In an innocent-enough attempt, a state senator from south Alabama wanted tax credits for an industry his constituents were recruiting. So he introduced a bill in the state Senate this year that would authorize the governor to approve the credits.
Meanwhile, senators from the Gulf Coast region introduced bills that would authorize tax credits or personal state income-tax deductions for homeowners who retrofitted residences against tornados, hurricanes and flooding.
Those bills passed the Senate, passed the House and were signed into law by the governor.
Those three bills also represent a time-honored and much-needed exercise of using taxing authority to create jobs and help people improve their homes.
The problem is that when a government — state, federal or otherwise — gives people a tax break, the government is, for the time being at least, reducing the amount of revenue that will come in for other needs.
In states where there is sufficient revenue collected, and which has a system where money can be easily be moved from one agency to another, bills such as these cause only a slight inconvenience.
But that’s not Alabama.
Here, the money lost through these tax credits and deductions — an estimated $80 million — is earmarked to go into the education budget. Education, whose funding has already been drastically cut, cannot afford to lose this revenue.
However, because Alabama earmarks so much of its budget, money cannot be moved from agencies where the loss would do less damage.
As one would expect, the Alabama Education Association is upset by this and has gone to court to stop the credits and deductions from being granted. But the AEA is not arguing that earmarking hurts education. The AEA is arguing that these are revenue bills, and since revenue bills must originate in the Alabama House, these Senate-originated bills are unconstitutional.
They probably are.
Either way the court rules, the real issue will not be addressed and Alabama will continue to raise too little revenue to support its schools. The state also will continue to earmark the money it collects so everyone gets a little piece of the little pie. That is how things are done in Alabama.
