Governors Reflect On Alabama Tax Plan’s Rejection

When Alabama voters decisively rejected Gov. Bob Riley’s (R) tax and education plan two weeks ago, many analysts said the loss would have a chilling effect on other states considering tax increases.

But some governors gathered here for the Southern Governors Association’s (SGA) annual meeting said that conclusion is misleading because states differ greatly in how they perceive taxes and government services.

“I am not sure that whole impact is transferable to other states because the dynamic in other states is different — what people are willing to pay for, what they perceive as right and wrong,” Arkansas Gov. Mike Huckabee (R) said.

Huckabee, who is pushing for a 1-cent sales tax increase to more equitably fund schools, said Arkansans will support revenue increases if they are connected to particular programs.

“Arkansas people have a history — if they believe that you’re really going to spend the money on teacher salaries, education or health care for poor — of supporting tax increases,” he said.

Huckabee cited approval in a 1996 referendum of a one-eighth cent sales tax increase for natural resources. Voters knew how we were going to spend the money,” he said.

Defeat of Riley’s plan kept him from attending the SGA meeting because it left his state with a $675 million deficit. His plan would have raised enough revenue to close this gap while cutting taxes on the poor and creating new education programs.

Riley and state legislators are currently trying to agree on cuts to bring the budget into balance.

Riley’s concerns — revenue shortfalls and improving education — were front and center at the meeting’s opening day.

The keynote speaker, former West Virginia Gov. Gaston Caperton (D), stressed the importance of expanding access to higher education.

Caperton, who now heads the College Board, which administers the Scholastic Aptitude Test (SAT), said he admires Riley for risking his political neck to help his state accomplish this goal.

“He (Riley) is a Republican and I’m a Democrat. But I’m a great admirer of his because he defined what the problem was in Alabama and he was courageous enough to ask voters to raise taxes so they can give students the opportunities they need to succeed,” Caperton said.

The meeting’s host, West Virginia Gov. Bob Wise (D), said he hopes the deep cuts Alabama lawmakers are currently weighing will cause the state to reconsider some of Rileys revenue suggestions next year.

Having visited Alabama before the referendum, Wise said he was awed by the complexity of what the state’s voters were asked to consider and that this may have contributed to the plan’s defeat.

Kentucky Gov. Paul Patton (D) said the complexity of plans like Riley’s is one reason he opposes all popular votes on policy proposals.

“When people vote on one isolated part of government, it just doesn’t work. Public policy decisions need to be made in the context of both sides – what you don’t get in services if you don’t get the tax increase,” he said.