5 months ago

Taxes, roads and limited government

The Alabama legislature kicked off its new term with a special session to increase the gas tax, a result which seemed foreordained. Nonetheless, the gas tax raises interesting economic and political considerations.

Our gas tax is currently just under 21 cents a gallon, which ranks 41st nationally according to the Tax Foundation, or 36th if we adjust for state hourly wages. Pennsylvania has the highest gas tax at nearly 59 cents a gallon, and eight other states have taxes in excess of 40 cents. The proposed 10 cent increase over three years would put our tax 23rd, 17th when adjusted for income.

Over eighty percent of Alabama’s tax revenues are earmarked for specific purposes, the most of any state. The gas tax is dedicated for highways, so the new revenues should go to road improvements. Revenue sharing will allow counties to repair their roads as well.

Alabama has many roads and bridges needing repairs. According to the Federal Highway Administration, we had 1,200 structurally deficient bridges at the end of 2017. I can’t say exactly what this means, but structurally deficient doesn’t sound like a compliment.

An earmarked gas tax functions as a user fee, which implements the “benefit principle” of taxation. Citizens who benefit the most from roads will pay a larger share of the cost of repairs. The Tax Foundation, which generally opposes taxes, likes gas taxes: “Because they adhere to the benefit principle, gas taxes … are the revenue tools most suitable for generating the funds needed to maintain and repair public roads over time.”

Unfortunately, lower-income families spend relatively more on gas, making the gas tax regressive. This means that lower-income households pay a higher percentage of income in taxes. The gas tax does poorly on the ability to pay principle of taxation. This would not be as problematic if Alabama did not rely on regressive sales taxes for so much state and local tax revenue.

The failure to invest adequately in roads costs our state and nation. Twenty one percent of highways nationally have poor pavement condition, which costs Americans $120 billion annually in added repair costs, or over $500 per driver. Traffic congestion costs Americans another $160 billion in lost time and wasted gas. Forty percent of urban interstate highways are congested. Congestion is arguably due to a failure to expand road capacity.

Despite our low gas tax, Alabama’s roads and bridges are not, relatively speaking, in poor shape. Seven percent of our bridges are structurally deficient, which ranks 30th among states, and only two percent of our highways have poor pavement condition.

Is a tax increase truly necessary to maintain our roads? The general wastefulness of government, like the Pentagon spending $4.6 million in lobster and crab in one month for military contractors, probably gives many Alabamians pause. If Washington, Montgomery, and our cities and counties spent our tax dollars wisely, they’d probably have enough money to fix our roads.

While we should never tolerate government waste, waste is unavoidable because costs are very hard to assess. We also place many legal requirements on government contractors, increasing costs. Government waste does not change the reality that road maintenance requires resources. If we wait to eliminate all government waste before approving new taxes, our bridges and roads will likely have crumbled.

Unwillingness to pay taxes can lead states to seek alternative revenues. You’ve probably seen signs along roads warning of damaged guardrails. Tennessee bills drivers who damage guardrails in accidents to avoid spending tax dollars. This policy led to the family of a teenage girl killed in 2016 when her car hit a median guardrail being billed $3,000 for repairs. We may not like taxes, but alternatives can be more offensive.

Alabama has some of the lowest state and local taxes, so perhaps we shouldn’t complain about the gas tax hike. I would suggest that fiscal conservatives must also ask government to do less for us. Limited government does not mean big government on the cheap.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

13 hours ago

Birmingham’s new Sidewalk Film Center and Cinema is ready for its premiere

The new, permanent home of Birmingham’s Sidewalk Film Festival will open its doors this weekend, just in time for this year’s event.

Chloe Cook, executive director of the Sidewalk Film Festival, said the 11,500 square-foot facility is not complete, but is far enough along to be used as a festival venue this weekend.

“After the festival we will go dark for a week,” Cook said. “Then we will have a soft opening Labor Day weekend before our grand opening September 13-15. We’re very excited.”

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Sidewalk Film Center and Cinema a dream come true from Alabama NewsCenter on Vimeo.

The cinema, located in the basement of the Pizitz building on 2nd Avenue North, features two 89-seat theaters and an education room for special events. Outside of the festival week, it will function very much like a typical movie theater, operating seven days a week on a year-round basis, screening the latest independent feature films on one of two screens.

“We’re excited to have something slightly larger than a jewel-box movie theater, but not a huge multiplex-type facility where we can carefully curate the programming for our community,” Cook said. “When I took the job in 2009 I did not imagine this would come to fruition. I really think a lot of redevelopment in the north side of downtown Birmingham has happened around our annual festival and it continued happening to the point that we felt like the timing was right to pursue this project and fill that cultural void.”

Cook said the $4.9 million facility would not have happened without the generous support of a variety of contributors.

“We have been so fortunate to receive generous support from our corporate community, including Alabama Power (Foundation)Regions BankBlue Cross Blue Shield of Alabama, as well as our foundation community,” Cook said. “We’ve seen support from the Hugh Kaul Foundation, The Stephens Foundation, The Daniel Foundation, but we’ve also seen a lot of individuals who are not people who could start a foundation but they can send in a check for $250 or $25. That’s been really rewarding.”

To learn more about the Sidewalk Film Center and Cinema, visit MakeMovieMagic.com. To learn more about the Sidewalk Film Festival, visit SidewalkFest.com.

(Courtesy of Alabama NewsCenter)

SchoolFest sets the stage for Alabama children

The following is the latest installment of the Alabama Power Foundation’s annual report, highlighting the people and groups spreading good across Alabama with the foundation’s support.

 

Plato said art imitates life. Oscar Wilde said it was the other way around. It’s an argument that continues. However, one art form brings us face to face with the connection between art and life, perhaps better than any other: theater. It’s here people act out stories, hoping their audience forgets for a moment that it’s all make-believe. Were it not for the SchoolFest program of the Alabama Shakespeare Festival (ASF), many Alabama children might never be exposed to the magic of theater.

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Every year, 40,000 students attend SchoolFest in Montgomery. From the professional actors to the costume and set design, the productions are the same as those presented to other ASF audiences. Thanks to grants from the Alabama Power Foundation and others, ticket prices are discounted and many schools attend for free, exposing students from all walks of life to art.

For some, it’s an experience they’ll never forget. For others, like Emily Prim, it’s life-changing. Prim is assistant wardrobe supervisor at ASF. She remembers distinctly when the “theater bug” bit her. “I was in seventh grade at St. James School in Montgomery. We had a field trip to SchoolFest, where we saw ‘James and the Giant Peach.’ I remember it so well, because there was a Ferris wheel on stage that was the peach, and I thought that was so cool. I was sorta thinking about theater, because of shows we had done in school and stuff, but when I came to see ‘James’ here, it made me start thinking that this is something I could do after I graduate,” Prim said.

Prim’s experience is what ASF is all about. Executive Director Todd Schmidt put it this way: “It’s really a bedrock of our mission at ASF, which is to create communities through transformative theatrical experiences. It’s a lot of kids’ first introduction to theater. It’s important to do that, especially in this time of continued cuts in arts funding.”

Shakespeare Festival’s SchoolFest puts the arts at center stage for Alabama students from Alabama NewsCenter on Vimeo.

Just in the past year, students have seen productions of “The Sound of Music,” “Romeo and Juliet,” “Our Town,” “Steel Magnolias” and “Four Little Girls: Birmingham 1963.” The latter featured 24 students from Montgomery Public Schools in the cast. Schmidt chooses shows that are appropriate for audiences of all ages. SchoolFest builds many of these productions around school curricula.

“We put our programming out to schools, and then they select what they think is relevant to what they’re doing and what they want their kids to be exposed to,” Schmidt said.

What started decades ago as productions appropriate for students has continued to expand. In addition to SchoolFest, ASF offers educational programs. There are theater classes for adults and children, and summer theater camps for students. ASF has hosted a series of conversations that are tied – at least in part – to the shows. U.S. Rep. Terri Sewell spoke alongside a cast member from “Four Little Girls: Birmingham 1963.”

“These are not about our productions, but they focus on themes of the productions,” Schmidt said. “There’s one coming up that talks about women dealing with glass ceilings, working in fields normally dominated by men, which ties somewhat into the production of ‘Steel Magnolias’ and a new production, ‘Into the Breeches.’”

Lonny Harrison, director of theater at St. James School in Montgomery, has been bringing students to see productions at ASF for 21 years. “We have some students who, up to the point they’ve hit SchoolFest, have never seen a live production outside of a school play. This definitely helps get them more into the arts.

It seems like kids respond differently to every show, but whether it’s something that’s the most amazing thing to them, or something that makes them think more critically, it at least makes them think about it. When we left ‘Romeo and Juliet’ the other day, kids were saying, ‘Let’s do some Shakespeare!’ I had to tell them, ‘Small steps.’”

Harrison has a long history with SchoolFest. He saw stage productions at ASF when he was in school. His experience echoes that of many Alabamians. Were you to poll the state, you’d likely be amazed at the number of people of all ages who’ve shared the marvel of live performance in a theater at the Alabama Shakespeare Festival.

In Alabama, it’s a generational thing. When it comes to the art imitating life vs. life imitating art question, perhaps Shakespeare got it right when, in the second act of “As You Like It,” the character Jaques said, “All the world’s a stage and all the men and women merely players. They have their exits and their entrances, and one man in his time plays many parts.”

The parts being played by the men and women of the Alabama Shakespeare Festival are a rich and vital service to the people of our state. These are the people who transform our children, who show them a new and lively way to understand stories, and life – its comedies and tragedies. These are the “players” who expand the minds of our young people, and show them a world that lives within their own ability to imagine.

For more information on the Alabama Power Foundation and its annual report, visit here.

(Courtesy of Alabama NewsCenter)

17 hours ago

Aderholt’s advice for Alabama’s 2020 U.S. Senate candidates: ‘Make it very clear that they’re supportive of the president’

Although it is still the early going of the 2020 U.S. Senate Republican primary election campaign, U.S. Rep. Robert Aderholt (R-Haleyville) has some advice for the handful of candidates seeking the GOP nod.

When asked what he saw as important to him and his constituents in Alabama’s fourth congressional district, he said it was support for President Donald Trump.

In the 2016 presidential election, Trump dominated Aderholt’s district by winning more than 80% of the vote and was the only district in the country to break the 80% threshold.

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“They’ve clearly got to make sure that they make it very clear that they’re supportive of the president,” Aderholt said. “I mean, this president has as much support of any since I have been in office. I have never seen a president that has the support this president has. He has, everywhere I go, people are very optimistic that they are very positive about what he is doing. And they’re optimistic about the future. So I would first of all — they need to let their constituents, future constituents that are voters, know that they’re someone who would stand with the president.”

“As someone who is in another branch of government, we always want to make sure we don’t do just exactly like the executive or the president wants to do regardless of who it is,” he continued. “The Founding Fathers wanted the different branches to be a watchdog on each other. But, as I have seen from this president, the things that he is doing is consistent with what the voters want and what has been good for America. I’m fully supportive of this president. I think they need to communicate they’re supporting the president. I think that is probably the biggest thing right now. Alabama is a very pro-life state, and I think they need to communicate that, which again is consistent with the president’s message.”

Aderholt also suggested the Senate candidates should be supportive of Trump’s efforts to renegotiate NAFTA.

“I am also getting the feedback that the Mexican-Canadian trade agreement that the president is trying to negotiate — to redo NAFTA, people are very supportive of that,” Aderholt added. “But again, the president has been very supportive of these issues. What the president is doing, I’m very supportive of. I don’t see any issue as far as supporting what the president’s issue is.”

@Jeff_Poor is a graduate of Auburn University, the editor of Breitbart TV and host of “The Jeff Poor Show” from 2-5 p.m. on WVNN in Huntsville.

18 hours ago

Georgia-based Colonial sues contractor over Alabama spill

Georgia-based Colonial Pipeline Co. has sued an Alabama contractor over a spill that threatened gasoline supplies along the East Coast three years ago.

The pipeline operator contends faulty work by the Birmingham-based Ceco Pipeline Services caused a crack that spilled at least 250,000 gallons of gasoline in rural Shelby County in September 2016.

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The spill shut down a major pipeline for weeks, tightening gasoline supplies along the Eastern Seaboard.

The pipeline carries fuel from Houston to metropolitan New York.

With headquarters near Atlanta in Alpharetta, Colonial Pipeline filed the federal lawsuit Friday seeking an unspecified amount of money.

Ceco Pipeline Services has not filed a response in court, and general manager Luke Hotze declined comment Monday, citing the lawsuit.

Hired to replace coatings that protect the pipeline’s exterior, the contractor failed to adequately replace dirt around the pipeline after maintenance work, the suit said.

The failure left a void beneath the pipe, which bent as it sagged.

The bend caused cracks that led to the breach, according to the suit.

The failure cost Colonial Pipeline lost income, plus money spent on repairs and cleanup, the lawsuit said without specifying an amount.

The lawsuit said Colonial Pipeline transports an average of 100 million gallons (378 million liters) of refined petroleum products daily through a system that includes more than 5,500 miles (8,850 kilometers) of pipeline.
(Associated Press, copyright 2019)

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18 hours ago

‘School choice’ also means ‘tax choice’ in Alabama

It’s back-to-school season and for some parents, this is a happy time.

But for those whose children are stuck in underperforming schools, or schools where they are bullied or are in danger, this is a heartbreaking time, especially if they cannot afford to move or go to private school.

“There was fighting every day. People wanted to shoot me, kill me, and everything,” said Calvin Coleman in a speech about his experiences at his Mobile public high school.

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Did you know that you, or your company, can help students like Calvin by donating a portion of what you already owe in state income taxes to a program that funds scholarships for low-income families in Alabama?

“When my son Carlos was in the fifth grade, he was constantly bullied and I wanted to desperately put him into a private school,” wrote Nyenya Webster of Montgomery in Alabama Daily News. Every day was a struggle, she added. “I was at a loss as to what to do to help my son.”

Then Webster learned about the tax-credit scholarship program created in 2013 by the Alabama Accountability Act that serves roughly 4,000 low-income, mostly minority Alabama students.

She applied, and Carlos received a scholarship to attend Success Unlimited Academy in Montgomery.

“Success Unlimited has been a lifesaver for my son,” Webster wrote. “He … is now considering college. My son never talked about going to college before Success.”

For those who want to help other Alabama families break the cycle of poverty through education, it’s a no-brainer.

“For a donor, it doesn’t cost them anything,” said Warren Callaway, executive director of Scholarships For Kids, one of the scholarship granting organizations funded by the program.

That’s because a tax credit is different from a charitable contribution. When you make a charitable contribution to a non-profit organization, you deduct a portion of that on your income tax. However, a tax credit allows you to take a dollar for dollar reduction in your state income tax.

“Basically, donors are redirecting some of their state income tax liability to a [scholarship granting organization],” Callaway said. “So, if you give $100 to us, you can reduce your state income tax by $100.”

Who benefits from the donation?

“The average household income for these students is under $30,000 so these are families that would have no other way of choosing the school that is best for their child,” said Ryan Cantrell, director of state strategy and political affairs for the American Federation for Children, during an interview of the 1819 podcast.

Higher-income families have always had school choice, Cantrell said, but “it’s the low-income families who get stuck with no options in under-performing schools or schools that don’t work for their child.”

There are $30 million in tax credits available and, so far, only about a third have been claimed, according to the Department of Revenue’s My Alabama Taxes website.

Here’s how you can reserve your tax credit before the December 31, 2019, deadline:

Step 1: Estimate how much income tax you or your business will owe Alabama next year by checking how much you paid last year. Individuals and corporations can donate up to 50 percent of their tax bill, and while individuals are limited to $50,000, corporations are unlimited.

Step 2: Visit the My Alabama Taxes website and follow instructions for reserving an Alabama Accountability Act tax credit.

Step 3: Send a check to one of the seven scholarship granting organizations in Alabama within 30 days.

Step 4: When you do your taxes next year, fill out an Alabama Department of Revenue Schedule AATC form to reduce your income tax bill by the amount you donated.

For more help, individuals may call the Alabama Department of Revenue at 334-353-0602 or 334-353-9770, and corporations may call 334-242-1200.

You’re already going to have to write a check for your state income taxes. Why not control where some of that money goes, especially when it has the power to change lives?

“It was a relief that nobody would understand,” said mother-of-five Alleane West in an Alabama Opportunity Scholarship video about the program’s impact on her family. “You know, you’re a single mom with boys trying to not make them a statistic.”

Watch:

Rachel Blackmon Bryars is a senior fellow at the Alabama Policy Institute. Connect with her at rachel@alabamapolicy.org or on Instagram @RachelBlackmonBryars.