutting State Agency Budgets. Ending State Support to the Arts. Ending Support for Private Schools and Universities

2003 CGS - AMROA Lesson 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 2 Alabama voters may support limited tax increases if linked to education.

2003 CGS - AMROA Lesson Learned 3 Alabama voters will not support tax increases without restoration of faith and confidence in Alabama government.

2003 CGS - AMROA Thank You Center for Governmental Services 2236 Haley Center Auburn University AL Tel. (334) Fax. (334)