Alabama's conservative Republican governor yesterday met resounding defeat in his highly publicized crusade for a $1.2 billion tax increase -- eight times the biggest previous increase in state history -- to resolve an unprecedented fiscal crisis, shift the tax burden from poor to rich and improve public schools funded at the nation's lowest level per child.
With 94 percent of precincts reporting, Alabama voters were rejecting Gov. Bob Riley's ambitious package 67 percent to 33 percent, consistent with recent polls that had shown it likely to fail by 20 or more percentage points, even among low-income people who stood to receive large tax cuts.
I disagree with the WaPo article's contention that this vote was a warning shot for the nation about how raising taxes is bad. State budgets (except for Vermont) are in record deficits, state constitutions (er, except Vermont) do not allow deficit spending, therefore the states will cut services. Basic ones, like public education, prisons, and state troopers:
Alabama has the nation's lowest state and local taxes per capita and ranks near the bottom in tests of public school performance. It also has more than 28,000 inmates in a prison system built for 12,000, and its state police force has only six troopers patrolling 67,500 miles of roadway after midnight. Riley's plan also aimed to shift the tax burden to the wealthiest Alabamians, who pay an effective tax rate of 3 percent, from the poorest, who pay 12 percent.
Withourt funding for schools, Alabama's workforce will become increasingly labor-oriented and there will be a continued exodus of skilled jobs. Crime will increase because there aren't enough troopers and not enough room for prisoners. These two issues have a powerful synergy working to undermine the very foundation of the state's economy - people.
This is a victory for cheap-labor conservatives who benefit from a massive gap between rich and poor and eradication of the middle class.