2003 CGS - AMROA

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.

2003 CGS - AMROA

Thank YouThank You

Center for Governmental Services

2236 Haley Center

Auburn University AL 36849-5225

Tel. (334)844-4781 Fax. (334)844-1919

www.auburn.edu/cgs