In late 1999, Gov. Don Siegelman ran headlong into the bog of the Alabama Constitution of 1901 as he and the Legislature grappled with a fiscal crisis.

   Between a legislative special session and a statewide referendum to circumvent the constitution, their solution cost taxpayers millions of dollars. Hardly the efficient state government Siegelman says he has in mind for Alabama.

   Here's the story:

   In March 1999, the U.S. Supreme Court declared the state's franchise tax unconstitutional, and it was. The tax charged out-of-state corporations a much higher rate than Alabama-based companies.

   The state faced a $125 million hole in its General Fund budget if it didn't replace the unconstitutional franchise tax. Officials talked of closing mental health centers, stopping delivery of hot meals to elderly shut-ins, laying off thousands of state workers, and closing prisons and releasing as many as 7,000 inmates.

   The Legislature called a special session in November 1999, and in quick order passed a package of bills that would raise revenue to replace the franchise tax. A special session can cost taxpayers as much as $300,000.

   Lawmakers decided, with the blessing of most business groups in Alabama, to replace the franchise tax by raising the lid on corporate income tax rates from 5 percent to 6.5 percent. But the corporate in come tax rate is locked into the constitution. That meant voters statewide would have to approve an amendment to raise it.

   They did so - or at least the meager 7 percent who voted did - in March 2000. The referendum cost $3.5 million, according to Secretary of State Jim Bennett.

   The process would have been different, and cheaper, with a reasonable constitution, one that's a fundamental charter between a state and its people instead of an extension of the Alabama code. Instead of the corporate income tax rate being cemented into the constitution, it would be part of the tax code, as it is in many states with modernized constitutions.

   In a make-believe Alabama guided by a modern constitution, the Legis ature could have solved the problem on its own more quickly. It could have simply changed the tax code to fix the franchise tax problem in its ongoing session.

   Imagine. No special session. No costly statewide referendum. No yearlong delay. And more than $3.5 million saved.

   If Siegelman truly wants to champion efficient state government, he'll champion a new state constitution that will allow it.

Next: History's Knot

Reprinted with Permission from The Birmingham News.