AEA’s Stand: AEA works diligently to protect the Education Trust Fund, which includes funding for pre-kindergarten, elementary, secondary, postsecondary, and higher education in the state. That mission began in earnest in 1975. At the time Gov. George Wallace wanted to “redirect” 12 percent of certain taxes earmarked to the Education Trust Fund to the state’s cash-strapped General Fund. AEA immediately attacked the proposal, pointing out that Alabama ranked 48th in the nation in elementary and secondary education funding and needed all the funds earmarked for education to go to education. AEA’s Executive Secretary Dr. Paul Hubbert (1969-2011) warned that allowing Wallace to raid the Education Trust Fund would set a dangerous precedent. AEA won that battle and continues to be the staunchest defender of the Education Trust Fund, an effort that plays out annually during the Legislative Session.
AEA’s Stand: Each year when education budgets are proposed by the governor’s office, AEA staff look closely at certain ‘education’ items in the budget that may be important but are not critical to the real mission for which school taxes were approved by voters. AEA’s funding and revenue experts look for items in the budget that do not give priority to students, teachers, programs, and services that support instruction. Working with education supporters in the Legislature, AEA proposes budget changes that help focus education dollars on Alabama’s students and classrooms.
AEA’s Stand: Taxes in Alabama are among the lowest in the United States. The state has developed one of the most aggressive tax incentive programs in the nation for new and expanding industry, which on the surface sounds great for business, but in reality hurts education funding when companies pay little or no corporate income taxes to support Alabama’s public education program. AEA supports legislation to close the many tax loopholes available to corporations and businesses. Corporate income taxes are a large component of the funding sources for education in the state. In each legislative session, AEA’s tax and revenue experts encourage legislators to close tax loopholes and stop corporate incentives that clearly hurt education funding. Recent national polling data show that two- thirds of voters believe that states should close tax loopholes first before considering any cuts in public education.
There is no evidence that corporate tax loopholes and subsidies have a positive impact on the economy according to conservative (Cato) and progressive (Citizens for Tax Justice/ITEP) think tanks that note loopholes and incentives are harmful to the economy. AEA agrees with these conclusions and is diligent in its efforts to work with the Alabama Legislature to close many of Alabama’s corporate tax loopholes to prevent the continued reduction of education funding.