ALABAMA’s GOVERNMENT OPTS FOR TYRANNY

10 Mar. 2019

Dear Friends and Patriots,

I rarely intrude into state-level politics. There are a few reasons for that. One is unless you’re either in or very close to Alabama you don’t know the players, and the issues are usually a bit too local. I tend to track national politics and trends because of their greater general interest and effects.   But, once in a while I see something happening in my own state that is transcendent and in need of exploration so those in other places can understand a trend that could be affecting them in their states as well.   This is one of those times.

The citizens of Alabama are in the middle of a truly rude awakening.

With a legislative supermajority of Republicans and a Republican governor one might think this reddest of red states would exemplify the values of the Republican Party. But, it doesn’t. It never has. It’s just true. In Alabama you never quite know what “Republican” means. There’s no litmus test requirement to run as a Republican candidate. There’s nothing that binds Republicans to support the party’s platform at either the state or national level. Alabama’s Republican politicians are free to legislate like any average liberal Democrat if they so choose. It’s always up to the voters to do something about that. The party rarely polices itself.

Alabama may be suffering from a truth of its own history. The state was a solidly Democratic Party stronghold for many, many years. There was a time when Republicans were as rare as dodo birds. But, as with all states in the South, the tide changed and the increasing political, social, and fiscal liberalism of the Democratic Party alienated the largely conservative and religious citizenry. In the mid-‘80s it became apparent there was a stark difference between the Republican Party and that of the Democrats. President Reagan was personally responsible for the re-thinking of Alabama’s politics. Then, there was that Alabama Republican who managed to get elected to the US Senate, Admiral Jeremiah Denton. Yes, it was Senator Denton who broke the Democratic Party stranglehold on Alabama’s politics. After his election the state turned more and more Republican. In a few short years a flip-flop occurred and it became very difficult for Democrats to get elected. Their reputation as tax-and-spend, fiscally wasteful, and often amoral politicians took root and conservative Republicans found their long-sought foothold. The result should have been predictable. Democrat politicians switched parties in droves. It was quite a noticeable phenomenon that affected local, state, and national offices. The most noted switch was when Senator Richard Shelby, a Democratic Party stalwart and major hog-trough feeder in former times, abandoned his cronies and took up with the enemy – those in the Republican caucus.

There was and is a problem, though. The problem has to do with that definition of “Republican.” In Alabama it denotes the party banner a candidate runs under, and little else. To be a “good” Republican candidate in Alabama you may only have to affirm you’ve not run as or voted for a Democrat for the past three election cycles. You don’t have to actually swear to your solid conservative philosophy, though there’s hardly any that won’t. You don’t have to swear you’ll support the party’s platform, though virtually all candidates indicate they will. No, Alabama is a state where they take you at your word. The Republican Party here believes in personal integrity and does very little to bind a candidate to any Republican ethic.   They appear to believe candidates and their assertions of party fidelity and do almost nothing after elections to hold incumbents to account.   That’s the job of the people. After all, the Republican Party doesn’t elect anyone, the people of the state do. It’s the job of the people of the state to do their own due diligence and decide who to keep and who to toss out. It’s an understandable way of doing business, but one that at times leaves the citizens with too few options.

We just came off a mid-term election cycle. Alabama, as most states, saw races for our State House and Senate seats. As is now usual, there were many Republican candidates and a few Democrats.   The super-majority in our legislature is secure. The Governor’s chair has been in Republican hands for quite some years now and it was easy for Kay Ivey to be elected, even though she didn’t do much at all to campaign for that office.   One might think the state would be solid Trump country and working hard to mainstream itself within the conservative orthodoxy of “Republicanism.” One might think that, but if one does, one would be absolutely wrong.

Alabamians were a bit taken aback by Governor Ivey when she proclaimed in her inaugural speech her intent to support a rise in the state’s fuel taxes. Where did that come from? When she ran for Lt. Governor a few years back she’d signed the “Taxpayer Protection Pledge” pledge Grover Norquist was parading all over the country. No one had paid attention to the truth that she had never re-affirmed her support for that pledge. There’s that Alabama trust-thing again. And, once again our trust isn’t being rewarded in the ways we hoped.

Though we in Alabama understood we’d see an effort to raise fuel taxes, we blithely assumed it would be proposed in normal order and would proceed through the committee process to be placed before the people as a ballot referendum, as in years past. But, that’s not how things went down. Instead the Governor met with the leadership of Alabama’s House and Senate and together they strategized the mechanism to be used to ensure the tax proposal would be undefeatable.

Instead of normal order Governor Ivey called a special session of the state legislature. It began on Tuesday, 5 March, their first day in office, just after they all swore in. The Governor told them to plan to stay through the weekend. The agenda of the special session wasn’t announced, but everyone who watches such things understood the principle focus was to be gunning that tax increase through before most of the state understood what was happening. And, that’s just what they did!

Under normal procedure the first thing the legislature would do this year would be to reorganize, during a planned event called an “organizational session.” That would be when the leadership would restructure committees, sub-committees and the leadership structures of both the House and Senate. But, this year all that was pre-empted by the Governor’s need to pass the fuel tax before too much opposition could build. Understand that during a special session the normal rules are suspended and the bill passage requirements are lowered. Instead of a 2/3 majority to pass, the special session rule is for a simple majority.

The House passed the fuels tax increase bill on a voice vote by a big majority. It now moves on to the Senate, which may vote on Monday. There is no expectation the bill will fail.   Alabamians will be paying more at the pump. Our overlords in Montgomery will it, and it shall be so.

If you want to know a bit of background on this, pay heed.

The fuels tax is earmarked as the funder for the state’s Transportation Fund. One might believe the Transportation Fund is either running a deficit or is anticipating an unusual demand because of a major infrastructure project, but neither of those cases is true. What’s true is in the past ten years the Transportation Fund has had over $300M diverted to other uses. Yes, my friends, the state government in Alabama steals from itself! Last year alone the diversion was somewhere around $63M.   There is also a fact that the state is doing so well in tax revenues it’s already accumulated over $20M more this year than it anticipated or budgeted. It doesn’t take a rocket surgeon to understand the fund isn’t under-capitalized, so why the big push for a tax increase?

It’s partly because the current 18 cent tax was established a long time back – in the early ‘90s. It’s evidently time we had an increase. Oh, and Alabama’s infrastructure is in miserable condition, based on how many bridges in the state are over 50 years old. And, you know, there are roads with potholes! Yes, my friends, Alabama is in sorry shape and in need of a dramatic increase in infrastructure spending, which is also in line with President Trump’s priorities.   It’s all part of a whole, you know.   And, now we all should understand that taxes are time-value based, not needs or condition-based and obviously not actually revenue-based, either. As US Rep. Ilhan Omar recently stated, “It’s all about the Benjamins!” Okay, so she wasn’t talking about Alabama, but if the shoe fits Alabama needs to wear it.

An article in the Mobile Press-Register cited the Alabama Trucking Association support for the fuels tax. That association represents over 100 Alabama-based trucking companies, which are a big source of highway funds. Truckers pay an estimated 40% of all revenues that go to the state’s transportation fund. Trucking companies don’t actually care how high the fuel tax is in Alabama, or in any state for that matter. They’re like all other corporations; they don’t actually pay taxes, they only collect them. The fuel taxes are expensed on their company ledgers and rolled into their cost of doing business. In other words, when talking about corporations (and, in truth, any other business) the taxes are always passed on to the consumer. Think about that for a minute – you don’t only pay your fuel taxes, you also pay for all business fuel taxes through your consumer purchases. It’s just true!

You may still have a question about why a trucking association would back a tax. What’s in it for them? Think about independent truckers. Most of them are owner-operators whose business is hauling loads on a fixed-rate basis. They don’t get to set the rates, they either accept or reject loads based on the rate offering from the trucking companies. Out of that rate the independent trucker has to pay for the truck, insurance, maintenance costs, fuel, and still hope to make a living. Fuel tax increases are very likely to put many of those independents out of business. The major trucking companies will never weep over the plight of the independents.   As with baseball, there’s no crying in that business.  

The major proponent of the fuel tax is the Business Council of Alabama (BCA). The BCA is the biggest and strongest lobbying organization in the state. They lobbied Governor Ivey for this tax. Governor Ivey heard.   They lobbied the legislators. Evidently most of them heard as well. The BCA will have its tax. Now, we just have to wonder what they want Alabama to do with the funds that will accrue. I’m sure over time they’ll let our government know. The BCA runs Alabama, and everyone here understands it.

You have to be wondering why I’m bothering you with all this. What’s so important for everyone to understand? There are three aspects that need to be considered. The first involves moves in several states to increase fuels taxes. The second has to do with the nature of fuel taxes. The last has to do with the truth of tyranny.

Your state may not be trying to raise taxes on fuels, but there are several beside Alabama who either were or are. Republican Governor Mike DeWine is trying to raise Ohio’s tax by 18 cents. Democrat Governor Gretchen Whitmer wants to raise fuels taxes in Michigan by a whopping 45 cents, though it’s likely that number will be greatly reduced by their legislature. Minnesota’s Governor Tim Walz is proposing a 20 cent per gallon increase in his state’s fuels tax, which is already at 28.6 cents.   There is talk of an increase in the federal excise tax on fuels, which like Alabama hasn’t been raised since the early ‘90’s. And, like in Alabama, the passage of time was cited as a rationale for the increase.

It’s apparent that the “extended” period of low fuel prices has made governments hungry again. The consumers have been given something of a “raise” because our cost of living has been reduced a bit by lower fuel costs. As all governments tend to do, they want to take some of that “raise” from you. With the economy strong and unemployment numbers at record lows our governments are looking for ways to fatten their pet cows at our expense. It’s really that simple. They almost never try to look at what they do and ask, “Shouldn’t we just stop doing this and put that budget to better use?” No, that’s not what they do. Instead they look at potential revenue streams and they dream ever-bigger dreams. They’re always trying to turn our Paradise into more parking lots. And, our earnings are their means to those ends.

If you study tax philosophy and theory you understand the concept of regressive taxation. It’s a simple concept, really. It purports that certain taxes are highly regressive by their very nature – they affect the poor far more than those more financially blessed. Of all the regressive taxes a fuel tax is the most. In Alabama there are several counties that have virtually no industry at all. There are people who drive over 100 miles per day to work a job at a decent wage. But, because of the expense of keeping that job many of those people live at the margin, just above the point where it might make more sense to quit, stay home, and collect. This new fuel tax may have the unintended consequence of raising unemployment in the state. Not by much, but any increase in unemployment due to a political policy is questionable at best. I personally think of it as reprehensible.

In Alabama’s case it’s not unfair to decry the actions of the state government as tyranny. Until Governor Ivey acceded to the wishes of the BCA and announced her support for the fuels tax increase no one suspected she’d be a renegade Republican. No one imagined she’d call the state legislature into special session and ensure they rammed tax increases down the throats of the citizens.   No one believed so many of the state’s legislators would ignore all appeals from constituents and roll over from the pressure from the BCA and the Governor. But, that’s what happened, and what is happening. The people of the state have no say. We are seeing exactly the condition that started the revolution that created our nation – taxation without representation. Oh, we do have elected people who are in Montgomery posing as our representatives, but how many of those are from districts where the people have signaled their willingness to pay a new bill? The only honest people in the game are those who voted “NO” on the bill.   The rest are guilty of perpetuating tyranny.

In Liberty,

Steve