Gov. Robert Bentley made a stop today in the Port City to promote his plan of increasing certain state taxes in hopes of accruing funds to cover a $700 million shortfall in the state’s general fund budget.
While laying out his plan, which is estimated to generate about $541 million in state revenue by increasing some taxes and closing tax loopholes, Bentley called Mobile, the last stop of his statewide tour, “the best place in Alabama” and received a mostly positive reaction at the Mobile Area Chamber of Commerce before an audience comprised of local city officials, legislative delegates, law enforcement and business associates.
The plan involves eight options, including a utility tax, a 4 percent increase on tax paid for automobile sales and a $1.25 increase per pack for the cigarette and tobacco tax. Further, the plan outlines a 4 percent tax increase for automobile rentals and removes tax credits for corporate income tax among others.
Bentley, who said he was “optimistic” with an 8-year plan, acknowledged the fact he pledged against tax increases during his first four years in office, but as he enters his second term this year, he compared his tenure to a football game and said there must be tax increases.
“We said we were going to streamline and make things more efficient, and that’s exactly what we did,” Bentley said of his first term. “Alright, now it’s halftime. When you go into halftime, you make adjustments … because you’re going to win it in the third and fourth quarter, and that’s what we’re going to do in Alabama.
“Once and for all, we’re going to solve this General Fund problem, and you cannot solve it unless you have more taxes. You can’t solve it unless you have more money,” he added.
State Sen. Vivian Davis-Figures (D-Mobile) publicly applauded Bentley’s “leadership and courage” and offered her support in finding ways to generate the needed funds and help alleviate the state’s debt.
“I think he has put some positive measures forth in terms of a tax fairness, or something that is going to be palatable. He’s gone to great links to try to put a package together that’s palatable, and right now he’s just going around the state to sell that package, so people know exactly what it consists of,” she told Lagniappe after the meeting.
However, Figures went on to say the plan “is not the silver bullet,” as the state “is definitely in dire need of more money.” She also noted ongoing issues with prison overcrowding and arguments against the expansion of Medicaid, which she said could ultimately bring in “billions of dollars.”
“I’m still hoping and praying that at some point in time, he will expand Medicaid because that is money we can certainly use,” she said.
Bentley also plans to remove $187 million in earmarks to address funding gaps.
“The state has been kicking the can down the road for all these years. We’ve had budget shortfalls for many, many years,” Figures said. “We still don’t adequately fund public education and we never have had enough money for the general funding with all of our responsibilities to the citizens of the state, so I think that he is showing courageous leadership at this time by pushing this package forward.”
While most remarks surrounding Bentley’s speech were positive, some voiced concerns related to local legislators who have signed no-tax pledges and must now decide what’s more important.
Guy Busby, director of the Baldwin County Legislative Office, said Bentley’s proposed tax increase plan puts some legislators in a difficult position, as they may have ran campaigns against such tax increases.
“They’ve got an obligation to work with the governor, but they’ve also got an obligation to their constituents,” he said.
State Sen. Bill Hightower (R-Mobile) echoed Busby’s concerns, saying he doesn’t believe the Republican Party as a whole will be completely receptive to Bentley’s plan.
“A lot of us have signed no new tax policies, and that makes it really difficult,” he said, noting his constituents would rather see the government shrink than have taxes raised.
Figures, on the other hand, said she never has and never will sign a no-tax policy.
“I will never sign one, and the reason is because you don’t know what you’re going to be faced with once you get into these seats,” she said. “And it’s easy to say but you don’t know what you’re going to be confronted with.”
As far as business owners in the Mobile area, Mobile Area Chamber of Commerce President and CEO Bill Sisson said Bentley’s plan has not yet been run through the chamber’s “process” of going before various committees and boards and believes the minimal response so far is due to lack of knowledge and understanding of the plan at this time.
“Today was the first time I think everybody heard his message,” he said. “ … It’s a wait and see sort of thing.”