Progressive tax changes would allow Alabama’s budgets to endure and rebuild after COVID-19

Alabamians are living through hard times right now. Thousands of people are sick. Many more are scared or out of work. Uncertainty is everywhere amid a pandemic with no clear timetable or end game.

As more businesses close or cut back, as more people lose income, and as fewer of us go to the stores where we normally shop, state tax revenues are falling. That endangers funding for education, public health and other core services at a time when we need them most.

A state Senate committee Tuesday approved a smaller General Fund (GF) budget than the one Gov. Kay Ivey initially proposed. But that budget’s revenue assumptions may be too optimistic, and many lawmakers acknowledge they may need to revisit it this summer or fall as the pandemic’s financial toll becomes clearer. In the meantime, the ongoing public health emergency is compounding structural problems that have plagued Alabama for decades.

How Alabama should strengthen its tax system

The COVID-19 pandemic and its associated economic freefall are not the root cause of Alabama’s chronic underfunding of public services or the fundamental failures of its tax system. But this crisis is exposing and exacerbating those shortcomings. And it is illustrating the need for progressive tax changes that would equip our state to endure both this downturn and future recessions.

Alabama should enact these changes to raise revenue for vital services and make life better for struggling families:

  • Eliminate the regressive, and expensive, state income tax deduction for federal income taxes. About 80% of the $782 million deduction’s benefit flows to the top 20% of households.
  • Increase income tax brackets so the highest-paid 25% of taxpayers have a higher tax rate than people in the lower and middle brackets do. Alabama’s top income tax rate kicks in at just $3,000 of taxable income.
  • Impose a temporary income surtax on millionaires during the financial crisis.
  • Adopt combined reporting to prevent corporate tax avoidance while rejecting proposals, such as moving to a single sales factor formula, that would reduce taxes for large corporations.
  • Eliminate the state sales tax on groceries and replace that revenue by making progressive improvements to our income tax system. Alabama is one of only three states with no tax break on groceries.
  • Apply sales and use taxes to more professional services and digital goods and services like music downloads and video streaming services.
  • Institute or increase sales and excise taxes on unhealthy items like tobacco, vaping products or sugary soft drinks. The state could dedicate this money to Medicaid and other health care services.

Lessons from the past: How the last recession devastated Alabama’s finances

Alabama has two major revenue sources for public services that rise and fall with the economy. One is the income tax, which is earmarked (or dedicated) solely for K-12 teacher salaries. Sales and use taxes, which largely go toward education but also fund some other services, are the other. (Use taxes apply to online and mail-order purchases.) Most GF revenue sources grow slowly even in good times.

To understand this downturn’s potential impact, we should look back to the last recession, which struck Alabama in 2009. Both the Education Trust Fund (ETF) and GF were prorated as revenues plummeted during the Great Recession. Proration is an across-the-board funding cut when revenues fall short of expectations.

COVID-19 downturn could reduce Alabama's state funding for public services by more than $3 billion next year. Potential decrease in available state tax revenues between 2020 and 2021. General Fund: -$305 million. Education Trust Fund: -$841 million. Other dedicated funds for GF agencies: -$2 billion. Total revenue loss: -$3.1 billion. Source: Alabama Arise calculations based on state tax revenue decreases between 2008 and 2009. These figures show the losses that Alabama could expect if revenues fall at the same rate they did during the Great Recession's first year. Actual revenue declines between 2020 and 2021 may be larger or smaller than these amounts. This graph shows annual General Fund appropriations separately from other earmarked revenue that GF agencies receive each year.

ETF revenues went down 11.8%, or $702 million, between 2008 and 2009. GF revenues for services like courts, Medicaid, public safety and veterans’ assistance fell by 13.9%, or $250 million.

The ETF could lose $841 million in state money next year if revenues decline at the same rate as in 2009. This would be equivalent to $1,160 per student in public K-12 schools, or 20% of all state K-12 funding. It’s also more than this year’s state allocations to the University of Alabama and Auburn University systems combined.

Meanwhile, the GF could lose $305 million if this downturn matches the Great Recession. That would be equivalent to 2020 GF funding for the Department of Human Resources (DHR), mental health, public health and senior services combined.

This loss also doesn’t include other dedicated funds for GF agencies like child welfare, mental health and veterans’ services. If these earmarked funds dropped by 13.9%, as the GF did in 2009, Alabama would need another $2 billion to avoid cuts. Altogether, the total funding loss to education, health care and other services would exceed $3 billion.

Rainy day funds and federal relief will help, but they aren’t a lasting solution

Thankfully, Alabama has three revenue sources to help avoid or reduce service cuts, at least temporarily. Lawmakers have established two rainy day funds – essentially lines of credit – within the Alabama Trust Fund that the governor can tap to address major budget shortfalls. The ETF also has a reserve fund called the Budget Stabilization Fund, which can be tapped if revenues aren’t enough to cover budgeted expenses.

The governor can authorize withdrawal of no more than 14% total of the prior year’s education spending from a combination of the Budget Stabilization Fund and the ETF Rainy Day Fund. That amounts to around $997.6 million. And the state can withdraw 10% of prior-year spending for other services from the GF Rainy Day Fund, which comes to $219.2 million.

Between the two budgets, the governor could withdraw $1.2 billion from rainy day accounts. But to maintain current funding levels, Alabama still would need another $1.8 billion if this downturn matches the Great Recession.

Alabama expects about $1.8 billion in federal relief as a result of the Coronavirus Aid, Relief and Economic Security (CARES) Act. This one-time relief could get the state through 2021 by a hair – if federal officials allow it. The U.S. Treasury is restricting the extent to which states can use these funds to plug budget shortfalls. Cumulative shortfalls in Alabama and other states from 2020-22 could top $650 billion, the Center on Budget and Policy Priorities estimates.

COVID-19 state budget shortfalls could be largest on record. Total shortfall in each fiscal year, in billions of 2020 dollars. 2001 recession. '02: -$60. '03: -$105. '04: -$110. '05: -$60. Great Recession. '09: -$130. '10: -$230. '11: -$150. '12: -$120. '13: -$60. COVID-19. '20: -$110. '21: -$350. '22: -$190. COVID-19 estimates based on CBPP calculations using Congressional Budget Office and Goldman Sachs unemployment estimates. Does not reflect use of rainy day funds or federal aid already enacted. Source: CBPP survey of state budget offices (through 2013); CBPP calculations (2020-2022). Center on Budget and Policy Priorities, cbpp.org.

COVID-19’s budgetary threats don’t end there. Local governments also will need relief, and this fiscal crisis may be even worse than 2009. If a 2020 recession spirals into a depression, we will be facing some very dark days without new tax revenue to make them brighter.

The path to stronger, more inclusive budget and tax policies for Alabama

Alabama could respond to these steep revenue losses with harmful cuts to education, mental health care, public health and other critical needs. Or the state could make the wiser choice of raising sustainable new revenue to invest in the common good.

Our partners at the Institute on Taxation and Economic Policy said it best: “For states facing catastrophic revenue declines, asking more of taxpayers with a clear ability to pay is far preferable to cutting state budgets, which would lead to mass layoffs, steep cuts in public services, and a downward spiral in the economy.”

Year after year, Alabama legislators have built a series of bare-bones budgets on one-time funds and temporary federal aid. They’ve refused to modernize our state’s upside-down tax system by making it more progressive and more fair for struggling families. And they’ve refused to ask large corporations and wealthy people who can afford to pay more to contribute their fair share to support the common good.

There’s a better way. The progressive tax changes we propose would protect education, health care and other services from devastating cuts during the COVID-19 recession. They also would allow our state to expand Medicaid and ensure all Alabamians can get the health care they need to survive and thrive, both during this pandemic and in the long recovery ahead. If we want a brighter future for Alabama, we need to invest in it now.

Federal law strengthened SNAP amid COVID-19 pandemic, but benefit increase still needed

The economic meltdown resulting from the COVID-19 pandemic has created an extraordinary demand for food assistance. State agencies are working overtime to figure out how to get food to hungry Alabamians while schools are closed, people are sheltering in place and the risk of infection is high. Applications for food assistance through the Supplemental Nutrition Assistance Program (SNAP) are at record highs as unemployment soars.

Unlike earlier recessions, which rolled out more slowly, the COVID-19 downturn happened virtually overnight. That has left state agencies scrambling to keep up with the demands for help, the implementation of new federal policies, and the virus threat to their workforce and clients. And they are doing it against a backdrop of decades of inadequate state funding, which led to smaller workforces and delayed implementation of new technologies that could have helped address the current crisis.

The Families First Coronavirus Response Act – the second federal law in response to the pandemic – gave the Alabama Department of Human Resources (DHR) new assistance, authority and flexibility to expand SNAP assistance during this pandemic. Thanks to the new legislation, DHR can make temporary but important changes to SNAP. These changes include:

Suspension of time limits

The Families First Act includes a nationwide, temporary suspension of SNAP’s three-month assistance time limit for able-bodied adults under age 50 and without children in their SNAP household. Officials reinstated this time limit in 2016 after the Great Recession ended. Since then, tens of thousands of Alabama SNAP participants have been cut off the program. People who lost food assistance because of the time limit are now eligible again under the new federal law. But it is unclear how officials will notify them of their restored eligibility.

Increased assistance for most families

The Families First Act authorizes states to give people additional SNAP benefits up to the maximum amount allowed for their household size. This will be an enormous help for hundreds of thousands of struggling Alabamians. Unfortunately, the poorest families – those already receiving the maximum benefit – will not receive an increase.

The increased benefits for March were added to participants’ EBT cards around the end of March. And participants will see this month’s increased benefits added to EBT cards around the end of April. DHR will approve new SNAP participants for assistance at the maximum level for their household size.

Replace school meals with SNAP and SNAP-like assistance

The Families First Act allows states to provide school meal replacement assistance of around $114 per child per month. This aid can come through SNAP or another mechanism if the children attend a school that is closed and otherwise would receive free or reduced-price school meals. This would include all children who are certified as eligible for free breakfast and lunch. It also would include all children who attend a school that provides free meals to all enrolled students through the Community Eligibility Provision.

Since all public schools in Alabama are closed for the rest of the semester, households already receiving SNAP could simply see their SNAP assistance increased by the value of school meals that children in the family previously received. However, Alabama hasn’t yet decided how to give SNAP-like “issuances” to such families who are not already enrolled in SNAP. Participants cannot receive school meal replacement benefits until DHR and the state Department of Education agree on a plan and get approval from the USDA Food and Nutrition Service (FNS).

Reduced administrative burdens

The Families First Act allows states to request policy changes to streamline SNAP procedures to keep up with increased demand. For example, a state could ask to make certification periods longer or waive interviews with new participants. States also could seek to reduce the amount of information that must be verified and simplify the verification process. Alabama already has streamlined many procedures, but it should make additional SNAP administrative changes to reduce waiting time for approvals. Thus far, DHR has not requested any administrative waivers from FNS.

What should happen next

Anti-hunger advocates had hoped the Coronavirus Aid, Relief and Economic Security (CARES) Act – the third federal law in response to the pandemic – would include a 15% increase for SNAP. Unfortunately, this increase was not in the final bill enacted March 27.

Alabama Arise and other advocates still encourage Congress to increase overall SNAP assistance and raise the minimum benefit levels. Congress also should prohibit the USDA from moving forward with proposed rule changes that would limit SNAP access and reduce benefits for most participants.

These SNAP improvements would boost the economy by increasing consumer spending. Most importantly, they would help families get the nutrition they need to stay healthy during this pandemic and beyond.

Unemployment insurance improvements, recovery rebates will help Alabamians hurt by COVID-19 pandemic

The coronavirus pandemic has caused an unprecedented increase in unemployment insurance claims nationally. And the story is the same in Alabama, where 74,056 UI claims were filed in the week ending Saturday, March 28. That’s easily a record high since 1987, the earliest year for which weekly data is available for Alabama. The number of claims likely will continue to increase quickly in the coming weeks.

The pandemic has highlighted the need for Alabama to lift harmful UI cuts and barriers that lawmakers erected last year. In the meantime, three types of state and federal payments can help Alabamians who have lost their jobs or have working hours reduced because of the pandemic. They are traditional unemployment insurance (UI), Pandemic Unemployment Assistance and recovery rebates.

Unemployment insurance (UI)

This program provides financial support for qualifying Alabamians who lose their jobs or suffer a reduction in hours through no fault of their own. The weekly payments range from $45 to $275, based on earnings in roughly the past year and a half. That’s well below the nationwide median of $366 per week.

Alabama’s UI system is stressed by new claims because of recent massive layoffs. Many applicants have experienced long delays in accessing the website and phone lines to apply for benefits. As in other states, Alabama’s UI system wasn’t ready for a rapid, unprecedented flood of new applicants. But that’s no reason to delay a UI application if you’ve lost your job. You can click here to apply for UI benefits in Alabama.

To file unemployment compensation claims, visit www.labor.alabama.gov or call 1-866-234-5382.

The Alabama Department of Labor (DOL) has taken some important steps to ease UI access during the pandemic. The DOL has waived its usual requirements for job searches and a one-week waiting period before benefits begin. Employers also will not be penalized with an increased UI tax rate based on high amounts of paid benefits for now. This removes a motivation for employers to dispute an employee’s claim for benefits.

Even Alabama’s maximum UI benefit amount is insufficient to secure the basic needs of many people. Fortunately, new federal legislation enacted Friday will help jobless workers fill that gap for the next few months. The Coronavirus Aid, Relief and Economic Security (CARES) Act will allow Alabama to provide an additional 13 weeks of federally funded UI benefits. The CARES Act also will supplement state benefits by providing a federally funded $600 weekly benefit increase through July 31.

Pandemic Unemployment Assistance (PUA)

This new federal program provides benefits to many people who lost their jobs amid the pandemic but don’t qualify for traditional UI benefits. Participants can receive up to 39 weeks of PUA benefits. Eligible people include:

  • Self-employed people
  • People who haven’t been working long enough to qualify for UI
  • Contract workers and gig workers
  • People who have exhausted regular UI benefits
  • People whose workplaces closed because of COVID-19
  • Caretakers of people sick with COVID-19

PUA participants will receive half of the average weekly regular UI benefit in Alabama. They are also eligible for the federally funded $600 weekly benefit increase available to beneficiaries of regular UI. Federal and state agencies are still working to implement guidelines for the new program.

Recovery rebates

These benefits are refundable, one-time federal payments. The money will not count as federal taxable income. Here are some key facts:

    • The full rebate amounts are $1,200 for single adults and married couples who file taxes separately, and $2,400 for married couples filing jointly.
    • Families also will receive an additional $500 per dependent child under age 17. The $500 payment is unavailable for older dependents like college students, seniors or adults with disabilities.
    • Rebates will be paid in full to individuals making up to $75,000 per year and couples making up to $150,000 per year. These rebates are available to individuals or households who filed a tax return in either 2018 or 2019. Millions of Americans with extremely low incomes likely will have to file a return to receive the rebate.
    • The rebate phases down gradually for individuals who reported more than $75,000 in annual income and for couples who reported more than $150,000 in annual income. Payments will be unavailable to individuals with annual incomes of more than $99,000 and couples with annual incomes of more than $198,000.
    • Payments will arrive via direct deposit for those who have given the IRS their deposit information. Others will receive a check.

State changes to unemployment insurance still needed

UI benefit increases and removal of barriers are good first steps toward ensuring state and federal governments mitigate the economic consequences of COVID-19 as much as possible. The Alabama DOL’s response to the CARES Act has been quick and thorough. But the state still needs to take bold action in other areas to blunt the damage the pandemic will do to the economic health of the people of Alabama.

State lawmakers should build on the federal UI improvements in the CARES Act by undoing recent harmful policy changes. Alabama’s UI system offers fewer weeks of coverage than most other states because of a 2019 law sponsored by Sen. Arthur Orr, R-Decatur.

Orr’s measure reduced the maximum number of weeks an Alabamian could claim UI benefits from 26 – the standard in most states – to somewhere between 14 and 20, depending on the unemployment rate. It conditioned five additional weeks of benefits on participation in job training programs, some of which are now shut down because of COVID-19.

The 2019 law tied the maximum number of benefit weeks to the unemployment rate. Because Alabama’s published unemployment rates were unusually low recently, the number of benefit weeks is set at the lowest level, 14 weeks. The COVID-19 pandemic shows that published unemployment rates lag behind the reality that tens of thousands of Alabamians experience during crises.

The coronavirus pandemic threatens to trigger economic suffering unlike anything most of us have seen in our lifetimes. Alabama should help jobless workers endure this downturn by boosting weekly UI benefits and removing harmful barriers to unemployment assistance. Repealing the 2019 UI limits and restoring the full 26 weeks of state-funded benefits would be a great start.

Untax groceries and protect funding for Alabama’s public schools

The sales tax on groceries is a cruel tax on survival. It drives struggling people deeper into poverty. Here’s why Alabama should end this tax – and how to do it:

  • Alabama is one of only three states with no tax break on groceries.
  • The state grocery tax is 4%, equal to two weeks’ worth of groceries each year.
  • Alabama should untax groceries quickly and responsibly. That means ending the state grocery tax now, not over several years. And it means replacing that lost revenue for education in a way that doesn’t harm struggling families.
  • Alabama can protect education funding by limiting or ending its state income tax deduction for federal income taxes (FIT). The FIT deduction is a skewed tax loophole that overwhelmingly benefits rich households.

Two promising ideas have emerged to untax groceries and protect education funding by closing the FIT loophole. Both plans would be a significant tax cut for a large majority of Alabamians:

  • The best approach would be to end the state grocery tax and eliminate the FIT deduction on both corporate and individual income taxes. This plan would replace the grocery tax revenue and raise more than $400 million a year for Alabama’s underfunded public schools.
  • Another proposal would end the state grocery tax and cap the FIT deduction. This plan would replace the grocery tax revenue but would not raise any additional money for public schools.

Bottom line

Untaxing groceries quickly and responsibly would boost economic security for all Alabamians. By closing the FIT loophole, our state could make life better for families and protect funding for public schools.

Alabama needs to expand Medicaid NOW!

Medicaid is a health lifeline for one in four Alabamians and an economic engine for communities across our state. Extending Medicaid coverage to adults with low incomes would make life better for Alabamians of all races, genders and incomes.

Medicaid expansion would ensure coverage for 340,000 Alabamians, including:

  • People who work low-wage jobs and can’t afford private coverage
  • Workers who are between jobs
  • Adults who are caring for children or older family members at home
  • People who have disabilities and are awaiting SSI determinations
  • Adult college students
  • Uninsured veterans

Medicaid expansion would help more Alabamians have:

  • Regular primary care and preventive checkups
  • Earlier detection and treatment of serious health problems
  • Regular OB/GYN visits without referral
  • Less dependence on costly emergency care
  • Better health and greater financial peace of mind

Medicaid expansion would bring our federal tax dollars home to support:

  • Healthier families, workers and communities
  • Stronger rural hospitals and clinics
  • Stronger community mental health and substance use disorder services
  • A needed boost in jobs and revenue for state and local economies

Bottom line

Medicaid expansion is the single biggest step we can take to move Alabama forward. It’s time to invest in a healthier future for our state and our people. It’s time to #CoverAlabama.

Fund public transit to improve lives

Alabama’s public transportation shortfall is hurting people, communities and the economy. Many seniors, people with disabilities, and people with low incomes rely on public transit to go to work, get to the doctor and run essential errands. But Alabama provides no state money to help meet those needs. Here’s why our state should make this investment in a stronger economy and better quality of life:

  • Alabama is one of only five states that provide no state funding for public transportation. All four of our neighboring states do.
  • Alabama leaves millions in federal matching funds on the table every year. The federal government can grant $4 for every $1 the state spends on buses. And federal funds can double state investment in operations.
  • Every $1 million spent on operations creates 50 jobs. These jobs provide good benefits and an average operator’s salary of more than $70,000.
  • Alabama’s public transit options are limited because of the lack of funds. No service in Alabama operates past 11 p.m., even on weekends. Rural van routes may be booked up weeks in advance. And Alabama has cities with more than 30,000 people where no general public transit option exists.
  • Seven rural hospitals have closed since 2011, and many others are at risk. These closures have increased the strain on rural public transportation by leaving many Alabamians farther away from health care facilities.

Bottom line

State funding for public transportation would expand opportunity and connectivity across Alabama. With a General Fund appropriation to the Public Transportation Trust Fund, our state could create jobs, fuel economic growth and help people get where they need to go.

A strong safety net means a stronger Alabama for all

We all know that people get down on their luck sometimes. They lose a job, have a sick child or need time to recover from an injury. And most Alabamians – understanding that “there, but for the grace of God, go I” – want to do what they can to help people going through a rough time.

The way that we, collectively, help our fellow Americans is through the safety net, a set of publicly funded services designed to help people meet basic needs when things get tough. Safety net programs include:

  • Food assistance through the Supplemental Nutritional Assistance Program (SNAP).
  • Health insurance through Medicaid or the Children’s Health Insurance Program (known as ALL Kids in Alabama).
  • Unemployment compensation.
  • Disability benefits.
  • Cash assistance through Temporary Assistance for Needy Families (TANF).

Attacks on the safety net in Alabama and other states

Some conservatives have been trying to cut the safety net at state and federal levels. During the 2018 Farm Bill reauthorization debate, the Foundation for Government Accountability (FGA) and other groups encouraged Congress to restrict hungry people’s ability to put food on the table. But these efforts failed, and SNAP emerged even stronger than before.

After this failure, opponents of the safety net turned their attention to the friendlier administrative rule process. They sought to force rules through the federal Departments of Agriculture, Housing and Homeland Security to cut food and housing assistance to marginalized people, including immigrant families.

Alabama Arise members and our state and national partners have submitted thousands of comments against these proposed changes. This advocacy has stopped or slowed some harmful plans, including the state’s proposed Medicaid work requirement. But the threats persist.

Another insidious attack on the safety net is happening in state legislatures across the country, including Alabama. While Medicaid and SNAP operate largely by federal rules, states have some discretion in how they design their programs. This discretion is called “state options” in SNAP.

Groups like the FGA have combed through the choices states have made in these state options. They have written “model” state legislation that would force states to select the most restrictive options allowed under federal law. Some of these bills are crafted to sound “reasonable” to legislators and to the general public. But together, they are designed to cut millions of struggling people off from the help they need.

Barriers to food and health care for struggling Alabamians

Since 2016, Arise has fought successfully against harmful barriers that would keep struggling Alabamians from getting the help they need. And we’re geared up to continue that fight for years to come. Here are a few of the damaging legislative proposals we expect to see again:

  • Stigmatize SNAP and TANF participants by requiring some of them to be tested for illegal drugs. States that implemented this approach have found it expensive and ineffective, with few participants testing positive. The plans would deny assistance to people who refuse a drug test or fail a drug test more than once. But they would not guarantee those participants get treatment for substance use disorders.
  • Prohibit Alabama from requesting a waiver of time limits for a small class of SNAP participants called able-bodied adults without dependents (ABAWDs). New federal rules already severely restrict these waivers, and the governor should have the authority to respond to an economic or environmental crisis by ensuring affected Alabamians can get the food they need during bad times.
  • Impose work requirements on SNAP participants who are not already working and who are not seniors or people with disabilities. This proposal would end Alabama’s very promising volunteer job training and employment assistance program for SNAP participants. Instead of getting the real job training they need, SNAP participants would be forced either to engage in less effective job search programs or to lose food assistance their families desperately need.
  • Require participants in “public benefits” to engage in community service at schools, nonprofits or other places. This could cut off assistance to hundreds of thousands of Alabamians who cannot jump through complex administrative hoops. It also would be time-consuming and expensive for participating agencies.

Other costly, harmful proposed administrative barriers

  • Require a photo ID to buy groceries using an Electronic Benefit Transfer (EBT) card for SNAP. This would be a tremendous barrier for seniors, people with disabilities and other Alabamians with transportation challenges. It would require store clerks to learn complex federal rules about who is allowed to use SNAP benefits. And it would slow down grocery store checkout lines for everyone.
  • Impose an asset test on applicants for SNAP food assistance. Alabama ended asset tests for SNAP because they were complex, time-consuming and expensive to administer, especially for seniors. They also rarely identified anyone too wealthy to be eligible for assistance.
  • Impose complex, duplicative and costly verification of income and assets for Medicaid, SNAP or TANF. This would slow down the processing of applications and deny or delay essential health and nutrition services for eligible people.
  • Require SNAP applicants to “comply” with child support orders or seek child support from the other parent before receiving food assistance. Cutting food assistance for families behind in child support does nothing but make children hungrier. And cutting assistance to a parent who has not demanded child support may force victims of domestic violence or child abuse to choose between their safety and their next meal.

The bottom line

All of these harmful ideas would make life harder for struggling Alabamians. Several proposals also would force agencies to pay millions of dollars to private firms that operate verification and client tracking functions now performed by state employees. Most importantly – and most troublingly – these proposals would increase the number of sick and hungry people in Alabama.

Alabamians deserve shared prosperity and inclusion, not increased human suffering and isolation. That is why we oppose cuts to Medicaid, SNAP, TANF and other programs that help people reach their full opportunity. Arise’s members rose to this challenge during the Farm Bill debate and in response to harmful federal rule changes. And we know you will continue to help protect the safety net that protects all Alabamians when times get tough.

The new poll tax: Court debt and voting rights in Alabama

Everyone should be able to have a voice in governmental decisions that affect their daily lives. Voting is the most straightforward way Alabamians have to shape those decisions. But our state has a long, sad legacy of voter suppression tactics. As a result, Alabama today has more disenfranchised citizens than California, a state with eight times the population.

More than 280,000 Alabamians – one of every 13 otherwise qualified citizens in the state – have had voting rights stripped away by the state’s anti-democratic voting limitations, according to a Sentencing Project survey. And Alabama’s history of wielding voting restrictions more heavily against black people remains a problem, even decades after passage of the Voting Rights Act. Voting barriers still deny the franchise to one out of every seven black citizens in Alabama today.

Felon disenfranchisement’s racist origins

The states with the most hostile policies on voting rights fit a predictable historical pattern. Seventeen states – none of which were in the Confederacy – restore voting rights automatically to all people upon release from prison. Two other states outside the South, Maine and Vermont, disenfranchise no otherwise qualified citizens, even if they are incarcerated. Meanwhile, states that fought to maintain slavery constitute more than half of the states that still impose permanent disenfranchisement for some people with a felony conviction.

This is no coincidence. Alabama’s voter disenfranchisement practices have their roots in post-Reconstruction politicians’ efforts to avoid the 15th Amendment’s ban on explicitly race-based voting rights restrictions. Instead of directly prohibiting black people from voting, many Southern states erected barriers to voting for people convicted of crimes. Officials then set to work convicting large numbers of black people – often at trials lacking due process – with the intent of taking away their voting rights.

A series of voting barriers

The president of Alabama’s 1901 state constitutional convention openly said delegates’ goal was to establish white supremacy to the extent that the U.S. Constitution would allow. With the 15th Amendment outlawing explicitly race-based restrictions, the convention sought other methods to bar black people from voting.

For decades, Alabama officials required poll taxes and literacy tests for people registering to vote. To reduce the number of disenfranchised white voters, the convention exempted people whose ancestors were U.S. or Confederate military veterans. Black people largely had been barred from military service to that point in history.

For black citizens able to get through these barriers, a catch-all provision allowed the state to bar people from voting due to a conviction for undefined “crimes of moral turpitude.” Officials stripped voting rights from people convicted of minor crimes, including vagrancy and writing bad checks.

These manufactured convictions further entrenched the Jim Crow system for decades. They denied voting rights to hundreds of thousands of black Alabamians. And they forced many into convict leasing systems – effectively slavery by another name.

Modern voting restrictions yield similar results

Federal law has outlawed many but not all of these voting barriers in recent decades. The 24th Amendment prohibits poll taxes in federal elections, and the U.S. Supreme Court has barred them in state elections as well. In 1965, Congress stopped states from using literacy tests to attack voting rights. As a result of these changes, today the widespread use of criminal convictions and their associated costs to disenfranchise citizens is one of the largest remaining policy obstacles to voting rights.

These barriers still harm black Americans at a far higher rate than the general population. Thirty-eight percent of disenfranchised Americans are black, according to the Vera Institute for Justice, though only 13% of the population is black. And the sentiment that voting is a privilege, not a right, still festers in too many places.

Even in states that have taken active steps to fix their anti-democratic voting laws, progress has met resistance. For example, Floridians overwhelmingly voted to restore voting rights to nearly all people with a felony conviction in 2018. But the Florida Legislature responded with a law requiring people with such a conviction to pay all outstanding fines and fees before their voting rights are restored. Advocates have scrambled to address this problem, and a federal lawsuit is still ongoing.

How Alabama can carve a new path on voting rights

Alabama has made progress on breaking down barriers to voting, but there’s plenty of work left to do. The Definition of Moral Turpitude Act, passed in 2017, codified the offenses considered to be “crimes of moral turpitude.” Before then, local election officials often differed on which felonies disqualified an otherwise eligible citizen from voting. That created a web of confusion, with eligibility determined not on the basis of the offense but of which county someone called home.

Ending this inconsistency was a good start toward strengthening voting rights in Alabama. A meaningful next step would be to remove the financial limits that disenfranchise struggling people across our state.

Inability to repay court fines and fees is a harsh barrier that denies voting rights to thousands of otherwise eligible Alabamians who already struggle to make ends meet. Citizens’ right to vote shouldn’t come with conditions, restrictions or asterisks. People shouldn’t have to jump through a series of bureaucratic hoops to regain voting rights. And the color of a citizen’s skin shouldn’t predict a lesser likelihood of that person’s ability to cast a vote.

Alabama’s maze of hurdles to exercising voting rights is needlessly cruel and divisive. Our state needs to move beyond its troubled past on voting rights and into a future where every Alabamian can participate in democracy without unnecessary barriers. One significant step toward voting rights for all would be to change state law to ensure that the right to vote is never conditioned on someone’s ability to pay money.

Criminal justice debt: A modern-day debtors’ prison

By Carol Gundlach and Dev Wakeley, policy analysts

It is unconstitutional to jail a person in the United States just because he or she owes money. But Alabama has no process for courts to determine if a defendant can afford to pay fees and fines. And despite a prohibition on “debtors’ prisons,” thousands of Alabamians are in danger of going to jail or are driven further into poverty because they can’t afford to pay costs attached to the criminal justice system. These costs include:

  • Bail bonds and related fees to avoid incarceration before trial.
  • Fines and docket fees in criminal cases.
  • Drug testing and extra fees surrounding drug-related convictions.
  • Fees charged for every day spent in jail.
  • Fees for use of the court system.
  • Probation or parole supervision fees.
  • Fees when assigned a public defender.
  • Fees to enter a diversion or community corrections program.
  • Court costs and other fees for speeding tickets and other driving citations.
  • Fees to reinstate revoked driver’s licenses.
  • Higher insurance costs when a certificate is required upon license reinstatement.
  • Interest and penalties for late payments.
  • Fees for paying fees in installments.

What is the scope of this issue?

Criminal justice debt can add up. A 2014 survey by TASC, Jefferson County’s community corrections program, found 90% of participants owed court debt that averaged $7,885. Court costs, fines and fees for a conviction for possession of 1 ounce of marijuana in Shelby County could total at least $2,611, the Public Affairs Research Council of Alabama (PARCA) estimated in a 2014 study. Probation fees in the case could add an extra $960, and driver’s license restoration would add another $300.

These obligations often lead to incarceration and higher debt. In much of Alabama, someone who falls behind in court or probation payments can be incarcerated for failing to make required payments. TASC’s survey of community corrections participants found 18% had been jailed for failure to pay fees or fines. PARCA found 59% of attorneys surveyed had at least one client who had been jailed because of debt. A person who fails to make timely payment on court debt faces late charges and collections charges of as much as 30% in addition to the original debt.

People hit hardest by criminal justice debt are likely to be young and have low incomes. Four out of five people charged with crimes are indigent. TASC’s survey of community corrections participants found respondents had a median annual income of only $8,000. Nearly 30% of those surveyed had no income at all.

Who gets hurt by these debts?

Criminal justice debt acts as a particularly harsh tool of oppression against people of color. Many of the worst abuses of the practice in Alabama have occurred in places with large black and Latino populations.

These debts also divide communities. While some Alabamians with a past felony conviction can get their voting rights restored, they first must complete their sentence, including payment of all court-ordered fees and fines. Inability to pay can result in denial of voting rights and weaker ties to community institutions. Mounting debt also can prompt cynicism about a system seen as preying on people in poverty.

Criminal justice debt hurts individuals and their families. Sixty percent of people surveyed by TASC said they had to choose between paying fees and fines or for necessities like utilities, groceries and housing. These debts also harm children and other family members. Forty percent of people surveyed by TASC had children in the home who suffered from parents’ inability to pay for necessities.

These financial obligations can make it much harder for people convicted of a crime to get back on their feet. Credit ratings can be ruined when a missed payment is reported to a credit bureau. More than half of people surveyed by TASC lacked a car, a license or auto insurance. And people facing jail because of debt can fall into the trap of predatory lending.

Why are there so many fees?

Alabama has come to rely heavily on criminal justice debt to fund courts and other services. One reason criminal justice debt is so severe in Alabama is the state’s failure to fund its court system adequately. State revenues declined sharply during the Great Recession and still have not fully rebounded. Largely unwilling to increase taxes, the Legislature instead has cobbled together budgets overly dependent on one-time money and user fees. General Fund support for the Unified Judicial System fell from $125 million in 2003 to $88 million in 2018, adjusted for inflation. Court fees replaced much of that lost revenue.

Circuit clerks collected $154.8 million in fees and fines in 2013, PARCA reports. Municipal courts collected an unknown additional amount. More than half the fees went to court operations. Another 47% supported other entities, including jails, sheriffs, local governments, law libraries, district attorneys and court clerks. Courts struggle to collect much of what is owed. Fewer than half the fees and fines ordered are actually collected.

Local legislation has allowed counties and cities to impose their own fees and fines. Alabama’s constitution limits local taxing authority and gives much of that power to the Legislature, which is often more willing to pass user fees than local taxes. The Legislature has passed more than 400 local court fees since 1977, PARCA found. Most fund court operations, but some support government activities unrelated to courts. These acts have resulted in an arbitrary patchwork of court costs in different localities.

How can we solve the problem?

Alabama’s criminal justice debt problem has a host of potential solutions. One big step would be to overhaul the state tax system to fund courts adequately. This would end overreliance on fees that hold many struggling Alabamians back and that often never can be collected.

Short of that systemic change, the Legislature could implement many other helpful reforms. These would range from improvements in court procedure to elimination of some fees. Here are a few meaningful changes Alabama could make:

  • Require courts to consider a defendant’s ability to pay fees and fines and standardize a process for that determination.
  • Create a cap and a sliding scale for fees and fines, based on ability to pay.
  • Consider all financial obligations in ability-to-pay determinations.
  • Eliminate cash bail for most misdemeanors.
  • Forgive payment of fees upon acquittal or dropping of charges.
  • Require reasonable and fair payment plans based on ability to pay.
  • Prohibit incarceration for failure to pay a criminal justice debt.
  • Determine the degree of and remedy racial disparities in criminal justice debt.
  • Allow and encourage courts to use reasonable alternatives to monetary sanctions, such as community service or treatment programs.
  • End driver’s license revocations and suspensions for offenses unrelated to driving, such as drug crimes or missed court dates.
  • Reduce or eliminate fees for reinstatement of a suspended or revoked driver’s license.

People deserve a chance to participate in society without painful, unreasonable fines and fees dragging them down. Alabama’s criminal justice system needs system-wide reform to give thousands of people that fair chance.

Injustices remain in Alabama’s death penalty practices

Alabama took an important step toward death penalty reform in 2017, but numerous problems remain. That year, the state finally outlawed judicial override in capital cases. That change means judges no longer can impose the death penalty when a jury recommends life without parole. But the ban was not retroactive, and 35 people who were sentenced that way remain on death row. Remedying that omission is one of several key reforms that would bring Alabama’s capital punishment system in line with national standards and federal court rulings.

Americans increasingly oppose the death penalty. Gallup found that opposition to the death penalty more than doubled in the past 25 years. This may result from error rates in the system. For every 10 people executed since 1976, one innocent person on death row has been set free.

Alabama’s death penalty scheme has failed to keep up with reforms in the rest of the country. The state doesn’t have to prove a defendant was at least 18 years old at the time of the crime. State law also gives insufficient protection against executing people with certain mental disabilities. U.S. Supreme Court precedent is the sole authority preventing executions of defendants with IQs below 70.

An increasing number of states are abandoning capital punishment. Most recently, Washington’s state supreme court barred the death penalty in 2018 because of racial bias and arbitrariness in its administration. In Alabama, people convicted of killing a white victim are more than four times more likely to get a death sentence than people convicted of killing someone who is not white, the Equal Justice Initiative found in 2011. And Alabama has more people on death row per capita than any other state that performs executions.

How to reform Alabama’s death penalty system

Ending judicial override in future cases was an important first step toward fixing a broken system. But other recent changes have aimed to protect that system, not fix it. In 2018, the Legislature authorized a backup execution method, nitrogen hypoxia, in case courts rule lethal injection unconstitutional. This new execution method would kill prisoners through suffocation.

Efforts to protect the state’s ability to conduct executions are misguided. Instead of entrenching an unjust system, Alabama could enact numerous reforms to reduce the unfairness of its death penalty practices. Those changes include:

  • Make the judicial override ban retroactive.
  • Require unanimous agreement from the jury to sentence people to death.
  • Amend state law to require prosecutors to prove a defendant was 18 or older at the time of the crime.
  • Amend state law to forbid executions of people who have serious cognitive impairments.
  • Impose a moratorium to study and end racially biased death penalty practices.
  • Ultimately eliminate capital punishment.

Alabama should implement these steps to reduce and eliminate the unequal, unfair practices present in the state’s death penalty scheme. Alabamians deserve a fair, unbiased justice system, and these reforms would be steps toward a more just state.