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An Editorial Series
April 3, 2002

   Judy Harrington spoons orange Gerber baby food into her
daughter’s mouth. As all 9-month-old babies do, Michelle chases it with formula and dribbles it on her chin. That
drool cost a few cents.

   Across the table, two of her boys, Andrew and Daniel, fix tacos for themselves, adding vegetables and cheese to tortillas filled with ground beef and beans. They drink Pepsi and Dr. Pepper.

   That’s a few dollars going into their stomachs.

   With three growing boys, ages 10, 12 and 17 as well as a baby daughter, Judy spends roughly $400 a month on groceries — and she’s very thrifty.
 
   On everything from baby formula to beef and bananas, the sales tax is roughly $32 a month or $384 a year on just food.

   “That’s like, what, a month of groceries,” Ms. Harrington says, after pondering the figure. She understands the point of constitutional reform.

   Down the hill from the Harringtons’ house is an industrial hog slaughterhouse. The company that owns it does not pay a red cent in sales taxes for the thousands of pounds of feed the pigs consume. Such are the idiosyncrasies of Alabama’s outdated tax code that Ms. Harrington, with four children, must pay sales taxes on a basic necessity like milk and baby food, while the pigs that turn a profit for the agricultural industry eat tax-free. (You’d better believe there’s sales tax on that pork chop, though.)

   For her, $32 a month is a substantial figure. Judy, a nurse at Regional Medical Center, works overtime and scrimps and saves to keep the refrigerator and the shelves stocked. A walk through the grocery aisles with her is an exercise in thrift. With each can of Vienna sausages, bag of oranges or box of cereal, she double checks the price and tries to recall if it is a few cents cheaper somewhere else. She can remember the price of Gerber baby food at FoodMax, corn flakes at the salvage grocery or Red Delicious apples at the Winn-Dixie. In all, she shops at four different stores to complete her grocery list.

   At the Sav-A-Lot in Anniston, she peruses the aisles, eyeing the fruits and vegetables, before opting to wait. She thinks the oranges were cheaper at Winn-Dixie. She pulls a 3-pound tub of margarine off the shelf. It’s 99 cents versus $1.99 for a pound of butter.

   And so the shopping goes. Three boxes of spaghetti for 99 cents but she only needs two. That 33-cent savings may be necessary elsewhere. In the potato chip aisle, she grabs a generic 8-ounce bag for 79 cents instead of the 5.5-ounce bag of Lay’s for 99 cents.

   “Don’t get me wrong, I’d love to buy that, but a chip is a chip,” she says.

   Among the frozen foods, she gets a bag of whole okra, broccoli and some TV dinners for the boys in case she’s not home for dinner. She picks up a box of frozen burritos that she doesn’t buy anymore.

   “Shoot, it’s $10 and they’re still hungry,” she says.

   The grocery cart is full and she heads to the cashier. The bill comes to $91.41 — plus another $7.31 in sales tax for a grand total of $98.72.

   She drives down to the Winn-Dixie for meat and produce. She pushes the cart right past the pork, chicken and fish, right to the discount freezer. She pulls out some short ribs, ground round and sirloin, all discounted by $2. The bill comes to $77.25.

   Today she paid the state of Alabama $13.03 for her $162.94 of groceries.

   But there’s also the $193.12, Ms. Harrington paid in personal property tax on her Chrysler minivan this year.

   And the $1,348 in state income tax. The federal government does not require her to pay income tax this year because she made $35,000 and has four dependents. It’s a benefit as well as a detriment. Unlike other Alabama residents, she cannot offset her state income tax with her federal filing.

   Judy rents her home for $400 a month. If she were to buy it, she would pay $351.30 in property tax, less than the amount she pays in sales tax annually on food.

   So far, that’s $2,276.42 she has paid in state taxes, not counting gas tax and sales taxes on clothes, medical supplies and other necessities.

   Proportionally, poorer families in Alabama pay out the nose when it comes to sales tax. Compared to wealthy families, poor families bear seven times the tax burden while middle class families carry four times the burden. Everyone, whether they’re Judy Harrington or Gov. Don Siegelman, has to eat. The difference is that the sales tax of $384 on groceries cuts much deeper into Judy’s paycheck than into Gov. Siegelman’s.

   Yet our 1901 constitution ensures that lopsided sales taxes remain the order of the day. Alabama raises 10 times more revenue through sales taxes than through property taxes so that Ms. Harrington must pay nearly $400 a year in taxes on her groceries while large landowners reap the benefits of dirt cheap property taxes.

   The 1901 constitution and ensuing amendments have capped property tax assessments so that a large landowner such as the giant timber company Georgia Pacific pays six times less in property tax on its timberland in Alabama than on an adjoining parcel in Georgia. Double Alabama’s property tax and it is still the lowest in the nation by a wide margin.

   With property taxes so low, communities must compensate with steep sales taxes while local schools are deprived of the stable funding provided by property taxes. In Alabama, we rely on a fickle flow of sales taxes to fund our schools, and educators cannot anticipate their budget from year to year. When sales taxes slow to a trickle as they do any time the economy slows, educators are often left in a desert of proration and cutbacks.

   So, while out-of-state corporations and luxury homeowners pay a token tax on their property to the state, Alabama taxes working-class parents like Judy 8 percent of their grocery bill, a personal property tax on their car and income tax if they make more than $4,600 a year.

   In a sister state, Ms. Harrington would not pay sales tax on groceries, says Dr. William Raabe, a former professor of taxation at Samford University. She would not pay personal property tax on her car, although her license and tag would be $50 higher. As for state income tax, she would ideally pay $800 — that’s 4 percent of $20,000 after she receives $10,000 in exemptions and a $5,000 standard deduction.

   Alabama’s tax structure would become balanced with a hike in the property tax and on state income tax for the higher brackets. Raabe calls for eliminating sales tax on groceries but expanding the sales tax to cover professional services, such as on advertising and dry cleaning. For property taxes on residences, Raabe suggests a rate of 2 percent. If Judy owned her home, valued at $50,000, that would mean a tripling of the current property tax of $351.30 to $1,000 a year. With the other tax reforms, that’s an overall savings of $396 a year for her. Merely double her property tax and she would save nearly $700 a year. Better yet, exempt homes that are worth less than $50,000.

   Meanwhile, the large landowners would finally pay their fair share toward improving Alabama.

   They are the reason Judy Harrington pays $384 in sales taxes on her groceries. They are the reason her son Daniel doesn’t have an art or a music teacher, his school lacks library books and his teachers, if they can afford it, spend upward of $1,000 on books, cleaning supplies and photocopies..

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