MOBILE, Ala. — Alabama Gov. Robert Bentley told a group of state legislators and Mobile Area Chamber of Commerce members Monday that he is pursuing “bold” options to raise taxes in the coming year.
The governor estimates a $700 million shortfall in the state’s General Fund for the coming fiscal year—approximately $250 million required to balance the General Fund, and an additional $450 million needed to repay various rainy day funds the state has tapped in recent years.
To patch the hole, Gov. Bentley told reporters Monday he plans to propose dropping some tax deductions and “unequally paid taxes,” but conceded that his proposal will be a tax increase. “If we don’t fix the budget this time,” he said, “the changes to fix it in the long term are pretty slim.”
Bentley openly advocating for tax hikes is a relatively new development — he was elected twice on a platform of unreservedly opposing tax increases.
During a 2010 gubernatorial campaign debate, then-State Rep. Bentley unequivocally said “I am not for raising taxes,” citing tax hikes’ negative impact on businesses. “When you hurt businesses and you tax businesses, you’re going to lose jobs and we need to be creating jobs,” he said. He went a step further and signed Americans for Tax Reform’s “Taxpayer Protection Pledge,” committing himself in writing to opposing all tax increases. During his most recent campaign, Gov. Bentley’s re-election ads also prominently displayed the words “No New Taxes.”
A spokesperson for Gov. Bentley told Yellowhammer Alabama’s economic success under his leadership has pulled the state out of the recession, and he now believes the economy can handle what he’s preparing to propose.
“Alabama has dramatically improved from the recession that crippled our state a few years ago,” said Jennifer Ardis, the governor’s communications director. “The unemployment rate is the lowest it has been in six years, and we have continually seen salary and wage employment increase. On top of that, the Governor has recruited more than 63,000 new and future jobs for Alabama. He recognizes that there is still work to be done, but we are in a much better place today than after the recession hit.”
State Sen. Vivian Figures (D-Mobile) told AL.com Monday she is “very excited” about the prospect of tax reform, but “shocked” to see hear the governor’s proposal. “He doesn’t like to use the word taxes,” she noted.
Although Bentley has been open about his desire to raise taxes since winning re-election, details on his plan are still murky. Across the street from the Capitol, Republican legislative leaders — many of whom also ran on the promise of not raising taxes — are anxiously awaiting his proposal.
State Sen. Del Marsh (R-Anniston), the leader of the Alabama Senate, has been adamant in his opposition to tax increases.
“I’m not going to support any tax increase,” he said. “I look at this as a further opportunity to right-size government.”
“There’s a lot that needs to be done before you talk about raising taxes on working families,” State Senator and chairman of the General Fund Budget Committee Arthur Orr (R-Decatur) added to the Decatur Daily.
While Gov. Bentley can propose a budget, and the tax increases to pay for it, the Alabama Legislature is the body tasked with passing and implementing any appropriations.
Realizing that some of his proposals may be a tough sell to an increasingly conservative Legislature, Bentley has his sales pitch ready.
“I (helped) some of our Republicans win and I am counting on them to remember that and help me do those things we need to do to address the problems we need to address,” he said.
The legislature convenes for the 2015 session on March 3rd and will have 30 legislative days to come to an agreement on the budget.
Update: A previous version of this article incorrectly quoted State Sen. Figures.
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— Elizabeth BeShears (@LizEBeesh) January 21, 2015
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