Thursday 7/13/2006 DAILY NEWS DIGEST

http://www.al.com/news/mobileregister/index.ssf?/base/news/115278234747950.xml&coll=3 – Articles profiles GOP runoff candidates for House District 102 seat.

http://www.al.com/opinion/birminghamnews/index.ssf?/base/opinion/115269688074860.xml&coll=2 – Editorial characterizes State Board of Education’s decision to fire chancellor “a good start.”

http://www.al.com/opinion/huntsvilletimes/index.ssf?/base/opinion/1152784124319150.xml&coll=1  Editorial praises Board’s decision to fire Johnson.

http://www.montgomeryadvertiser.com/apps/pbcs.dll/article?AID=/20060713/NEWS/607130328/1001 – Candidates in GOP runoff for state auditor post praise each other.

http://www.montgomeryadvertiser.com/apps/pbcs.dll/article?AID=/20060713/NEWS02/607130337/1009 – Hundreds may lose jobs as Michelin announces layoffs at Opelika plant.

http://www.montgomeryadvertiser.com/apps/pbcs.dll/article?AID=/20060713/OPINION01/607130301/1012/OPINION – The Montgomery Advertiser endorses Wallace in GOP runoff for lt. governor’s chair.

http://www.tuscaloosanews.com/apps/pbcs.dll/article?AID=/20060712/APF/607120948 – Regions/AmSouth say they will invest $100 billion community development programs.

http://www.decaturdaily.com/decaturdaily/news/060713/family.shtml – Interim chancellor reports family members employed by two year college system; Board members call for policy on nepotism.

FROM TODAY’S ANNISTON STAR:

Impact of tax-free holiday anyone’s guess

By Brian Lyman
Star Capitol Correspondent

07-13-2006

MONTGOMERY — Alabama officials are looking to Georgia to gauge the potential impact of the state sales tax holiday.

The problem is, there are no studies of the impact of the state sales tax holiday in Georgia.

“In Georgia there have been none,” said Alan Essig, director of the Georgia Budget and Policy Institute, a research firm based in Atlanta. “In Florida there’s been a couple, but they’re relatively old. In New York there’s been a couple, but they’re old.”

Alabama’s first sales tax holiday will be next month, from Aug. 4 to Aug. 6. The state will join Georgia and Florida in suspending sales taxes for a back-to-school weekend. Tennessee also will have its first sales tax holiday this year.

Georgia’s first sales tax holiday was in 2003, and opinions about its benefits largely depend on who’s making the assessment.

John Heavener, president of the Georgia Retail Association, said the holiday has been great for retailers, whose business has gone up 12 to 60 percent.

“It’s increased retail sales,” Heavener said. “A number of companies have found it’s the second biggest sales time for them, exceeded only by the holiday season.”

Heavener argues that the sales tax holiday also has been good for Georgia, because consumers have compulsively bought items not covered under the state’s exemption of sales taxes on clothes under $100, personal computers and accessories below $1,500, school supplies below $20 and – this year – certain EnergyStar appliances.

The retail association has not actually studied the impact, though.

Neither has the Georgia Department of Revenue. Charles Willey, a department spokesman, said the state has not looked at purchases of non-exempted items during the holiday. There may be “some compulsive buying” during the holiday, he said, but he did not see any major effect on tax receipts, one way or the other.

“If people were going to make a major purchase one or two weeks before the holiday, they might wait until the holiday,” Willey said. “But I don’t think most people wait for the sales tax holiday to buy items they might buy six months in advance.”

The Georgia Budget and Policy Institute released a report last year estimating the cost of the sales tax holiday at $10.2 million — money the GBPI said could have been used to hire an additional 250 teachers, 120 state troopers, or to fund a state health insurance program.

“In regards to stimulating retail business the research has been mixed,” the report says. “Research shows that a sales tax holiday affects the timing of clothing purchases, but has little effect on total household purchases for a year.”

Essig said businesses on the borders of Georgia have benefited most, and politicians from those border areas pushed hardest for the sales tax holiday.

“If it’s the only game in town doing it with the benefit, of course you’ll drive 10, 15, 20 miles across the border,” he said. “But if your state is going to have the benefit, what’s the point of driving across the border?”

Georgia’s sales tax holiday sunsets ever year, and Essig said his group has attempted to tack studies of the holiday’s impact onto renewal bills. None of those efforts have come to pass.

The Alabama state sales tax holiday will cost about $3.3 million in state tax revenue, according to the state legislature’s Legislative Fiscal Office; that number does not include revenue lost from local communities. Kelly Butler, a fiscal analyst with the LFO, says the number come from estimates from Georgia’s sales tax holiday. The appearance of additional revenues from the purchases of non-exempt items, he said, would be difficult to judge.

“That’s an argument that’s hard to quantify, because you have to make assumptions whether people are going to buy things,” Butler said. “The retail association makes that argument, but I haven’t seen any studies to that effect.”

Emily Richard, a spokeswoman for the Tennessee Department of Revenue, estimates their sales tax holiday will cost about $10 million. The Volunteer State collects local sales tax revenues and will reimburse local communities $2 million for their losses. The state collected about $10 billion in sales tax revenue in 2005-06.

Matrix was in charge of most ads for Dial, Preuitt campaigns

By Brian Lyman
Star Capitol Correspondent

07-13-2006

MONTGOMERY – Matrix is headquartered in a gray Edwardian mansion that looks like the product of a medieval mind. Willow trees with maroon flowers grow outside, and windows with sharp arches look down upon them.

It’s an impressive building, and when you learn that about $1.3 million passed through this building in May, you can believe it.

“We wish we could keep all of the money,” laughs Phillip Kinney, a political consultant with Matrix, which handled most of the advertising for two bitterly fought local Senate races this spring.

Kinney won’t say how much Matrix made that month; the company’s rates, he said, are similar to those of any ad agency. But most of the money came from the campaigns of Sens. Gerald Dial, D-Lineville, Jimmy Holley, D-Elba and Jim Preuitt, D-Talladega, and most of it was spent on flyers and television ads in their often-vicious primary races.

“It was as brutal a campaign as I’ve seen, in terms of these not being open seats,” Kinney said. “I’ve seen it when it comes to open seats, but you don’t normally see this level of attack in the primaries.”

Matrix, which has been in business for 11 years, takes the money from politicians’ war chests and uses it to purchase campaign material.

Matrix was founded in 1995 by political consultants Joe Perkins and Jeff Pitts. It employs 10 to 12 people and worked on eight campaigns this spring. The organization works mainly on Democratic campaigns, but occasionally takes on Republican clients.

The firm also will provide consulting services to candidates.

“We’re probably closer to a full-service consulting firm than most other firms,” Kinney said during an interview in his office, which is adorned with framed campaign buttons and literature and a map of the state Senate districts. “Some do media and television, but we’ve been real lucky in that we’ve had people for full cycles and we’ve been able to mesh (the outlets) in a coordinated fashion.”

Dial, who lost his primary race to Randolph County Circuit Court Clerk Kim Benefield, said there are many out-of-state consulting firms that take a holistic approach to campaigns, but not as many within Alabama.

“They know the state, they know the people, they know the issues in the district,” Dial said. “If you’ve got people from out of state, they may not know that. That’s (Matrix’s) major advantage.”

While Dial lost his primary race, Matrix as a whole did well on June 6; six of its eight candidates — including state Rep. Ken Guin, D-Carbon Hill and state Sen. E.B. McClain, D-Midfield — won their primaries. Phil Dotts, who lost a primary for an open state Senate seat in Madison County, was also a Matrix client.

The candidates dictate the dimensions of the campaigns. Mailings – which cost between $15,000 and $20,000 – are vital for an incumbent to connect with voters and explain their message. Billboards are important for politicians who lack high name-recognition. Television gets expensive, but became necessary in the primaries of this past spring.

The candidates have the final say over what goes in and out.

“If you have reasoned advice to give them, they’ll listen,” Kinney said. “It may take some of them longer to listen, but they’ll listen. These are seasoned professionals, and we’re hired to give advice.”

Preuitt went to Matrix after a consultant he previously worked with declined future services.

“I think they did a good job,” he said. “I was very pleased. They work with the candidate and get to know them and present their side of the story.”

Dial blames himself for not responding more quickly to advertising that flooded his district, but says he was “very satisfied” with Matrix’s response. Kinney says Dial was “very receptive” to their advice.

“There are probably always things you look back on and say you would have done differently,” he said. “There’s nothing specific that jumps out in the race to me. Each race is a different experience, and you hope you learn something new.”