State has lowest taxes in nation – again

Jimmy Martin | Special to the Advertiser

Published Monday, November 2, 2009

Once again, Alabama has been recognized for having the lowest taxes in the nation. You read that sentence right: Alabama has the lowest taxes in the nation.

The U.S. Census Bureau reported recently that Alabamians and the companies that do business here paid less in taxes than people and businesses in any other state in 2007, the last year all data was available. This is not an unfamiliar spot for our state; we have been consistently lowest or near lowest for many years now.

According to federal figures, state and local governments collected an average of $2,909 in taxes per person in 2007. Taxes looked at by the Census Bureau included income taxes, sales taxes, fuel taxes and property taxes. To see how low this figure is, compare it to the national average of $4,011. Alabamians pay almost 30 percent less in state and local taxes than the national average.

We don’t make as much money as folks in other states, the average income in Alabama is lower than the national average, so it would seem natural that we would pay less taxes. However, even when accounting for income, our taxes are still some of the lowest.

Federal data shows average income in Alabama was $32,404, ranking us 42nd in the country. The national average was $38,611. Yet Alabamians still paid a smaller share of income on taxes than most, with state and local tax collections equaling 8.98 percent of the income, a lower percentage than all other states but South Dakota and New Hampshire. The national average was 10.65 percent.

Alabama citizens have been opposed to higher taxes, and the Legislature in this term and in past terms has heard and acted on their wishes.

It also means that you can be sure that Alabama state government does more with every taxpayer dollar than just about any other state. When you collect less you spend less, and that means doing more with less.

Each year the process of writing balanced budgets is certainly not as easy as other states. We must provide for education, for the care of children and the infirm, provide adequate public safety, and many more functions for the public good with less revenue. We work hard at it, and for the most part we provide a level of service comparable to other fellow southern states.

However, there is a price for the lowest taxes. During this decade, before the housing bubble burst and the economy stumbled, revenue from income and sales taxes soared at historic rates. These two revenue streams are earmarked solely for education, which meant there were millions available for new investments in classrooms.

We were able to fully fund the Alabama Reading Initiative for the first time, bringing it to every school in the state. We were able to expand the Alabama distance learning program ACCESS, bringing technology and opportunity to hundreds of schools. We founded the Math and Science Initiative, hoping for the success we saw the state reading effort. And we gave hard working teachers much needed raises while expanding the school year five extra days.

What did we get for this investment? We saw the highest jump in elementary reading scores in the nation. We saw one of the largest jumps in students taking Advanced Placement courses in the nation. We saw real measurable progress in almost every aspect. The money we were able to put in made schools better, no question about it.

Now with the economic downturn, we have had to cut school budgets and suffer proration. We will have cut schools almost 20 percent in two years because of the recession. These cuts hurt, and we are doing everything we can to lessen the impact on teaching and learning. But the lesson was clear: when we have the resources to invest, we see returns in student achievement.

We celebrate our lowest taxes in the nation status, and rightfully so. We will continue to make sure tax dollars are spent wisely, and that taxes are not increased on working families and seniors. We also recognize that prudent public investments in things like education have important benefits, and we will work hard to find adequate funding.

It is a tough balancing act, but one that Alabamians want, and one that the Legislature works to fulfill every session.

– Jimmy Martin serves as Chilton County’s representative in the Alabama Legislature.

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