National & International

Metro & State

| Anytown, Ala. -- It's pretty safe to say that there are plenty of people in Alabama who don't know much more about Amendment One than what they've heard in soundbites on the evening news and the advertisements that have been plastered all over TV and radio lately.

So � how do you sort out the numbers?

The plan will impact each Alabama family differently, but we thought one constructive way to examine it is through the finances of the Joneses� a mythical family that represents the average Alabamian, according to U-S census data. There's Mr. Jones, his wife Mrs. Jones, and their daughter Jill Jones.

Okay � the census figures show the average number of persons per household in Alabama in 2000 was 2.49, but since we can't figure out how we'd create half a kid, we're going with a whole kid � for three people, total. The Joneses earn the state's median family income of 41-thousand-657 dollars a year. They put away 5% of their income in a retirement account� lowering their adjusted gross income to 39,574. For the sake of easier calculation � we're going to round that up to 40-thousand-dollars. The Joneses current state income tax is one-thousand-223 dollars. According to a tax calculator on the website of the Public Affair Research Council of Alabama � the new state income tax under the Riley plan would be one-thousand-182 dollars� or a decrease of 47 dollars. This happens because the plan raises the base income at which state income taxes kick in. It also increases the standard deduction.

"There are a lot of people that are going to pay less."

Governor Bob Riley � promoting the plan in Birmingham recently. Riley says proposed federal income tax reforms would further benefit the bottom line. Currently, the Joneses pay 2-thousand-26 dollars in federal income taxes. But with those proposed federal changes, they'd pay just 18-hundred-six dollars� meaning a savings of 219-dollars. Overall, the Joneses would experience a 262-dollar income tax decrease under the proposed state and federal reforms.

"That's an obscenity!"

Grover Norquist is President of the Washington DC-based groups American's for Tax Reform.

"The idea that you should be in favor of a state tax increase because if the state took a dollar from you, maybe the federal government would have taken 20 cents of that dollar anyway? So you're really not out a dollar � you're out 80-cents? But you're still out 80 cents! (laughs) That's no progress."

Norquist and other anti-tax organizations also take issue with increase in state property taxes under Amendment One. Alabama residents have traditionally enjoyed very low property tax rates� but the proposal would raise property taxes for homes valued at 60- thousand or more. Remember the fictional Joneses? They own a home with the median value for Alabama � 85-thousand-100 dollars. Their tax bill would go up about 23-dollars the first year under the new plan. By the final year of implementation � 2007 � they'd see a 93 dollar a year increase. In radio and TV ads, critics have blasted the 400% increase in property taxes, but Amendment One proponent Gary Youngblood of the Alabama Partnership for Progress � says they're using scare tactics. He does the math on his own Birmingham-area home.

"They say your taxes are going to up up 400%. That's not true! It's just the state tax. It doesn't apply to the local tax or the country. My taxes on my home will only go up $460 over a five year period. It's not going to hit me overnight! It's going to be phased in a little bit each year. And it's certainly something that's tolerable."

"They say � oh, well poor people, if they don't own property that's not going to affect them. Not true!"

Bob Gambacurta is a spokesman for the Tax Accountability Coalition � a group of small business owners and family farmers formed to fight Amendment One.

"If they don't own property they rent. And if they rent from somebody their rent's going to go up because the landlord's property taxes are going up. So the idea that we're not going to pay more is simply not true and I wish they'd stop telling us that."

Another thing Gambacurta wishes the proponents of Amendment One would stop doing is downplaying the impact of the proposed Sales and Use Tax. The proposal would levy a 4 percent state tax plus local sales and use taxes on installation and repair services and warranty and service contracts. So � for instance � if Mr. Jones would need the tires on his truck replaced next year, under the proposal he'd have to pay taxes on the labor to install those tires. The plan wouldn't tax the services of lawyers, doctors, accountants and many other professionals. Gary Youngblood of the Alabama Partnership for Progress says it's a small price to pay for the vast good that could be done with the 104 million dollars the service tax would raise for state and local coffers.

"Let's just say we have an eight percent sales tax here in Jefferson county, which of course we do, and I go out and buy a set of tires. The last set of tires I bought for my car were $500 and there was about $100 of labor to it. It was about a $600 deal. I paid 8% sales tax on the $500. I didn't pay anything on the labor. So I paid $40 in sales tax under the current tax structure in this state. Under the new tax structure, if it passes, I will also pay the 8% on the $100. So I will pay $48, instead of $40."

A drop in the bucket for Youngblood, but John Giles -- Executive Director of the Christian Coalition of Alabama � believes it could be devastating for low-income Alabamians.

"This new service tax is going to absolutely paralyze low income people b/c they're not in a position to go out and buy new equipment that's got warranties on it. They've got to buy used equipment. Used cars. Used air conditioners. Used refrigerators that need service on 'em and they're going to be taxed on that new service � any service on any vehicle or transmission, tune-up � whatever the case might be. And that's going to be staggering to low-income people."

"you've got to look at the tax package overall."

Again, Gary Youngblood.

"You know, John Giles and others would like to look at one piece of the tax package and criticize it and if it doesn't fix everything in this state � if it doesn't fix every problem, them I'm against it� is the mentality there, is the attitude. And it's not the correct attitude to have."

But tomorrow's vote will likely hinge on attitude, say the analysts. Christopher Stream is a political scientists UAB.

"I think there's been this sort of classic elite versus mass debate going on in which riley is really appealing to the middle class, well-educated Alabamian and they seem to be for his plan and then you have this sort of mass of cynical, don't-trust- government-to-do-the-right-thing kind of people who are clearly not willing to give Montgomery and the state legislature more money."

It's a reality that even the Governor himself recognizes.

"I saw a lady interviewed in Montgomery the other night � on a TV station down there. She was buying groceries. They walked up and asked her what she thought of the package and they said, uh, tell us about you. And she's a single mom, 3 kids. And they said � do you realize if this passes your exemption will go from $300 per children up to $2,200? And herein lies our problem. Once she said that, she said � you know, my mom told me one time� if something sounds too good to be true it probably is! That's our problem � the people out there who will benefit the most from this package � we have not done a good job of explaining the benefits."

It's true � public opinion polls show the tax and accountability package plays well with more highly-educated, wealthier Alabamians � those who would likely pay more under the plan � and doesn't do nearly as well with lower-to-middle income Alabamians like the Joneses� those who would benefit most from it. But how successful are public opinion polls in predicting the outcomes of votes like the one tomorrow? Joins us tomorrow on Morning Edition as we talk to pollsters, politicians and analysts.

~Tanya Ott, September 8, 2003