By 68% to 32%, Alabama voters on September 9 soundly rejected Republican Gov. Bob Riley’s referendum to hike state taxes by $1.2 billion.
Using the slogan “Let’s Do the Right Thing,” Riley tried to rally support for the constitutionally mandated referendum (only the voters can approve changes in Alabama’s tax code). He argued the tax hike was needed to fund programs for the poor and close the state’s $685-million budget shortfall. He also hoped to use the expected revenue to increase funding for existing and new education programs, including a program to pay for college tuition for Alabama high school students who maintain at least a “B” average.
In stumping for his plan, Riley repeatedly pointed out that lower-income earners would have actually received an income tax cut from the plan, which would have raised the threshold for paying the tax from $4,600 to $17,000.
But conservatives argued that the tax hike would hurt the economy and kill those lower earners’ jobs. Moreover, the poor would have been subjected to the expanded sales taxes, service taxes, property taxes, and tobacco taxes contained in Riley’s plan.
A staunch conservative throughout his six years in Congress (lifetime ACU rating: 97%), Riley was still speaking out against higher taxes as recently as his State of the State Address March 4.
But beginning in April, he abandoned the views that won him the Taxpayer Hero award from Americans for Tax Reform (ATR). He began invoking the state deficit, Alabama’s low-ranking public education system, and even divine law as justification for a tax hike.
“According to our Christian ethics, we’re supposed to love God, love each other and help take care of the poor,” said Riley, a Southern Baptist, while trying to sell voters on the tax-hike.
Opponents countered that excessive spending caused the state deficit. A Cato Institute study showed that Alabama increased its inflation-adjusted per capita spending by 39% between 1991 and 2000.
Riley’s reversal on taxes prompted two of his cabinet members to resign. Many grassroots volunteers who helped him win election worked to defeat his referendum.
Former House Majority Leader Dick Armey (R.-Tex.), who worked with Riley in Congress, opposed the tax referendum as co-chairman of Citizens for a Sound Economy.
Armey told HUMAN EVENTS that Riley’s reversal was baffling. “I campaigned for him for his congressional seat for three terms,” Armey said of Riley. “He was in the House for six years, and I don’t remember Bob Riley ever hinting that he might be inclined to raise taxes.”
Riley may have been swayed, however, by the powerful influence of the Alabama Education Association (AEA), a teachers’ union. Armey suggested that Riley, feeling the heat from his close election, was trying to buy peace from the politically powerful union with new education funding.
But AEA Executive Secretary Paul Hubbert denied any such deal. “Riley signed on before I became involved,” Hubbert told HUMAN EVENTS by e-mail. He denied that his union had made any promises of support for Riley, and added that the strong “no” vote would have “disasterous (sic) results to public education in Alabama.” Riley’s spokesman also denied that such a deal had been made.
Refused Tax Pledge
Campaigning for governor, Riley never called for a tax hike, but refused to sign ATR’s pledge not to raise taxes. The pledge commits a politician to “oppose and vote against any and all efforts to increase taxes.”
Republican Governors Kenny Guinn (Nev.), Sonny Perdue (Ga.), Don Sundquist (Tenn.), and Mike Huckabee (Ark.)-all of whom refused to take the ATR pledge before their last elections-all tried to raise taxes (or succeeded in doing so) after they won election.
Two current Republican gubernatorial candidates-Arnold Schwarzenegger (Calif.) and Ernie Fletcher (Ky.)-have also refused to sign the no-tax pledge.
Armey said that by angering taxpayers in conservative Alabama, Riley may have brought an end to his otherwise stellar career. “You never win by giving up the friends you have for the friends you think you’re going to get,” said Armey. “He’s upset his base all over the place.”