Mock Constitution
Draft/Comments Phase
(What is this?)
Index
Preamble
Article I: Declaration of Rights
Article II: Distribution of
Powers of Government
Article III: Legislative Branch
Article IV: Representation
Article V: Executive Branch
Article VI: Judicial Branch
Article VII: Suffrage and Elections
Article VIII: Taxation and
Debt Limitation
Article IX: Local Government
Article X: Education
Article XI: Public Officers
Article XII: Impeachment
Article XIII: Amending the Constitution
Article XIV: Transition Schedule
Entire Draft
Section 1. Limit on Powers to Tax and Lend Credit.
The State of Alabama and its political subdivisions shall use their power to tax and lend their credit only for public purposes, or other purposes specified herein.
Section 2. Delegation of Taxing Power.
The power to levy taxes shall not be delegated to individuals or private corporations or associations.
Section 3. State Taxes on Income.
A. A state tax on income may be levied only on net income. Income below the Federal poverty level shall be exempt from taxation.
B. A resident individual or a corporation organized under the law of this state shall be allowed to deduct from gross income the amount of federal income tax paid or accrued within the taxable year. A nonresident individual or foreign corporation shall be allowed to deduct only that amount of federal income tax paid or accrued in the taxable year on income received from sources within the state to be determined in accordance with such laws as the legislature may enact.
Section 4. Imposition of Income Tax with Reference to Federal Law.
Except as prohibited by this Constitution, the legislature in enacting laws taxing income, may define income by reference to provisions of the laws of the United States as they then exist or may prospectively be enacted, with such modification as may be prescribed by the law of this state.
Section 5. Dedicated Funds.
No proceeds of any state tax hereafter levied by the legislature, or derived from an increase in the rate of taxes now imposed, shall be dedicated to any special purpose, except when required by the federal government for state participation in federal programs. Any dedication of taxes for special purposes existing at the time of the ratification of this section shall continue until amended or terminated by act of the legislature, not more than two (2) years from the date this constitution is ratified.
Section 6. Expenditure of Public Money.
No money shall be withdrawn from the treasury except in accordance with appropriations made by law, nor shall any obligation for the payment of money be incurred except as authorized by law.
Section 7. Assessment and Classification of Property for Ad Valorem Taxation.
A. All taxable property within this state, not exempt by law, may be divided into classes by the legislature for the purposes of ad valorem taxation, at rates set forth by the legislature:
B. With respect to ad valorem taxes levied by counties, incorporated cities or towns, or other taxing authority, all taxable property shall be forever taxed at the same rate, and such property shall be assessed for ad valorem tax purposes in the same manner in which the State classifies, if so classified, property.
C. Wherever any constitution provision or statute provides for, limits or measures the power or authority of any county, incorporated city or town, or other taxing authority to levy taxes, borrow money, or incur indebtedness in relation to the assessment of property therein for the state taxes or for the state and county taxes such provision shall mean as assessed for county or incorporated city or town taxes as the case may be.
Section 8. Exemption from Ad Valorem Taxation.
A. The following property shall be exempt from all ad valorem taxation: the real and personal property of the state, counties, incorporated cities or towns, and property devoted exclusively to religious, educational or charitable purposes.
B. The legislature may provide for other exemptions from ad valorem taxation.
Section 9. Taxation.
Except for taxes levied by the state and taxes required for the payment of bonds issued after the ratification of Section 8, no additional ad valorem taxes on real or personal property shall be levied unless the tax shall have been (1) approved by the authority having power to levy the tax after a public hearing on the proposal and (2) subsequently approved by a majority of electors of the jurisdiction in which the tax is to be levied who vote on proposal.
Section 10. State Debt Limitation.
No debt or other obligation shall be contracted by or in behalf of the state except as provided herein and the full faith and credit of the state shall be pledged to all debt incurred under this section.
A. Temporary borrowing. The legislature may authorize debts to be contracted to meet deficits in the revenue in anticipation of the collection during the then current fiscal year of state taxes and within appropriations for such fiscal year in an amount not exceeding one-tenth of the average annual tax receipts of the state for the five fiscal years immediately preceding. Such debt shall mature and be paid from such tax collections within the current fiscal year.
B. Debts to finance capital projects or to refund previous obligations. The legislature may authorize debts to be contracted: (1) to finance a capital project which is to be specified in the authorizing act, or (2) to refund a previous obligation of the state. The total principal amount of debts so authorized together with all debts or obligations of the state payable in whole or in part from taxes, shall not exceed one and three-fourths times the average annual revenue receipts of the state for the immediately preceding five fiscal years. An act authorizing such debt shall require for its passage a vote of three-fifths of the members elected to each house.
C. Additional debt. The legislature may authorize debt in excess of the limit provided in paragraph (b) by an act passed by a vote of three-fifths of the members elected to each house and approved by a majority of the electors of the state voting on the question.
D. Bonds to finance revenue producing capital projects. The legislature may authorize the issuance of general obligation bonds of the state to finance or refinance specified revenue producing projects (including the enlargement or improvement thereof), which are owned and controlled by the state or by one of its institutions or agencies, to an amount not exceeding the average annual tax revenues of the state for the immediately preceding five fiscal years; and such bonds shall not be included in determining the limitation on debt contained in paragraph (b), provided that:
1. The bonds shall be secured by a pledge of the net revenue derived from rates, fees or other charges of the projects;
2. Before any such bonds shall be authorized, the governor shall file with the clerk of the house and secretary of the senate his opinion, based on responsible engineering and economic estimates attached thereto, that the anticipated net revenues to be pledged to the payment of the principal and interest on such bonds will be sufficient to meet such payments and to provide such reserves as the act authorizing such bonds may require; and
3. The act authorizing such bonds shall be adopted by a vote of two-thirds of the members elected to each house.
E. Retiring Debt. All bonds authorized under paragraphs (b), (c), and (d) above shall mature serially in annual or more frequent installments, beginning not later than three years from the date of issue and ending within the estimated useful life of the project as stated in the authorizing act or thirty years from date of issue, whichever is shorter. The principal and interest on all such bonds shall be a first charge on the general revenues of the state and, unless sufficient funds are appropriated in each fiscal year for the payment of such principal and interest, there shall be set aside from the first tax revenues received during each fiscal year and each succeeding fiscal year a sum sufficient to pay such principal and interest.
Section 11. Procedure for Incurring County and Municipal Debt.
A. Except as hereinafter permitted, no county or incorporated city or town shall contract or incur any debt or obligation pledging its full faith and credit, unless (1) such debt or obligation shall be incurred or contracted for the purpose of making one or more capital improvements, (2) shall mature within the estimated useful life of such capital improvements or thirty years whichever is the shorter and (3) shall have been approved by a majority vote of the electors of such county or incorporated city or town voting at an election held in the manner prescribed by law.
B. The limitation on incurring a debt or obligation provided by subdivision (a) hereof shall not apply to the following:
1. Obligations incurred for current operating expenses in any fiscal year which do not exceed the anticipated income of that year available for such purposes.
2. Temporary loans to be paid within one year, made in anticipation of the collection of taxes, not exceeding one-fourth of the average annual general revenues (excluding state and federal grants) of such county, incorporated city or town, for the preceding five fiscal years.
3. The renewal, refunding or reissue of obligations lawfully issued.
4. Obligation to procure funds to pay for public improvements, the cost of which is to be assessed, in whole or in part, against the property abutting on or served by such improvements.
5. Obligations of a public corporation created by any county or incorporated city or town, even though property, whether or not capable of producing income, may have been transferred to such public corporation by a county or an incorporated city or town with or without consideration.
Section 12. Exception to Election Requirements for Obligations to Finance Small Capital Projects.
A. Notwithstanding the provisions of the constitution requiring an election for incurring debts or obligations, a county or an incorporated city or town may incur a debt or obligation without an election in an amount not exceeding one-fifth of its average annual tax revenue paid into its general funds, and, in the case of a county, also its public building, road and bridge fund, for the last five preceding fiscal years, to finance a capital project, if approved by three-fifths of the members of its governing body after a public hearing, of which at least ten days notice has been given by publication. Notice of approval by the governing body shall be published within seven days after approval.
B. In the event that five percent of the number of electors who were qualified to vote in such county in the last general election, or in such incorporated city or town in the last municipal election, within thirty days following publication of the notice of approval, file a written petition with the governing body for an election, the debt or obligation shall not be incurred unless approved by a majority of the electors voting on the question at an election.
C. The total principal amount of all debts or obligations incurred without an election and outstanding under this section shall never exceed one percent of the assessed value of taxable property in the county or incorporated city or town.
Section 13. General Obligation Indebtedness of Counties and Municipalities for Industrial Development.
Any county, incorporated city or town, or other subdivision may to incur obligations, payable in whole or in part from taxes, for industrial or commercial development, provided that: (1) the obligations shall be approved by a vote of a majority of the electors of the county, incorporated city or town, or other subdivision voting in on election thereon; and (2) the electors simultaneously authorize the levying of a special tax reasonably estimated to be sufficient to pay the obligations if revenues pledged are insufficient. The type of tax, its possible duration and maximum rate shall be set out on the ballot to be used at such election.
Legislative Dispatch
Purple Dot Connection
2010 Big List
2010 Senate Elections
2010 House Elections
Press Releases
Need to better define “net income.” Is that take-home pay only, or is it everything that’s left after federal taxes? Also, scratch Section 11. Let the counties, municipalities, etc. determine for themselves whether or not they will incur debt. Finally, we need a law requiring a balanced budget. I don’t know if that should be based on prior year, average of multiple prior years, or forecasting, but any of those would be better than spending money we don’t have!
Make Section 9 require a 2/3rds legislative vote and a 2/3rds public referendum and then conservatives and libertarians can start to take this seriously.
Like the local voter control over taxes and indebtedness. I agree with Austin that a supermajority voting requirement might help sell this provision in a statewide referendum.
It is time to join the vast majority of states in disallowing the deduction of federal taxes. If necessary, tax rates could be adjusted, but in fact, this deduction gives a small percentage of high-income persons and businesses an unjustified advantage in a state where there is no significant graduation of income tax rates..
I assume Article VIII, Sec.7 will leave in place “current use” taxation of timber and farm property–correct?
The federal income deduction is one of the primary reasons why Alabama has one of the most regressive tax systems in the country. It would be a huge mistake to write such poor policy in to a new Constitution.
BG, I serve on the Taxation and Debt limitation committee and we had some spirited discussions on the issue of current use valuations. In our ininital draft we retained a great deal of the language from the 1901 Constitution regarding classifications of property and current use. After debate and input from the delegate body we elected to provide the legislature with the ability to classify and tax property as they deem expedient. The retention of current use valuation would be in the discretion of the legislature.
Most of the people who want change moved here from the north and if they don’t like our way they should move back to the north. Our Constitution has worked all these years. If it’s not broke leave it alone.
Greed is what is wrong with the world. Leave our Constitution ALONG.
Any new constitution should not attempt to rewrite the tax code. This is why constitutional reform will never get off the ground in this state. Since Day One, the argument for a new constitution has been rooted in finding a “more progressive” tax scheme for Alabama — whatever that means.
Simply put that the legislature has the right to pass laws to raise revenue in the state. To protect the people, there should also be language in there about a balanced budget and people should be able to vote on tax increases that exceed three percent in one fiscal year of eight percent over three years. Just my thought
Under Section 7, sentence reading “All taxable property shall be forever taxed at the same rate. . .
suggest the word “forever” be deleted. Forever is a very long time!
Section three should be stricken and in the place of this entire article, the Fair Tax should be put in.
Section 5 gets rid of earmarks. A horrible idea. Earmarking prevents the legislature from running wild with our money. More proof of liberal bias in the making of this document. They want the government to be able to tax as much as it wants and spend as much as it wants. There is absolutely no restrictions on either in this “constitution”.
Ad valorem taxes should be abolished. We have so many tax forfeitures happening in this state right now that the message should be clear. Ad valorem taxes are simply a way of taking land away from poor people. Once you buy land it should be yours until you sell it. Short of eminent domain, the government should not have the ability to impose a tax with the ultimate goal of taking the land from you if you cannot pay.
Counties and municipalities should NOT have the ability to impose taxes…PERIOD. We are already over-taxed in this state. Allowing three more levels of government to impose an unrestricted amount of tax on the people is unconscionable.
To Fo-Fiver–Thanks for the input on current use taxation. Current use must be preserved if private ownership of land is to last. I would feel better if this safeguard was not left to “the discretion” of our legislature.BG
ad valorem is a way that keeps the poor from holding on to land and business. if you have problems with not enough taxes – set a state sales tax at 6% and everyone pays the same.
Keep in mind the principles of a Constitution draught.
Edmond Randolph: In the draught of a fundamental constitution, two things deserve attention:
1. To insert essential principles only, lest the operations of government should be clogged by rendering those provisions permanent and unalterable, which ought to be accommodated to times and events, and
2. To use simple and precise language, and general propositions, according to the example of the (several) constitutions of the several states. (For the construction of a constitution of necessarily differs from that of law)
Records of the Federal Convention, 1787
Constitutional draught is not to include the transient thoughts of the day on what is thought appropriate legislation. Do not put in place what requires a constitutional amendment that almost surely will need the flexibility of a different time.
Taxes are a necessary for good government. How well the rest of the document is constructed and executed will determine whether the necessary is also to be oppressive on the many and easy on the few. It should be oppressive to neither.
Once a constitution is in place, the People through their representatives armed with a real system of checks and balances will begin to set the State on a path to prosperity for ALL.
From Article I, Section 7, of The Constitution of the United States of America I submit the general principles as a revision on taxation
All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.
Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the Governor of the State of Alabama;[3] If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively. If any Bill shall not be returned by the Governor within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Legislature by their Adjournment prevent its Return, in which Case it shall not be a Law.
Every Order, Resolution, or Vote to which the Concurrence of the Senate and House of Representatives may be necessary (except on a question of Adjournment) shall be presented to the Governor of the State of Alabama; and before the Same shall take Effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the Rules and Limitations prescribed in the Case of a Bill.
This constitution should not disallow the deduction of federal taxes in computing one’s state tax. Such a policy could be added as law if the people choose, but it should not be put in stone in the constitution. Such a policy favors a small group of high-income people and hurts the population as a whole as well as negates a significant revenue source spread out over many more able to pay.
Large corporations and special interest groups should not be allowed a special rate of taxation on their land holdings. Someone who owns a 3/4 acre lot should not pay more per parcel than i.e. State Farm or U.S. Steel because these entities claim the use of the property as “timber and farming” for virtually no taxes until they are ready to develop the property and make millions. All land should be taxed the same. Yes, we need tax reform in Alabama. We punish the poorest of our citizens for the benefit of the richest. I really don’t understand why church property is not taxed. Before I get accused of being Godless, let me tell you that I am a Christian.
Tax is a given. Also, that a man’s capital, the principle, is not to be taxed is a fundamental of laissez-faire capitalism with its republicanism of an independent capital.
Timber and farmland is a large principle within Alabama. We must be careful not to commit the same vindictive behavior of the French, even though the large land holders have been perfidious toward their duty as a sovereign, just as we all have been.
The TAX THAT OPPRESSES is the tax that gives preference in competition through legislation: the LAW. The Law of the Machinations of men without scruple. The Law Jeff Sessions holds invoilate.
The TAX THAT OPPRESSES give preference to a few from the competitive pressures of the market.
These Laws prevent new entrants, substitute products, fair bargaining for the sellers of labor and commodities, fair bargaining for the purchasers of labor and commodities, and rivalry within the market place.
Alabama has, from slavery to segregation, and now from failure to educate the young, imposed a TAX THAT OPPRESSES upon our citizens way into the future.
The wealth accumulated through preference also has with it an accumulated a debt to Alabama. However, taxing a capital into poverty is wrong by laissez-faire American Constitutionalism.
We need the independent jurist to check and balance the machinations of democratic perfidy that has allowed legislators to ignore the restraint of legislative preference that has been in the Constitution since 1787; the very TAX that has burdened the basic subsistence of all Alabamans since inception of the State.
We do not need to send capitals fleeing from the State.
“Direct taxation” in the Constitution laid the base for a pay as you go system. Each year the cost of government was to be divided in some way so that every citizen with means above his subsistence paid his share based upon a census.
The concept put an emphasis on fidelity of Sovereign Duty (so not to accumulate a large class of poverty that burdens the Treasury or creates debt for future generations to cover), and the Efficient Utilization of scarce resources so every stakeholder has a fair chance, based on his merit only, to accumulate an independent capital so long as he does not harm his neighbors (like leaving toxic waste for the next generation to clean up).
Book Five of the Wealth of Nations defines the recipe to a TAX SYSTEM THAT DOES NOT OPPRESS.
The decimation of Farm and Timber capital holdings would be way too “French”. However, there is a liability owed by those who profited by legislative machinations of preference even though we put off correcting the situation by our apathy until now.
A weighted average “direct tax” based on gross income per citizen, along with some form gross income from operations by corporations might work; however, over taxing corporations would have the effect of reducing gross income per citizen since corporations produce the jobs. The right formula would take some care.
These taxes can be collected from each pay check for the most part, eliminating much of the frustration and cost of the collection process. Rule #1 is to keep the revenue agent as far from the citizens as possible.
Education raises the gross income per citizen reducing the amount necessary per citizen if the citizens all give fidelity to their Sovereign Duty. We should remember tht Less poverty means reduced revenue needs to fund the safety net.
Capital obliteration would keep us on the same road. A change in drivers would be the only gain or loss.
Specifics do not belong in a Constituion, only the authority to do so. “Direct taxation” in the Constitution is not a specific tax, it is a constraint on the direct tax method if we chose to use it: it must be based upon a census.
The authority to raise revenue is a given.
Removing many of the provisions of this Article that specify particular taxes and deductions would (1) make it more consistent with the philosophy of a “framework” constitution which is the approach found in the U.S. and better state constitutions, (2) make it easier to pass and (3) give the state more flexibility to respond quickly to changing economic, political and social conditions, both within the state and around the world as they affect our citizens and tax base. Personally, there are some specifics in this draft I would probably support as statutory law and others I would probably oppose but in both cases, I think the debate should be in the legislature.
Comments posted re this article make it clear how divisive some of these provisions can be and the kind of questions they raise.
I would delete Section 5 which deals with earmarking…leaving it up to the legislature to propose and the people to decide whether or not particular tax revenue should be dedicated to a particular purpose. Clearly, we are not well served by our current situation where so much of state revenue is earmarked that there is little flexibility to deal with changing needs and fiscal emergencies. On the other hand, citizens should have the ability to pass taxes for special purposes when circumstances arise that make that desirable without having to give the legislature the ability to spend the revenue in any way it sees fit…especially taxes of limited duration. The provision that existing earmarks will continue unless changed by the legislature within 2 years is confusing….if the legislature fails to act, does the earmarking stop or does the tax cease in two years…and what happens to education in this state at that point? This is one of those provisions that could make it very difficult to pass a new Constitution.
Sec 3(A): I don’t understand what it means to say that a state tax may only be levied on *net* income, as net income by definition is one’s income after paying taxes. Is it referring to net income after federal taxes are considered?
Sec 3(B): the first sentence of this paragraph should be removed, as the elimination of this deduction would help offset the loss of revenue should the state grocery tax ever be dropped (as it should). There’s no reason for it to be in the Constitution anyway; it could be done statutorily.