Speaker’s Press Clips
Tuesday, February 3, 2015
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Al.com: Citing $700 million hole, governor tells legislators, business leaders he will
propose tax increases
Montgomery Advertiser: Same-sex marriage would cause ‘confusion,’ says Ala. AG
Wetumpka Herald: Legislators: Charter schools offer best opportunities to students
Tuscaloosa News: Tuscaloosa area lawmakers: Budget woes to dominate legislative
session
Al.com: Governor Bentley: Projects like I-10 bridge should not come from regular
transportation funds
Dothan Eagle: Report cites weaknesses in Alabama teacher retirement program
Birmingham Business Journal: Alabama Power sparks workforce development through
community college partnerships
Al.com: Eminent domain in Alabama is on the rise; what's the risk?
Al.com: Christian Coalition of Alabama exec James Henderson resigns to focus on new
'sanctity of life' PAC
Al.com: Auburn University garners spot on Business Insider's '50 Most Underrated
Colleges in America'
Al.com: UAH ranks among most underrated colleges in the country as grads make high
salaries
Opelika-Auburn News: Community invited to witness planting of new oak trees on
Valentine’s Day
Yellowhammer News: Byrne bill becomes conservatives’ ObamaCare repeal weapon of
choice
Al.com: Mississippi Choctaws reopen Golden Moon casino to stave off decline, compete
with Wind Creek
WSFA: Univ. of West Alabama proud of former player Malcolm Butler
AP: Gap between rich and poor students who graduate college growing
CNN: Net Neutrality Update: FCC seeks to change how high-speed Internet is regulated
Politico: Obama's 10 new taxes
FULL TEXT
Citing $700 million hole, governor tells legislators, business leaders he will propose tax
increases
Al.com
February 2, 2015
Brendan Kirby
One way or another, higher taxes are on the way in Alabama, Gov. Robert Bentley suggested
Monday in Mobile.
Speaking to state legislators and business leaders at a Mobile Area Chamber of Commerce
luncheon, the governor gave his most forthcoming remarks to date about the need for additional
tax revenue to plug a looming shortfall in the budget that pays for non-education expenses like
prisons, Medicaid and public safety.
"I'm going to do some bold things, folks," he said, adding that when it comes time to ask the
people of Alabama in a few months for more revenue, "It's going to be my job. They're going to
look at me."
In the past, Bentley has talked about eliminating deductions without offering specifics. He told
reporters Monday that he is not ready to make public a specific proposal. When he does, he
added, he expects changes.
"I will propose what has to be raised," he said. "But whenever I send over a budget, they always
change things."
But Bentley told the luncheon gathering that he and lawmakers agree that more revenue is
necessary.
"We are all going down the same stream," he said. "We might not be in the same boat yet."
The governor has pegged the hole at $700 million. That would close the actual gap - estimated at
a minimum of $250 million - and allow the state to pay back money borrowed from rainy day
accounts and stop using taxes dedicated to the Department of Transportation and the Education
Trust Fund that currently are being diverted to prop up spending in the General Fund.
Bentley's remarks caught some lawmakers off-guard.
"I was shocked to hear him say that. He doesn't like to use the word taxes," said state Sen. Vivian
Davis Figures, D-Mobile. "I'm very excited to know he is at least looking at it. And I'm hoping it
will be tax reform."
"I was shocked to hear him say that. He doesn't like to use the word taxes." -- State Sen. Vivian
Davis Figures.
Figures said some out-of-state corporations manage to avoid paying any taxes to Alabama by
taking advantage of myriad loopholes. She said the state needs to examine the many deductions
and exemptions that lawmakers have built into the tax code over the decades without ever reexamining them.
Republican legislators in the room treaded more cautiously.
"I don't know what he has in mind," said Rep. Randy Davis, R-Daphne. "Probably 75 percent of
the Legislature ran on no new taxes."
Davis said deductions and loopholes likely will be on the table, along with outside-the-box ideas
like negotiating a gambling compact with the Poarch Band of Creek Indians. Davis said cutting
even $250 million would be extremely difficult given that prisons and Medicaid - both virtually
un-cuttable - comprise about 60 percent of the General Fund.
"We have cut. We have consolidated. We have a significant number of employee vacancies," he
said.
Rep. Chris Pringle, R-Mobile, said complaints over insufficient revenue have been a feature of
state government since his first stint in the Legislature in the 1990s.
"I've learned never to comment on a bill I haven't read yet," he said. "You cannot raise enough
revenue to fund government the way everyone wants to. ... Government always grows. It's
insatiable."
State Sen. Greg Albritton, R-Range, said he looks forward to hearing details of the governor's
proposal. Pointing to recent stronger economic growth, he also suggested that the fiscal picture
might not be as bleak.
"Historically, it's been difficult for me to support (higher) taxes," he said. "I don't think it's as
dire as it sounds."
Rep. Harry Shiver, R-Bay Minette, said he does not like the idea of raising taxes.
"But I don't know how I'd vote because we have to get out of this mess," he said. "We've kicked
the can down the road so long, we've outkicked our coverage."
Bentley told reporters that he is targeting tax deductions and "unequally paid taxes" as he crafts a
proposal for the Legislature. He said state government has put off the problem for too long. The
best time to address it is at the beginning of a four-year term, he said.
"If we don't fix the budget this time, the changes to fix it in the long term are pretty slim,' he said.
+++
Same-sex marriage would cause ‘confusion,’ says Ala. AG
Montgomery Advertiser
February 2, 2015
Brian Lyman
Alabama would face “uncertainty, confusion and conflict” if a federal appeals court allows samesex marriage to move forward, a brief from the attorney general’s office argued Monday.
The 12-page filing seeking a stay of U.S. District Judge Ginny Granade’s decisions over the last
10 days striking down the state’s ban on the practice argues that controversy in the state over the
measure suggests there would be trouble implementing the decision.
“Resolving this kind of conflict and eliminating this kind of confusion is the very reason for
appellate review, and it is why such judgments have been stayed in other circuits until the court
of appeals could rule,” the filing said.
The brief asks the court to block Granade’s decision until the U.S. Supreme Court rules on the
constitutionality of same-sex marriage. The nation’s highest court is expected to issue a decision
by the end of June.
Granade struck down the state’s bans on Jan. 23 in a case involving a Mobile couple, Cari Searcy
and Kimberly McKeand, who married in California. The couple wanted Searcy to adopt
McKeand’s son, but was denied under the state ban. Searcy and McKeand sued, saying the ban
violated their equal protection and due process rights under the 14th Amendment. Granade
agreed, saying the state had failed to advance a reasonable argument in support of the
restrictions.
In a second case on Jan. 26, Granade ruled that the ban unconstitutionally denied a second
Mobile couple the right to properly take care of their legal affairs. The couple, James Strawser
and John Humphrey, had sought to give Humphrey power of attorney to assist Strawser’s mother
should Strawser die from complications invovling a risky surgery.
The judge has stayed both rulings until Feb. 9 to allow the appeal to go forward. Attorneys for
Searcy and McKeand argued in a filing last week that it would be “irrational . . . to force this
family to wait any longer to solidify the safety, dignity and standing of their family.” The couple
also suggested that not recognizing their marriage would expose their children to stigma.
Attorneys for Alabama Attorney General Luther Strange argued in their brief that that the harms
the plaintiffs would experience were “highly speculative,” and that the couple would not be
adversely affected by a stay.
“Even assuming a judicial decision can eliminate ‘stigma,’ that kind of societal change is highly
unlikely to occur in the five months between now and when the U.S. Supreme Court rules,” the
brief said. “It is thus no reason to deny the motion to stay.”
Strange’s attorneys also cited potential “confusion” should the law go into effect, citing the
Alabama Probate Judges Association’s recent about-face on the issue of marriage licenses and
Alabama Chief Justice Roy Moore’s condemnation of Granade’s decision. The APJA initially
said on advice of counsel that it could not issue licenses if the law went into effect, saying the
decision was not clear. Granade, at the request of plaintiffs, issued a clarification of her order last
week that specificed that her ruling, if upheld, would apply to every state official in the state. The
APJA then reversed its stand.
Moore has insisted that the Alabama Supreme Court is not bound by decisions made by federal
district or appellate courts, and suggested last week probate judges who issued same-sex
marriage licenses were breaking the law. The Southern Poverty Law Center has filed an ethics
complaint over Moore’s remarks arguing, among other items, that Moore’s stand violated his
oath to uphold the U.S. Constitution.
Strange’s brief also suggested that the plaintiffs would be required to define marriage in the
absence of the 1998 law and 2006 constitutional amendment at the heart of the case. Attorneys
for Gov. Robert Bentley suggested last week that Granade would also have to do so to prevent
confusion in the state.
+++
Legislators: Charter schools offer best opportunities to students
Wetumpka Herald
February 1, 2015
Adam Powell
National School Choice Week 2015, which ran from Jan. 25 to Jan. 31, was marked with a rally
in Montgomery Wednesday at the Capitol.
Students as well as education and community leaders descended on the capitol building in an
effort to gain support for a school choice bill.2/3/2015 Legislators: Charter schools offer best
opportunities to students | The Wetumpka Herald
Many of Alabama’s Republican lawmakers, including those representing Elmore County, favor
such a bill to allow for charter schools in the state.
State Rep. Mike Holmes (R-Wetumpka) believes the possibility of charter schools could be a
boon for Elmore County, as well as Alabama as a whole.
“Charter schools are definitely something we need to look at,” he said. “I think it’s a good idea in
order to get the best opportunities for our students.”
Holmes noted the recent dismal ACT Plan scores in Elmore County and said that something had
to be done to improve the level of education students in Elmore County are receiving.
“Those numbers were frightening,” Holmes said. “The whole state is frightening, but Elmore
County in particular.”
Charter schools are schools that receive public funding, but operate independently from the
established public school system they are located in.
Alabama’s Accountability Act has already provided students with the option of moving from
failing public schools to private schools or better public schools.
Many believe charter schools will simply add another option for parents of students zoned for
failing schools.
Holmes said that there are two bills being prepared, one in the House and one in the Senate, that
would establish roughly 10 charter schools across the state over the coming years.
Though he stated that he doesn’t believe charter schools will have a negative impact on public
schools, Holmes
said that state funding for charter schools would likely be diverted from failing public schools.
Sen. Dick Brewbaker (R-Montgomery) agrees, but added that the diversion of money is more
complicated than it seems.
Brewbaker noted that public schools receive funding on a per student basis, therefore if a student
leaves a public school the state’s funding goes with them.
“Charter schools are a way to give all of our students the chance to choose,” Brewbaker said. “I
think, especially in light of the recent ACT scores, the more options we can give parents in
educating their children the better.”
While Brewbaker supports the addition of charter schools to the state with the stipulation that
they be overseen by local school boards.
Brewbaker does not believe the introduction of charter schools will have a negative impact on
public schools, either.
“That’s idiotic, unless you’re going to argue that magnet schools take money from public
schools, too,” he said.
“The idea that adding another kind of public school would damage other public schools is just
silly.”
Rep. Reed Ingram (R-Pike Road) agrees.
“I think it’s something we ought to explore,” he said. “I don’t think it’s something I’m 100
percent on, it just depends on how it’s written.”
Ingram said that there is need for help in education across the state, noting high drop out
numbers and low test scores.2/3/2015 Legislators: Charter schools offer best opportunities to
students | The Wetumpka Herald
“We’ve got some really good teachers and some really good schools,” he said. “I just think we
need to make some changes.”
Elmore County Public Schools Superintendent Dr. Andre Harrison had little to say on the topic.
In an email, Harrison said that he could not comment on whether or not he supported a bill
bringing charter schools to Alabama, nor could he comment on whether or not they would have a
negative impact on public schools, until a bill was presented.
“I would like to see adequate funding of public schools first,” he said. “That begins with funding
the SDE (Staff Development for Educators) foundation program first.”
Dr. Greg Graves, associate executive secretary for the Alabama Education Association, sees
multiple problems with a proposed charter school system.
“What they’re offering is a choice, but no one has said it’s a better choice,” Graves said. “So
they’re going to take funds from an already strained budget to offer choices that may not be any
better than what we already have.”
In Graves’ opinion, the best route forward would be to open lines of dialogue between public
school proponents and state legislators, then implement the best parts of the charter school
program into the ailing public school system.
Graves also worries about competition between “educational entities who will essentially
seeking the same goal.”
“Taking money to give to a system that hasn’t shown to be any better is a bad idea,” he said. “It
would be better to repair the system we already have.”
Graves noted that many people get hung up on the word “choice.”
“I don’t blame parents for wanting more choices for their children,” he said. “But when you give
people a choice, they are going to assume it’s going to be better, and that just hasn’t been
proven.”
Ingram admitted that there is a possibility that the implementation of charter schools may take
funds away from traditional public schools, but a lot of that would be contrasted by the fact that
there would be fewer students, teachers and administrators in those schools, thus the price tag
would be lower.
“I don’t think it’s really going to be taking anything away,” he said. “I think it’s more of a fear
factor.
“The students’ education needs to come first. I’m all about supporting our personnel, but the
student has to come first.”
+++
Tuscaloosa area lawmakers: Budget woes to dominate legislative session
Tuscaloosa News
February 2, 2015
Ed Enoch
Members of Tuscaloosa's legislative delegation at a local forum Monday reiterated predictions
that state lawmakers face a challenging 2015 regular session characterized by debates over how
to address shortfalls in the state General Fund.
“It is going to be a very exciting session because we are going to deal with social issues, fiscal
issues and education ... ” said Rep. Christopher England, D-Tuscaloosa.
State Sen. Gerald Allen, R-Cottondale, predicted lawmakers would face the General Fund
shortfall, charter schools legislation, health care and reform of the state's overcrowded prison
system.
The lawmakers discussed the upcoming legislative session, which begins in early March, on
Monday at Central High School as part of the League of Women Voters' “Meet Your Legislators
Night.” The event was co-sponsored by the League of Women Voters of Greater Tuscaloosa, the
Osher Lifelong Learning Institute, the University of Alabama Retirees Association and the
Tuscaloosa alumnae chapter of Delta Sigma Theta sorority.
England and Allen were joined by Rep. Bill Poole, R-Tuscaloosa; and freshmen Reps. Rich
Wingo, RTuscaloosa, and Rep. Kyle South, R-Fayette.
The lawmakers fielded questions provided by the moderator and the audience. The topics ranged
from questions about the budgets and an expansion of Medicaid to their opinions about predatory
lending legislation and a cost-of-living increase for retired state employees.
The shortfall facing the state in its General Fund for the 2016 fiscal year ranges from roughly
$260 million to more than $700 million, according to the lawmakers.
South speculated the session, and any budget debates, would be characterized by the question of
adequately funding prison reform and the state's Medicaid program.
“I think the theme for the night and maybe the session is the General Fund,” South said. “The
prison reform goes right in hand in hand with that.”
The challenge for lawmakers will be reaching compromises to increase revenues, according to
the panel.
England noted new tax changes will require statewide referendums to change the Alabama
Constitution.
“I think that will limit some of the options that will be presented,” he said.
England and Poole predicted the lawmakers and the governor might pursue targeted measures,
such as fee increases, that can be passed by the Legislature without a referendum.
“Looking at the lay of the ground and the attitude toward taxes, it is going to be very difficult to
raise
$700 million,” Allen said.
He said he was prepared to vote on an increase to the state tobacco tax, estimating the move
could raise as much as $75 million.
England predicted ongoing negotiations throughout the session on the budget. “What I think will
happen will be a very difficult negotiation between the executive branch and the legislative
branch ... ” he said.
While Poole believes state leaders have helped mitigate the problem by pursuing efficiencies,
costs savings would not be enough, he said. “You can't close the gaps with cuts alone.”
He said he doesn't anticipate broad-based tax increases.
“It is going to be a very interesting debate. It is going to be controversial, it is going to be
uncomfortable,” Poole said.
During the upcoming session, Poole and Allen said the debate is unlikely to include a merger of
the General Fund and the Education Trust Fund. Poole was optimistic about the education budget
based on tax revenues so far for the fiscal year.
The lawmaker advocated for systemic changes for the state's prison systems meant to ease
overcrowding by finding alternatives to incarceration for nonviolent offenders and aid for former
inmates returning to the community.
England argued the debate must evolve from being tough on crime to being smart on crime. “Our
proposals in the upcoming session will not be easy proposals.”
The lawmakers generally reflected party lines on the question of an expansion of Medicaid under
the Affordable Care Act.
England supported the move, while the Republicans followed a similar tack as Gov. Robert
Bentley, who said he would consider the option with certain conditions after originally opposing
the move as unsustainable for the state.
The lawmakers expressed support for further investments in the state's pre-kindergarten program
and qualified support of cost-of-living increases as long as the measures are responsibly funded.
Poole said the challenge before lawmakers remains funding cost-of-living increases.
“The health of the retirement system right now is not where it needs to be,” he said.
+++
Governor Bentley: Projects like I-10 bridge should not come from regular transportation
funds
Al.com
February 3, 2015
Brendan Kirby
A new bridge connecting Mobile and Baldwin counties had been a top priority for local officials
for more than a decade, and Alabama Gov. Robert Bentley made a commitment to them
Monday.
"Before I leave office in four years, the only thing holding us back from doing the I-10 bridge
will be money," he said.
Even if the proposed bridge clears all of the substantial regulatory hurdles, that money obstacle
will remain a doozy. The federal Highway Trust Fund is nearly broke, and the local match on a
bridge projected to cost nearly $1 billion would consume a large chunk of the state's
transportation budget.
In remarks to a luncheon of the Mobile Area Chamber of Commerce at the Renaissance Mobile
Riverview Plaza Hotel downtown, Bentley reiterated testimony he gave before a U.S. Senate
committee Wednesday.
Bentley said projects of "regional and national significance ... should not come out of our overall
money."
Bentley's idea is for the federal government to set aside funding for such projects that states
could seek in grants. He said U.S. Sen. Barbara Boxer, D-Calif., noted during the hearing that
some governors might not like the idea of competing for transportation funding.
"We're never afraid of competition," he said he told her in reply.
Bentley said it is important for the federal-state partnership on transportation to continue. He said
flexibility is crucial and added that he is "totally opposed to earmarks," which dictate funding for
specific projects.
But the biggest issue is finding new revenue, he said.
"Certainly, right now, any large project is in jeopardy because of funding," he told reporters.
The chamber audience, he said, "We need certainty. Certainty is our problem."
Bentley touched on a number of other local topics Monday. He said he is eager to see the first
jets roll off the assembly line at the Airbus plant under construction at the Mobile Aeroplex at
Brookley.
"It had a lot to do with the fact that they had a relationship with Mobile," he said. "I don't think
they would have come to any other city in the United States."
Bentley said that the state would be hosting conventions at a new facility in Gulf State Park by
the time he leaves office.
The governor vowed to continue working with southwest Alabama lawmakers to craft a solution
to rising homeowners insurance rates, although he offered no specifics.
"That is a real problem for real estate," he said. "It's a real problem form homeowners. It's a real
problem for the average worker in this area."
Bentley said he would appoint a health care task force. When state Sen. Vivian Davis Figures
told the governor that the task force needed diversity, he said, "I don't look at color. I believe that
everybody is an Alabamian."
+++
Report cites weaknesses in Alabama teacher retirement program
Dothan Eagle
February 2, 2015
Jim Cook
A recent report gives Alabama a C minus for its teacher retirement program, criticizing the state
for having too much in unfunded liabilities and not making teacher’s retirement savings more
portable.
The National Council on Teacher Quality recently released the report evaluating teacher pension
programs in all 50 states. Alabama’s grade of C minus was the average for most states. Alaska
got an A for its program and Mississippi got an F.
Sandi Jacobs, vice president and director for state policy, said Alabama’s retirement program for
teachers – the Teacher’s Retirement System - is only about 66.5 percent funded.
“It’s best to be fully funded,” she said. “But anything in the 90s is solid.”
The program has about $9.5 billion in unfunded liabilities. Jacobs said for every dollar the
system takes in, 11 cents is put toward future obligations and 89 cents are used to cover
obligations to current retirees.
Jacobs said another problem with Alabama’s retirement program for teachers was that it takes
too long for teachers to become vested. The program requires that teachers work for 10 years
before being able to draw a pension. Jacobs said with a growing number of workers transitioning
in and out of teaching instead of making it a lifetime career, the 10-year vesting period was
unfair.
Jacobs also criticized the lack of portability for teachers’ retirement savings if they leave the
profession before they become vested. Jacobs said that while teachers could take the money they
contributed to their retirement with them, employer contributions stayed with the state.
Jacobs said the state needs to work toward having a fully-funded plan and also offer teachers
more portability, including the option of a 401k style defined contribution plan, rather than a
defined benefit plan like the pension system.
+++
Alabama Power sparks workforce development through community college partnerships
Birmingham Business Journal
February 2, 2015
Ryan Phillips
As Alabama looks to fill gaps in its workforce, community colleges are playing an increasingly
large role.
In many cases, businesses are taking a proactive approach to bridge the gap – partnering with
community colleges to create a tangible talent pipeline. It's an issue we'll be exploring in this
week's Cover Story, which was sparked by President Obama's recent proposal for two free years
of community college.
Alabama Power is one company that has embraced an active role in the state's community
college system.
Michael Sznajderman, a spokesman for Alabama Power, said the company has relationships with
Bevill State Community College in Walker County, Lawson State Community College, both
campuses of Jefferson State Community College and Wallace Community College in Dothan.
"We have been involved for many years in providing workforce development-related support to
community colleges and other educational institutions around the state," he said in an interview
with the BBJ. " This can take many forms – either through corporate financial support or grants
provided by the independent, nonprofit Alabama Power Foundation to support community
college programs; or by our participation in regional workforce councils or on college advisory
committees."
In metro Birmingham, the company works with Lawson State Community College by supporting
its advanced automotive training program. Sznajderman said that includes funding the
installation of electric vehicle charging stations on the campus. He said the chargers are used in
that program as they train students to work on electric vehicles.
This partnership has also paid dividends for the students at the community college, he said.
"Our electric transportation group has also held workshops there, and has provided ride-anddrives for students in our electric vehicles," he said.
The shift away from traditional four-year universities to specialized community programs has
become more apparent in recent years, with Forbes reporting a increase in enrollment for seven
consecutive years through the recession.
Additionally, the report indicated completion rates had increased 127 percent from 1989 to 2010.
This is a statistic Alabama Power looks to support through its existing relationships with
community colleges that ultimately feed and educate the labor force.
In Dothan, the Alabama Power partnership helps prepare prospective Alabama Power workers
for a career by giving them hands-on instruction from industry professionals.
"(The college) offers a pre-apprentice electrical lineworker program that we have supported,
including building a 'pole yard' where students train," Sznajderman said. "Other utilities also
have used those facilities to train workers. Our employees also mentor students at the college."
The growing popularity of these programs, however, do not signal the death of the four-year
university, some experts say, despite Forbes reporting 28 percent of community college grads
outearning their four-year counterparts
Chester Vrocher, executive director for the Alabama Technology Network told the BBJ in an
interview last week the increasing number of community college students will ultimately raise
the number of students in the four-year system. This comes on the heels of conversations
surrounding free federal funding of community colleges.
"If we say community college is free, then some of the students not attending today will go to
technical programs and go into welding or nursing and go straight to work," he said. "I think you
will see four-year universities will be getting more students to come in and get their bachelor's
degree."
+++
Eminent domain in Alabama is on the rise; what's the risk?
Al.com
February 2, 2015
Connor Sheets
Alabama has a strong tradition of protecting property rights against incursions by government,
but the usurping power of eminent domain has long played a key role in the statewide march
toward development and progress.
The legal power of eminent domain, by which a government or agency acquires privately-owned
real estate in order to facilitate development deemed to be in service of the public good, has
cleared the way for everything from highways to courthouses across Alabama, and it continues
to do so to this day.
But eminent domain and its place in society have undergone a fundamental reassessment in the
wake of the 2005 U.S. Supreme Court's decision in Kelo v. City of New London.
The case pitted New London homeowner Suzette Kelo against the Connecticut city's
government, which wanted the land upon which her home sat to be repurposed as part of a
sizeable pharmaceutical campus.
The Supreme Court ruled in a 5-4 decision that the land could be taken from Kelo and
transferred in such a manner, finding that the project would have sufficient benefit to the public.
But the pharmaceutical campus and the jobs and economic development it promised never
materialized, and all that was left in the place of Kelo and her neighbors' razed homes was an
empty lot.
The decision sent shockwaves through legal circles across the country, and in the intervening
years many states have enacted state constitutional amendments and legislation aimed at
ensuring that their citizens will not be kicked out of their homes to make room for malls or office
parks.
Alabama's state legislature was the first in the nation to respond to the Kelo decision by passing a
law protecting its citizens from having their private property taken from them and transferred to
developers of private projects without clear public benefit.
The new law -- and similar laws and amendments approved in more than 40 states -- effectively
bans the use of eminent domain for retail and other private projects. A situation like the one in
which the city of Alabaster turned to eminent domain in 2004 to transfer land to a retail
developer became far less likely in the wake of the new law.
Less than two months after the Kelo decision was handed up, then-Gov. Bob Riley signed the
legislation, declaring that "[a] property rights revolt is sweeping the nation, and Alabama is
leading it."
The law codified the concept of blocking developers from relying on eminent domain to acquire
land on which to build private projects, but the state and municipalities across Alabama have
continued to use the power in pursuit of their own public projects in the decade since Kelo.
That's not necessarily a bad thing, as many such projects -- particularly roads and highways -would not have been possible without eminent domain, and people are entitled to "just
compensation" in exchange for their property.
But what exactly "just compensation" might be for a specific building or parcel of land is much
less cut and dry, and thereby drives most of the controversy over eminent domain in Alabama in
recent years, according to Jesse Evans III, a partner at the Birmingham law firm Rumberger,
Kirk and Calwell law firm with experience in condemnation and eminent domain cases.
Eminent domain is a bit on the upswing because of a couple of projects.
"There's not been a great deal that's been controversial insofar as the right of government to take
land," Evans said. "The primary controversies have been over what is fair market value or what
is 'just compensation' within the state and federal constitutions."
Jefferson County found itself at the center of just such a controversy in 1999 when it attempted
to harness the power of eminent domain to condemn the privately owned, 17-story 2121
Building at 2121 Reverend Abraham Woods Jr. Blvd. in Birmingham to use it for administrative
space. The county claimed that doing so was "necessary and in the public interest," but the
buildings' owner, California's Emerik Properties balked, finding particular fault with the low
appraisal price the city quoted.
Warren Herlong, an experienced eminent domain and condemnation lawyer at the Mobile law
firm Helmsing Leach, represented Emerik and helped the company secure higher compensation
in exchange for the valuable property.
"Jefferson County was leasing a heck of a lot of the space and they felt that they could save the
county money by owning the building. They needed to put more county offices in there, and they
thought it would work out better economically if they became the landlord," Herlong said.
"There was litigation, yes. The city got the building, but they paid significantly more than they
appraised it for."
Alabama passed a law in 2013 that was widely perceived as an attempt to water down the state's
protections against eminent domain abuses. But its power is still seen as diminished enough by
the widespread backlash against the Kelo decision to serve as something of a deterrent for many
governments and developers across the state, according to Herlong.
"The city of Tuscaloosa used eminent domain to acquire the land to build the [federal]
courthouse, which is clearly public use. But they backed off acquiring the additional blocks they
had planned to acquire via the blight statute because after Kelo the political will wasn't there," he
explained.
"The city of Huntsville was acquiring property to add to their research park with the idea that to
develop a research park and attract private business was a public benefit and a public use, and
they stopped that in reaction to Kelo. That was not a political will issue, that was a legal issue.
The law no longer allowed them to do what they wanted to do."
But the national legacy of Robert Moses-style eminent domain looms large in the collective
memory of Americans, and its specter continues to arise in potential development schemes
across Alabama.
At least three developers are currently attempting to purchase dozens of homes in the Roebuck
Plaza neighborhood of Irondale outside Birmingham in order to convert the neighborhood into a
large shopping center or other private development. Developers' representatives and Irondale
Mayor Tommy Joe Alexander have sent out letters informing the community of the plans and
urging residents to negotiate fair deals to sell their house, which a number of the homeowners are
deeply opposed to doing.
Alexander told AL.com last week that he does not support using eminent domain to take their
property, but residents there are still concerned that the city will exercise the power if they do not
voluntarily sell their homes.
Still, Evans said that though the use of eminent domain was on the wane for much of the past
several years across Alabama, it is seeing something of a resurgence as the economy rebounds
and governments are increasingly able to fund new infrastructure projects.
"Eminent domain is a bit on the upswing because of a couple of projects, the northern Beltline
being one, and the I-20/59 downtown diversion," he said. "I think that construction of a roadway
is something that by and large has been considered to be in public use and there's not very much
way around the taking in those cases."
+++
Christian Coalition of Alabama exec James Henderson resigns to focus on new 'sanctity of
life' PAC
Al.com
February 2, 2015
Steve Doyle
Rev. James Henderson says he has resigned as executive director of the Christian Coalition of
Alabama to form a political action committee that will focus on "sanctity-of-life issues."
Henderson, a resident of Somerville in Morgan County, has been trying for years to shut down
Alabama's remaining abortion clinics through sidewalk protests and working behind the scenes
with like-minded state lawmakers. His new PAC will be called Pro-Life Alabama.
For the upcoming 2015 legislative session, Henderson is pushing a bill that would prevent the
state Department of Public Health from licensing abortion clinics located within 2,000 feet of a
school.
"This law alone can close at least one abortion clinic in the next year," he said in a Monday news
release.
He is likely referring to Alabama Women's Center for Reproductive Alternatives in Huntsville. It
is directly across Sparkman Drive from the former Ed White Middle School, which is being
remodeled to house the Academy for Academics and Arts magnet program. The campus is
expected to re-open in August.
"I've met with some of the key statewide pro-life leaders and believe we can rid our state of
abortion clinics in the next few years through a combination of prayer and action," said
Henderson. "As a new member of the state Republican Executive Committee of Alabama, I will
have the opportunity to work closer with state political leaders and officeholders at all levels of
like mind."
Henderson had led the Christian Coalition of Alabama since March 2011. Prior to that, he helped
manage Roy Moore's unsuccessful 2010 campaign for governor.
+++
Auburn University garners spot on Business Insider's '50 Most Underrated Colleges in
America'
Al.com
February 2, 2015
Amber Sutton
Auburn University recently landed a spot on Business Insider's list of "The 50 Most Underrated
Colleges in America" due to its special funding projects and average graduate salary.
The list ranked Auburn University in a five-way tie, along with University of Tulsa; Stonehill
College; Westmont College and the University of St. Thomas, for 41st place.
"Though known for their intense school spirit, Auburn graduates also do well academically,
earning an average mid-career salary of $87,900," the list reads. "Auburn, located in the
Alabama city of the same name, is also a land, sea, and space grant university, and it receives
special funding for projects that benefit the greater good, such as developing a storage facility for
nuclear waste or hosting the country's first wireless engineering program."
To develop the list, Business Insider compared US News' rankings of the best universities and
national liberal arts colleges in the country with PayScale's 2013-2014 College Salary Report.
The most underrated college in America, according to the list, is New Jersey Institute of
Technology. In Alabama, the University of Alabama at Huntsville placed in the 10th spot on the
list.
+++
UAH ranks among most underrated colleges in the country as grads make high salaries
Al.com
February 2, 2015
Paul Gattis
The school may not rank high in university rankings nationwide but its graduates make good
salaries.
And that makes the University of Alabama in Huntsville one of America's most underrated
schools, according to Business Insider.
UAH, with an enrollment of about 7,300 students, rated as the No. 10 most underrated college in
America.
In a unique twist, the nation's most underrated college -- New Jersey Institute of Technology -- is
where UAH hired President Robert Altenkirch from in 2011.
The website ranked the nation's 50 most underrated and Auburn University, checking in at No.
41 in a tie with four other schools, was the state's only other school included in the rankings.
In explaining how it developed its underrated list, Business Insider said, "To determine which
schools were underrated, we considered two factors: reputation and future earnings. We figured
that schools with bad or obscure reputations but whose students made high salaries would be
underrated."
Here is the comment about UAH:
UAH students benefit from the proximity of federal employers like NASA, Redstone Arsenal,
and Cummings Research Park for high-earning jobs in engineering, astronautics, and other
science fields. Grads earn a mid-career average salary of $85,100, attending the No. 1 return-oninvestment school according to The College Database.
+++
Community invited to witness planting of new oak trees on Valentine’s Day
Opelika-Auburn News
February 2, 2015
Nearly four years to the day that Auburn University announced the lethal poisoning of the
historic Auburn Oaks, two new live oaks will begin taking root in Samford Park at Toomer’s
Corner.
Landscapers are scheduled to begin planting the 35-foot-tall trees at 8 a.m. Feb. 14. The
university is inviting the public to attend the event, which should finish early in the afternoon. A
viewing area will be set up, and streets will be closed for safety reasons.
“We are partnering with the City of Auburn to make this a special day,” said Mike Clardy,
director of university communications. “Downtown merchants will be open early and three of
Auburn’s athletic teams will be in action that day. We are hoping people will come to the Plains
and make a weekend out of it.”
Beginning around 7:30 a.m., crews will close College Street from Thach Avenue to Tichenor
Avenue, and Magnolia Avenue from Wright Street to the Compass Bank parking lot entrance.
Roads are expected to remain closed until 2 p.m.
The new trees will arrive at Toomer’s Corner via flatbed trailer between 7:30 and 8 a.m.
The planting of the oaks is the final step in Phase I of the Samford Park renovation, which
included enlarging the plaza and improving the landscaping near the corner. The second phase,
slated to begin after A-Day in April, will feature the planting of 30 15-foot-tall trees – grown
from acorns collected from the original oaks – between Toomer’s Corner and Samford Hall.
The university is asking fans not to roll the two new oak trees until fall 2016 as they establish
roots and acclimate to their new environment.
For more information about the Auburn Oaks, visit www.auburn.edu/oaks.
+++
Byrne bill becomes conservatives’ ObamaCare repeal weapon of choice
Yellowhammer News
February 2, 2015
Cliff Sims
WASHINGTON — Alabama Congressman Bradley Byrne (R-AL1) last week became the center
of the push to repeal and replace ObamaCare when news broke that House Leadership had
chosen his bill as their repeal legislation of choice. On Monday, Byrne’s bill got another boost
with the endorsement of Heritage Action for America, arguably the most influential conservative
advocacy organization in the country.
“On Tuesday, the House will vote on a bill to repeal ObamaCare in its entirety (H.R. 596),”
Heritage Action said in a release. “Reaffirming support for full repeal of ObamaCare is
important, but not sufficient. Tuesday’s vote is the beginning of a multi-month effort that should
culminate with the House and Senate using the reconciliation process to send a bill that fully
repeals ObamaCare to the President’s desk.”
Heritage’s influence in Congress is derived in part from the group’s legislative “Scorecard.”
Each congressman and senator receives a score from Heritage Action based on votes they have
taken on “key” pieces of legislation. Low scores are frequently used against incumbents in
Republican primaries as evidence they are not sufficiently conservative. Byrne’s bill being
tagged by Heritage as a “key vote” ensures that Republican lawmakers will be paying especially
close attention to it when it comes to the floor for a vote.
Byrne’s bill “to repeal the Patient Protection and Affordable Care Act and health care-related
provisions in the Health Care and Education Reconciliation Act of 2010,” would allow Congress
to pursue health reform with a clean slate.
“I am very pleased the House will vote on a bill to repeal ObamaCare, and I am especially
pleased it is my legislation,” Rep. Byrne said. “This vote is notable because it will be the first
time since Republicans have taken control of the Senate that the House will act on a bill to repeal
ObamaCare. Senator Harry Reid can no longer stand in the way of allowing a vote on repealing
this law once and for all.”
+++
Mississippi Choctaws reopen Golden Moon casino to stave off decline, compete with Wind
Creek
Al.com
February 2, 2015
Michael Finch II
The Mississippi Band of Choctaw Indians reopened one of its casinos full-time in an effort to
recapture some of the customers who have been siphoned off by Alabama casinos run by the
Poarch Band of Creek Indians, Mississippi's Tri-City Herald reported.
A ribbon cutting ceremony was held Saturday at the 10,000-member tribe's Golden Moon Casino
in Philadelphia, Miss. after an extensive $70 million renovation.
Golden Moon Casino.JPG
The Golden Moon Casino based in Philadelphia, Miss. reopened on Jan. 31, 2015 to compete
with casinos on the Gulf Coast and those operated by the Poarch Band of Creek Indians. The
facility is owned by the Mississippi Band of Choctaw Indians. (Courtesy)
"We really did need to stay competitive and relevant with the gaming facilities that have opened
up both in south Mississippi on the coast, as well as in Alabama," Pearl River Resort CEO Holly
Gagnon told the newspaper in an interview.
The Pearl River Resort is owned by the Mississippi Choctaws, whose portfolio of investments
also includes the Silver Star Hotel & Casino, Dancing Rabbit Golf Club, Geyser Falls Water
Theme Park and the Bok Homa Casino located in Sandersville, Miss.
The Poarch Band of Creek Indians operate three casinos -- Creek Casino Montgomery, Wind
Creek Atmore and Wind Creek Wetumpka -- in Alabama. The 1,000-member tribe is the sole
operator of gambling facilities in the state.
Back in 2009, the Choctaws cut the Golden Moon facility's operating hours back to only
weekends. It was closed altogether the following year. The Mississippi tribe is now making a bet
that the facility will help them regain some of the lost ground as other gambling options have
popped up on the Gulf Coast.
Read the full story here.
+++
Univ. of West Alabama proud of former player Malcolm Butler
WSFA
February 2, 2015
Bryan Henry
LIVINGSTON, AL (WSFA) With millions watching, 24-year-old Malcolm Butler wrote his name in the Super Bowl history
books Sunday night.
Butler saved the day for the New England Patriots with a key interception at the goal line giving
the Patriots their fourth Super Bowl win.
Butler played for the University of West Alabama just one year ago. Former teammate Rashad
Greene remembers his friend well.
"He was a very friendly person, a great person. I learned a lot from him. He was like a mentor to
me," Greene said.
UWA head football coach Brett Gilliland was Butler's coach last year.
"He's very athletic and a stud. I mean he was just here a year ago," Gilliland said.
Since the Super Bowl, UWA has received more than a hundred media inquiries from across the
country. Journalists want to learn more about Butler's background and the University of West
Alabama. Butler went undrafted and for the longest time unsigned until New England gave him a
shot.
Gilliland has an idea what Butler was thinking when he made the interception.
"I think he was relieved," Gilliland said.
While Butler is now relishing the win with his fellow Patriots, Gilliland can't help but think all
the publicity will help UWA.
"It will help with recruiting, no doubt. It will put us on the map and give us that validity that
maybe wasn't there before," Gilliland said.
During his playing days at the University of West Alabama, Butler often talked about making it
in the NFL. The Super Bowl removed all doubt.
+++
Gap between rich and poor students who graduate college growing
The Associated Press
February 3, 2015
The gap in bachelor-degree attainment between the nation's richest and poorest students by age
24 has doubled during the last four decades, according to a report released Tuesday.
The percent of students from the lowest-income families -- those making $34,160 a year or less - earning a bachelor's degree has inched up just 3 points since 1970, rising from 6 to 9 percent by
2013.
Meanwhile, college completion for students from the wealthiest families has risen dramatically,
climbing from 44 to 77 percent.
"It's really quite amazing how big the differences have become between those from the highest
and lowest family incomes," said Laura Perna, a University of Pennsylvania professor and
executive director of the Alliance for Higher Education and Democracy, one of the two
organizations that published the study examining college costs and degree attainment.
The study comes amid renewed debate on college affordability spurred by President Barack
Obama's proposal to make two years of college free. If adopted in every state, the proposal
would benefit a projected 9 million students each year. It would cost taxpayers an estimated $60
billion over 10 years -- a price the Republican-controlled Congress is likely to be hesitant to
embrace.
Among the report's other findings: The percent of students from all income levels enrolling in
college has increased, shrinking the gap in enrollment between rich and poor "somewhat" during
the last four decades. There was a 46-point gap between the two groups in 1970 compared with a
36-point gap in 2012.
Yet completion gaps are growing: While 99 percent of students entering college from the highest
income families -- those making $108,650 or more a year -- graduate by 24, just 21 percent of
student from the lowest income families finish by that age.
Perna said there are a number of factors contributing to the widening divide, including access to
the information and support needed to enter college and graduate; college readiness; and the
availability of higher education that meets people's needs, particularly for students who might
have children, limited access to transportation and full-time jobs.
She also noted that the likelihood of finishing a degree varies dramatically by type of institution.
Students from the poorest families are overrepresented in public two-year institutions, which
tend to have lower completion rates, while those from higher income families are abundant in
doctoral-granting institutions.
The Obama administration has expanded the availability of Pell grants and supported a tax credit
for tuition costs, yet the study finds that the amount of the maximum Pell grant award has not
kept up with the rising cost of college. College costs were more than two times higher in 2012
than in 1975 at the start of the Pell grant program, which provides aid to low-income students
based on need.
Pell grants covered 67 percent of college costs in 1975 but only 27 percent in 2012.
"We sometimes think that low-income students are taken care of because of the federal program.
But you can see it covers so much less than it was first established," said Margaret Cahalan,
director of the Pell Institute for the Study of Opportunity in Higher Education, the second
institution involved in the report.
The study shows the burden of paying for college has increasingly shifted from state and local
governments to students and families. That, Perna said, should prompt an important question:
Who should pay for college given the individual and societal benefits?
"Students only have so many resources they can use to pay the costs," Perna said.
Michael Kramer, 29, is the first in his family to attend college. The son of a country club
maintenance supervisor and a factory worker, he went straight to jobs in retail and plumbing
after graduating high school, unable to afford college. He eventually enrolled in a community
college while working full time and is now taking out loans to help finish his bachelor's degree at
the University of California, Los Angeles.
"We're a country that says everybody should be getting higher education, and nowadays, to get
any decent job, you need a bachelor's degree," Kramer said.
Yet for low-income students like him, Kramer said the high cost of college often means making
a difficult choice between fulfilling basic food and housing needs and obtaining a post-secondary
education. "It's a continuous cycle that they get stuck in," he said.
+++
Net Neutrality Update: FCC seeks to change how high-speed Internet is regulated
CNN
February 3, 2015
NEW YORK (CNNMoney) — The FCC is set to propose a major change to the way the Internet
is regulated.
FCC Chairman Tom Wheeler plans to introduce a proposal that would reclassify high-speed
Internet service as a public utility, according to a person who has consulted with the FCC on the
forthcoming proposal.
The person insisted on anonymity because Wheeler had not yet spoken publicly about his plans.
Wheeler will hold a press briefing about his proposal on Tuesday. Wheeler promised the FCC
would vote on the rules at its Feb. 26 meeting, so following FCC procedure, he must present
them to colleagues by this Thursday.
By making broadband a public utility, the FCC would gain far more power to regulate the kinds
of network-access arrangements that Internet providers make with content providers, such as
Netflix and Google.
Currently, Internet providers can charge content companies to provide direct access to their
networks, which speeds up streaming and download speeds for broadband customers.
Under the proposed new rules, the FCC would ensure that broadband companies don’t unfairly
discriminate against content providers by creating “slow lanes” on the public Internet, according
to CNNMoney’s anonymous source. But there might still be “fast lanes.”
If, for instance, a video streaming service like Netflix feels it is being unjustly charged for the
distribution of its content, it will be able to bring a case before the FCC, according to the current
draft of the proposal.
“There’s a cop on the beat, but we’re not going to tell you what’s illegal yet,” the person said.
Wheeler’s approach falls in line with President Obama’s firm stand in November that the
Internet should be more heavily regulated to ensure it stays open and independent.
The FCC has tried — and failed — to regulate this kind of behavior before. Federal courts have
blocked the agency, saying that it overstepped its authority. Wheeler’s approach is a
workaround: Reclassifying Internet providers scoops them up under the FCC’s purview.
Even if the the proposal is acceptted, major hurdles remain.
The legal one: Title II rules were written in the 1930s for the Bell phone monopoly, so there are a
bunch of rules that don’t fit with modern technology. CNNMoney’s inside source said the FCC
will waive some Title II rules that don’t apply to 21st century communications.
When Internet providers fight the FCC in court (and they likely will), they’ll point out that the
FCC is implementing a rule that’s only relevant 1% of the time, said Robert M. McDowell, a
former FCC commissioner turned telecom lawyer in Washington, D.C.
Then there’s public opinion: Internet providers say it’ll lead to more paperwork and higher costs.
“The FCC’s planting a big seed of regulation that’ll probably only grow,” McDowell said. And
that might one day mean extra rules for Google and Netflix, which have data centers and could
be considered network owners too.
Others say more regulation could mean more freedom, lower prices and better treatment for
customers.
“These [telecom companies] are consolidating, monopolizing and controlling wider swathes of
broadband… you have to protect public interest,” said Michael Copps, a former FCC
commissioner who now leads Common Cause, a populist citizen lobby group.
Given the uncertainty about what’s actually in the proposal, Free Press, one of the foremost
public interest groups that has been lobbying for strong net neutrality protections, was careful in
its statement on Monday, saying “we can’t judge what we have yet to see.”
But “from all indications, Chairman Wheeler seems intent on choosing the correct path to
protecting the open Internet,” Free Press CEO Craig Aaron said.
“If the FCC does that — and also keeps the final order free of loopholes and industry meddling
— the chairman should be cheered by the millions who have mobilized to save the Internet,”
Aaron said.
+++
Obama's 10 new taxes
Politico
February 2, 2015
President Barack Obama’s latest budget is his most populist ever, seeking big tax hikes to pay
for ambitious new spending on education and infrastructure in a dare to Republicans to find
common ground.
Here are the biggest and boldest among his tax proposals. All estimates are for revenue raised or
spent over 10 years.
1. BUFFETT TAX: Reprising billionaire Warren Buffett’s gripe that he pays a lower tax rate
than his secretary — because ordinary income is taxed at higher rates than capital gains — the
White House wants millionaires to pay a minimum tax rate of 30 percent. The contrast between
taxes on wages and investment was highlighted during the 2012 campaign, when Mitt Romney’s
relatively low tax rate became an albatross for the Republican candidate. Would raise $35
billion.
2. LIMITING ITEMIZED DEDUCTIONS FOR THE WEALTHY: Obama wants to limit the
value of itemized deductions used by the wealthy, such as mortgage interest, to 28 percent of
their income. As it stands now, a write-off of $1,000 by a person in the top 40 percent bracket
saves the taxpayer $400. Under the proposal, that same write-off would save that taxpayer just
$280 because the value of the break is capped. Would raise $640 billion.
3. CAPITAL GAINS: The administration wants to hike the top rate to 28 percent from the
current rate of about 25 percent with various surcharges, while expanding the number of things
that would be subject to it. It would do that by cracking down on what’s known as a “stepped-up
basis.”
Here’s how it works: If you were to sell stock for $1 million that you bought for $100,000, you
would pay capital gains taxes on the $900,000 profit. But if you die, and your kid gets the stock,
he or she would be excused from paying taxes on the $900,000. For your child, the new starting
point in calculating capital gains taxes would be the $1 million, so that $900,000 would escape
taxation. It’s a tax break that would mostly, though not exclusively, benefit the wealthy.
The administration’s plan would end the stepped-up basis “loophole,” though it would add
various provisions aimed at shielding the nonwealthy and small businesses from having to pay
the tax. Would raise $208 billion.
4. EXPAND MIDDLE- AND LOW-INCOME FAMILY TAX CREDITS: The administration’s
plan would expand the child tax credit, the earned income tax credit for low-income workers and
create a new $500 “second-earner credit.” The new provision is aimed at married couples,
particularly those with young children, who may feel it doesn’t make economic sense for both to
work. The credit would phase out with income, though couples earning up to $210,000 could
claim at least a portion of the break. Other provisions would expand the EITC for childless
workers and triple the credit for working families that pay for child care. Would cost $277
billion.
5. THE MITT ROMNEY LOOPHOLE: The administration’s plan would target those who
accumulate giant balances in tax-preferred retirement accounts, an issue that came into the
spotlight in 2012 after reports that then-Republican presidential candidate Mitt Romney had at
least $21 million in an IRA while working at Bain Capital.
Obama to Congress: Put politics aside get budget 'done'
It would bar contributions to tax-preferred accounts once balances reach about $3.4 million,
which the administration says is enough to provide $210,000 in annual income. Raises $26
billion.
6&7. TAXES ON MULTINATIONAL COMPANIES: Obama expanded his plan to revamp
business taxes this year to include a new system of taxation for multinational companies with
profits overseas. In addition to his previous proposal to cut the top corporate tax rate from 35
percent to 28 percent, Obama would impose a new 19 percent minimum tax on global profit
going forward.
The policy shift is intended to encourage companies to bring cash back home instead of
stockpiling it overseas. To kick off the transition to the new system, the administration proposes
a one-time mandatory 14 percent tax on current profits sitting offshore.
Obama would use the funds from this one-time tax to pay for improvements to roads and other
infrastructure.
The one-time repatriation tax would raise $268 billion. Going forward, the 19 percent rate on
global profits would raise about $206 billion.
8. BANK TAX: The plan would impose a 7 basis point fee on the nation’s approximately 100
biggest banks. The administration says it would force them to think twice about borrowing
heavily.
The administration says it is “broadly consistent” with an excise tax former Republican Ways
and Means Chairman Dave Camp (R-Mich.) would have imposed as part of a tax reform bill last
year. Camp’s plan was rejected by his fellow Republicans. Would raise $112 billion.
The administration proposes to nearly double taxes on cigarettes and small cigars to about $1.95
per pack from about $1.01 per pack, and index the tax for inflation.
9. TOBACCO TAX: The administration proposes to nearly double taxes on cigarettes and small
cigars to about $1.95 per pack from about $1.01 per pack, and index the tax for inflation. The
hikes would pay for two politically powerful initiatives: an extension of the Children’s Health
Insurance Program — which is due to end this year if Congress doesn’t extend funding — and
Obama’s ongoing proposals to guarantee universal access to preschool. Would raise $95 billion.
10. THE GINGRICH-EDWARDS LOOPHOLE: The budget would revive a proposal to prevent
individuals from setting up pass-through businesses to avoid paying payroll taxes including
Social Security and Medicare. The loophole got its moniker after tax returns showed former
presidential candidates Newt Gingrich and John Edwards used it. Current law allows selfemployed individuals like lawyers and investment bankers to recharacterize a large portion of
their income as business profits rather than a salary. That cuts their taxes, since payroll taxes are
currently charged only to wages, not company profits. The White House would limit that
maneuver. Would raise over $74 billion.