But governor wants issue excluded as lawmakers debate what
could be the largest tax increase ever

05/14/03

MONTGOMERY -- Gov. Bob Riley doesn't want gambling money as part of the solution to Alabama's crippling fiscal crisis, according to his aides and documents listing topics the administration might submit in a special session expected to start Monday.

But some legislators Tuesday called that view irresponsible as Riley, a Republican, prepares to introduce a package that most expect would raise as much as $1.2 billion in taxes -- to include, among others, property and income levies -- and institute a number of government accountability measures.

"The governor has said repeatedly 'everything is on the table,' and I'm going to hold him to his word," said Rep. John Knight, a Montgomery Democrat who chairs the House General Fund budget committee. "I don't think the executive branch should limit the legislative branch and how it should increase revenue."

Knight is already pushing a regular session bill that would allow video gaming at Alabama's four existing dog tracks, in cluding one in Mobile. He said he would wait to see the governor's proposals, which legislators expect to receive in detail as early as today, before deciding whether to introduce such a bill in the special session.

Riley's efforts come amid a $600 million shortfall, more than 10 percent of the state's primary budgets.

The governor continued to keep details of his plan under wraps Tuesday, though he told reporters he intends to introduce about 30 bills that he wants bound into one statewide vote -- making it effectively an all-or-nothing deal -- later this year, probably in early September.

David Azbell, Riley's press secretary, said the governor would address the state Monday night during a live broadcast, though he could not say when the speech would begin or whether it would be delivered as part of a joint session of the Legislature.

Another lawmaker, meanwhile, said Tuesday that he would introduce during the special session a constitutional amendment to repeal the state's ban on lotteries. Under an Alabama Supreme Court ruling, the prohibition also applies to casino gambling.

"This ban is just taking money out of Alabama, because we are surrounded by gambling states," said Rep. John Rogers, a Birmingham Dem ocrat who has long pushed for casinos and a state-sponsored lottery.

"The governor's talking about taxing people, and this is just voluntary taxation," Rogers said.

Like any major changes to property or income tax, repealing the gambling ban would have to clear the Legislature and face a statewide vote of the people.

Legislators circulated an administration document around the State House Tuesday listing what the governor might include in his official call for a special session, which is legally required before such a session can start.

Below 20 general topics -- seven related to taxes, 12 to government accountability and one to a college scholarship program -- appeared this notation: "This call does not include revenue raised by any measure regarding gambling or gaming, and furthermore any such measure will be specifically prohibited in this call."

Under state law, lawmakers in special session cannot consider anything not included in the governor's call without first taking a two-thirds vote in both houses. The law, however, does not allow the governor to prevent legislators from casting any such vote to take up other proposals.

Azbell explained Tuesday evening that the governor simply wants to spell out that the two-thirds vote would be required. Some lawmakers have argued in the past that gambling legislation fits generally in the category of "revenue measures." Under that classification, Rogers explained Tuesday, lawmakers conceivably could try to bring up gambling measures without the two-thirds vote if the governor listed other "revenue measures" in his call.

In his only public appearance of the day, Riley continued his effort to sell what would be the largest tax increase in Alabama history, a prospect that some local Republican leaders have already decried.

"I'm not going to ask you to have the largest tax increase in history, and end up with essentially the same programs we have today," he told a group of women touring the Capitol. "If I can't convince you of the legitimacy and credibility of every proposal that we're about to make, then it will never happen."

The governor said he is continuing to vet his proposals with lawmakers and lobbyists.

Riley told reporters one aspect of the plan would address the goal of raising reading scores to the best in the nation.

State Superintendent of Education Ed Richardson said Riley asked him if it could be done, and he gave the governor a list of what would be needed to get there. Richardson's list, which included full funding of the Alabama Reading Initiative for grades K-8 statewide, carries a price tag of $185 million.

Among other proposals lawmakers and lobbyists have said could be in the package are:

Some increase in the state property tax rate, currently 6.5 mills, which amounts to $65 per year on a $100,000 home.

A boost in some individual income tax rates, which now are set at essentially a flat 5 percent, combined with increases in deductions and exemptions that would ease the tax burden on lower-income citizens.

Reduction or elimination of some exemptions from the 4 percent state sales tax, including exemptions on automobile purchases, farm equipment and legal services.

Changes to the current system of "earmarking," which legally binds certain tax revenue to specific uses. Riley has assailed the practice as a shackle on legislators and state money managers who are unable to make budget priorities and shift money among accounts, particularly in lean times.

An increase in the time necessary for public employees to serve in order to qualify for retirement benefits.

A full-time state auditor to work in each of the larger public school systems.

Inclusion of binding arbitration in the procedure for firing tenured teachers.

Riley repeated his insistence Tuesday that new revenue not be "earmarked," or legally directed to be spent in a certain way.

The administration and the Alabama Education Association, the state's largest teachers union, had haggled over the governor's insistence on eliminating earmarking.

During the gubernatorial campaign, Riley agreed he would not try to un-earmark monies already dedicated to the Education Trust Fund, the state's operating budget that supports K-12 schools and two- and four-year colleges. The General Fund supports most other state agencies.

Senate President Pro Tem Lowell Barron, D-Fyffe, said the governor wants to create a third account where any money raised from his proposals would go. The Legislature could then appropriate that money wherever it sees fit.

One item may open the door for Baldwin County lawmakers to introduce their plan to rewrite the state's equity funding program for schools, which is designed to narrow the gap between rich and poor school systems.

Sen. Bradley Byrne, R-Montrose, said he would file it during the special session if he could, noting that the proposal would benefit systems around the state.