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Alabama Budget Passed by Youth NEEDS to be Discussed by Montgomery

by: patrickfitzgerald2013

Wed Jan 16, 2013 at 15:03:13 PM CST

(If a group of high school students can come together and talk rationally about Alabama's budget & tax system, why can't our actual legislators? - promoted by countrycat)

This summer, I had the honor and privilage of attending the American Legion's Boys State. I successfully ran for Governor there, running on moderate Democratic prinicples. After I won, director Judge Pete Johnson gave me a "Governor's Challenge". I had to pass a budget through the Boys State House and Senate in 48 hours, while fixing the structual deficit. I am proud to say that we did just that. The very plan we passed through a Republican-predominant Boys State is below.

At the end of the day, when we worked on the budget, party affiliations dropped. The next generation of Alabamian leaders wants one thing and one thing only:: good change and progress for the people of the state.

 Now, with the legislative session coming right around the corner, I need your help. LIA, I need you to promote this budget, or parts of it to Montgomery.

While the budget is certianly not likely to fully pass in this session, some parts could. Even if some parts do not, at least the conversation for them passing in the future has started. Please let me know what you think. Thank you!

patrickfitzgerald2013 :: Alabama Budget Passed by Youth NEEDS to be Discussed by Montgomery

Income Tax Reform

·        Install a graduated tax code:

1.     0-29,999 (0%) 1/5 of state

2.     30,000-99,999 (5%) 3/5 of state

3.     100,000+ (7%) 1/5 of state

·        These reforms alone would generate an extra $800 million.

·        80% of Alabama families would either have their income taxes cut, or remain the same

·         Flexible. We only want to have the 7% rate exist for the first 2-3 years of our Alabamian Revival Act. We realize that the state is at a huge crossroads and that we need to deeply re-invest in the state to fix the $-563 million structural deficit. We also want to continue to celebrate our relatively low tax rates in the state. After the 3 years of a 7% tax rate, it will be lowered to 6%. This still would bring in an extra $400million compared to the old system. This alone could almost solve the structural deficit.  

·        All stats from the plan and setting the rates of taxes come from my income tax research group of my cabinet. They received their information from a variety of sources, but mainly the 2010 census

Sales Tax Reform

·        Get rid of the grocery tax (Cost $30 Million without any change to sales tax. This would be made up for the new revenue in the income tax arena.)

·        OR—A change in sales tax could occur:

·        4.5% would have us breaking even, but 4.25% would be easier for tax payers to accept (Still cost $15 Million). Boy’s State Accepted 4.5% sales tax.  

Property Tax Reform

·        Change the property tax from 42 mils to 44 mils

·        Even if we were to double the property tax, we would still be the lowest in the nation

·        Separate family farms and small businesses from the same taxation group as huge corporations. When this is achieved, cut the taxes of family farms and small businesses

·        Even with cutting family farm taxes in half, we would be able to generate an extra $109 million to the general fund

Excise Tax Reform

·        Changes in the sin tax on:

1.     Beer: +5 cents (per gallon)

2.     Liquor: +10 cents (per gallon)

3.     Cigarettes: +29 cents

·        A new $101 million to the general fund

·        All rates are still lower than surrounding states in these categories (except MS for cigarettes) to ensure that people won’t do as they did in DC and Chicago and go to border states to buy the products cheaper.

·        A very, very, very, small percentage of the state would be able to drive to MS to actually make money or break even from buying cigarettes there, because of the money they would spend on gas

Medicaid Crackdown

·        Create a crackdown/watchdog group to stop abuses

·        We spend 5 Billion on Medicaid each year

·        By creating a system similar to Florida’s successful system, we could save up to $80-120 million annually on Medicaid fraud.  The costs of employing all involved in the system would be 2-3 million a year. The building of facilities and maintaining them annually would be about 3 million dollars Income tax      

 Income TaxWorst: +400 Million Best: +800 Million

Sales Tax : Worst: -30 Million Best:  Even

Property Tax:    Best: $109 Million and up

Excise Tax:        Best: $101 Million

Medicaid Crackdown:  Best Range: $80-120 Million  

Overall: Best: $1.1 Billion Worst: $660 Million

Either one SOLVES the $-563 Million Deficit of the general fund Also passed with the budget::

EducationHighly taxed and highly regulated gambling would also generate $700 million to the education budget. We got these stats by adopting the GA lottery structure, in relation to how many people above the age of 18 that we could expect to play the lottery or gamble at a casino   

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Cross examination and comments (4.00 / 1)

Q.  This was an all male group, as it is Boys' State.  Please describe the backgrounds and socio-economic statuses of those in this legislative body.  Where were they from? Some of these guys will run for office in future years. 

Comments:  Any thing having to do with Medicare, Medicaid, and Florida governor Rick Scott is suspect.  The fraud in the programs is on the part of medical providers, not beneficiaries. 

Judge Pete Johnson is one of my heroes from the bench.  He exemplified what I want in a judge.  One day he told a story of having been robbed of his watch, and how he picked out the wrong man as the robber.  The real robber's mother turned him in, and he got the watch back.     

I did have the same thought about Rick Scott (0.00 / 0)
When I read that about Florida, I wondered "hey, was that the investigation/program that caught Rick Scott scamming Medicare?"

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."  - John Kenneth Galbraith

[ Parent ]
Lost me on the Property Tax (4.00 / 1)

First, let me say that overall this looks impressive and displays an understanding that many do not posess.

Looking over it, I have a question I wish someone could help me with. As I understand it, the state currently levies a 6.5-mil property tax, as opposed to the 42-mil indicated. Am I missing something? Also, based on my limited knowledge of taxes and math, and also based on the FY2012 Ad valorem estimated reciepts of 141,500,000- I only see a theorectical additional 43 million in revenues with a 2-mil increase.

 Am I looking at this wrong. 

Not to critique this impressive work, but simply to ensure my personal understanding. 

Keep up the good work, Patrick. 


Ding, ding... first time comment here! (0.00 / 0)

Welcome to LIA!!!

We hope you'll continue the conversation with us, comment often, and even write your own diaries about issues you're knowledgeable and passionate about.

Please keep visiting!

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."  - John Kenneth Galbraith

[ Parent ]
Thanks for sharing this with us, Patrick (0.00 / 0)

Years ago, I was a delegate to Alabama's mock constitutional convention and it was quite a slap of reality when it comes to compromising and creating something that a large group of people can accept and support.

Every person there supported a new Constitution for the state, but the devil was certainly in the details!  I'm sure y'all had a similar experience at Boy's State with the budget.

That you could all hammer this out over a weekend is impressive.  It's not perfect, of course, but hey... 48 hours!  Think how much our Legislature could get done during their 100 day sessions if they would just do it.


"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."  - John Kenneth Galbraith

To Answer Questions (0.00 / 0)

1. This group was selected of students from all counties and schools in Alabama. Every high school has an option to send a certain number of students to Boys State to run a mock Government. Socioeconomic ranged as it does in the state, from somebody from Vestavia Hills to Monroe County. Also, I love Pete Johnson. Great guy. I wish he would have ran for state-wide offices.


About Medicare Crackdown: Like I said, if even one part of this budget could pass, it would be a success in my mind. I understand that the logistics of such a crackdown team would be very hard to organize. If the crackdown would be something that was thrown out, I would be perfectly fine with it.


About the Property Tax: Every tax reform mentioned here was calculated by my cabinet and I. We were pitching an increase of 2 mils to the property tax. It probably would have been easier just stating that, but we wanted to give an example. However, if the numbers were wrong on property tax, as they might have been with the 42 mil rate, if we were to raise the property tax by 2 mils, regardless of the rate, we would get somewhere. If we raised it even to 3 mils, according to the numbers you gave me, we would raise $69 Million in revenue. 69 Million is  nearly 14,000 $5,000 scholarships for graduating seniors wanting to advance their educations. 69 Million is almost 70% of Gov. Bentley's  annual roads program proposed in 2010. Thank you for sharing with me.


So, do y'all think this can happen?

Patrick Fitzgerald



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