3/9/2015 Group Watch: Governor’s Tax Increase Details

The Governor’s proposed tax increase is supposed to raise just over $4 million, but many claim it will bring in much more. Here are a few of the proposed increases and changes and the amount they will raise:

• Cigarette and Tobacco Tax: $205 million. It would raise taxes on pack of cigarettes by 82.5 cents and by a proportional amount on other tobacco products.
• Sales Tax for Automobiles: $200 million. It would double the sales tax on automobiles from 2% to 4%.
• Public Utilities License Tax: $41 million. It would remove the exemption that applies to municipal utilities.
• Rental Tax for Automobiles: $31 million. It would raise car rental tax to 4%.
• Insurance Premium Tax: $25 million. It would remove the credit for state privilege tax paid by insurance companies and remove the credit for ad valorem tax paid by insurance companies.
• Corporate Income Tax: $20 million. It would require combined income reporting for corporations doing business in other states.
• Individual Income Tax: $12 million. It would eliminate income tax withholding exemption certificates.
• Financial Institution Excise Tax: $1 million. I would remove the credit that financial institutions receive for sales taxes paid.

Look for much more information on the proposed tax increases in future issues of Group Watch.

February 2015 Group Watch: News & Views from the State House

Business is booming in Alabama, and the new Senate Majority Leader is reaching across the aisle.

• Exports Are Up: State exports were up 1.2 percent in 2014, led by shipments of Alabama-made automobiles to almost 100 countries, according to U.S. Commerce Department data. Rising overseas sales of industrial machinery, plastics and more contributed to a total of $19.5 billion in export sales last year. That was just short of the state’s annual record for overseas shipments, which was set in 2012, according to the Alabama Department of Commerce. Canada was the top foreign market for Alabama’s fast-growing auto industry, with nearly $2 billion in vehicle shipments. Alabama’s exports are up 57 percent since 2009.
• Senate Majority Leader involves Democrats: Montgomery is not known for transparency; in fact, the average citizen would probably have difficulty listing the top two or three issues facing the State Legislature. Alabama’s new Senate Majority Leader, Republican Greg Reed of Jasper, wants to change that. Reed recognizes the need to provide a blueprint for legislative action that is both clear and concise. Reed believes clearly identifying priorities will help Senators relay their accomplishments to their constituents. Reed is willing to extend an olive branch to Democrats in an effort to restore a collegial atmosphere. He recognizes that Republicans have the votes to control outcomes, but wants to include Democrats in discussions about the agenda, the calendar and legislative issues. He suggested establishing bipartisan dinners and other outings where Senators could develop relationships rather than merely clashing on the Senate floor. Reed hopes to set the tone as a new kind of communicator willing to serve his constituents, his colleagues and even those with whom he disagrees.

Coming Soon

These desks won’t be empty for much longer! The 2015 Regular Session of the Alabama Legislature starts on March 3 this year (instead of in February) as this is the first year of the Governor’s new four-year term. Watch your inbox for weekly issues of Group Watch with updates on all the happenings at the State House.

February 2015 Group Watch: Alabama Congresswomen Shine

U.S. Representative Terri Sewell, a Democrat from Selma, and Representative Martha Roby, a Republican from Montgomery, recently teamed up for a bill to award a Congressional Gold Medal to the foot soldiers who took part in the March 1965 voting rights march from Selma to Montgomery. Sewell introduced the bill, Roby served as an original sponsor, and all the members of the Alabama delegation served as co-sponsors. Sewell, the lone Democrat in Alabama’s delegation said the support for the legislation, both by the delegation and the House, where the bill passed unanimously, was a tribute to all those who marched.

February 2015 Group Watch: Former Gubernatorial Candidate Dies

Winton Blount III, the son of the late Montgomery philanthropist Winton “Red” Blount and a 1998 candidate for governor recently died of natural causes. The former businessman and chairman of the  Alabama Republican Party was 71. He will be remembered as a great visionary and strategist. Blount was a former chairman of the Business Council of Alabama and served as its acting president.

January 20, 2015 Group Watch: News & Views from the State House

The 2015 Organizational Session of the Alabama Legislature started last week. Leadership roles were filled and budget discussions began.

• Leadership: The  Legislature met on January 13 and 14 to formally elect its leadership for the next four years. There were no surprises as the House predictably re-elected Mike Hubbard of Auburn to another term as the Speaker and Victor Gaston of Mobile as Speaker Pro Tem. The Senate likewise re-elected Del Marsh of Anniston as Pro Tem and Greg Reed as Majority Leader. See below for for a full list of House and Senate committees. The highlight of the session occurred in the Senate where Senator Clay Scofield of Arab proposed to his girlfriend on the Senate floor and she accepted!
• No More “Kicking the Can Down the Road”: House Speaker Mike Hubbard said during a press conference that the Legislature does not need to settle for another short-term solution to recurring budget problems. Hubbard acknowledged legislative leaders have been meeting with the governor about ideas for the legislative session that begins March 3. The General Fund is projected to be about $250 million short next fiscal year. Hubbard said he is hopeful that a solution can be achieved, one that won’t just “kick the can down the road,” which has done for decades. Hubbard said, “That’s just not acceptable anymore.”

House Committee 2015

Senate Committees 2015

1/20/2015 Group Watch: AG Encourages Gambling Prosecution

Alabama Attorney General Luther Strange recently issued a memorandum to state prosecutors and law enforcement officials reminding them that electronic bingo machines are illegal, and state law, as settled by the Alabama Supreme Court, is “absolutely clear” on the issue. Strange said the Alabama Supreme Court upheld that bingo cannot be played with machines, and no local rule can override state law. He is encouraging local law enforcement and prosecutors to go after electronic bingo operators. Strange noted in the memo that his office can assist, as can the newly consolidated Alabama Law Enforcement Agency.

1/20/2015 Group Watch: Governor’s Accomplishments

Governor Robert Bentley recently gathered his cabinet to discuss their first-term accomplishments. Bentley said the state announced 63,00o jobs during the last four years, including Airbus, Remington Arms Company and Golden Dragon Precise Copper Tube Group. He said that that size of state government has been reduced by not replacing state workers who retired. He also pointed to the soon-to-be completed consolidation of Information Technology services and the consolidation of state law enforcement under one umbrella. In addition, the governor said his cabinet saved money by negotiating interest rates on loans, cutting one loan’s rate from 4.2 percent to 1.7 percent. His office released a booklet that lists his accomplishments.

December 2014 Group Watch: News & Views from the State House

Several bits of Alabama education news came out recently.

• High School Graduation Rate Rises: The State Department of Education recently announced the high school graduation rate has risen to 86 percent. In 2011, the rate was 72 percent; in 2012 it rose to 75 percent, and in January 2013, it was reported at 80 percent. The increase means the state is four years ahead of schedule with the department’s plan to reach 90 percent by 2020. According State School Superintendent Tommy Bice, each percentage gain represents about 600 additional students graduating from Alabama high schools. The graduation rate is calculated using the National Governors’ Conference graduation rate formula. A recent report commissioned by the Business Education Alliance showed that reaching a 90 percent graduation rate would have a positive economic impact on the state of $430 million.
• State Gets $17.5 Million to Expand Pre-K Programs: The State of Alabama was approved to receive $17.5 million under the federal Preschool Development Grants program to develop more pre-kindergarten programs in the state. Alabama was one of 18 states to be awarded grants and received the second-highest grant award amount, just behind Arizona’s $20 million grant. The grant will be renewed over the next three years. State officials say the funds could add up to 75 classrooms over the next year, bringing an additional 1,350 students into the voluntary program.
• New Oversight for Teachers’ Pension System?: State Finance Director Bill Newton recently asked the board of control for the teachers’ retirement system to consider broader oversight of the fund due to the downward trend in the ratio of assets to liabilities. Newton said the pension system had a funded ratio of over 100 percent in 2000, but that has dropped to 64 percent. The board did not act on the recommendation. Retirement Systems chief Dr. David Bronner called the idea a slap at him and the staff. He pointed to the system’s recent returns, which are in the top 13 percent in the country.

December 2014 Group Watch: Happy Holidays!

It’s the time of year to give and get gifts, and we here at The Bloom Group would like to thank all of our clients for the gift of trusting us to help you reach your goals. Our gift to you is our continued promise to serve you with the professionalism, integrity and effectiveness you’ve come to expect. We wish you and yours a happy and safe holiday season, Merry Christmas and Happy Hanukkah, and we look forward to continuing our prosperous and productive partnerships with clients, colleagues and legislators in the coming year.