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Something for everyone
Riley proposes tax breaks, education expansion, big raise for teachers

By Phillip Rawls
Associated Press Writer

MONTGOMERY — Propelled by the state's strongest economy in years, Gov. Bob Riley laid out a something-for-everyone agenda Tuesday night, including tax breaks for families and small businesses, a record school construction program and a big raise for teachers.

The Republican governor told the Legislature that his second term is starting much different from his first.

"The budget deficit we inherited is gone, replaced by another record surplus. Our economy is booming and education funding and performance are at record highs," Riley said in his annual State of the State address.

Riley recommended the Legislature approve the largest education budget in state history and an $850 million school construction and technology program. That's $300 million more than the previous state record of $550 million in 1998.

He also called for expanding the award-winning Alabama Reading Initiative beyond grades K-3, installing the Alabama Math, Science and Technology Initiative in more schools, and providing distance learning labs in all high schools by 2010 so rural schools can offer the same advanced courses as urban schools.

Riley, who has fought with the Alabama Education Association over teacher pay raises the last two years, avoided that in this legislative session by recommending 7 percent — the same amount sought by the AEA.

"If you enact this 7 percent raise, teachers in Alabama will be making 20 percent more than they did just three years ago," Riley said to strong applause.

The governor also called for the creation of bonuses for teachers with superior performance and a mentoring program for new teachers to help reduce the high attrition rate.

Democratic Lt. Gov. Jim Folsom Jr., who met privately with Riley before his speech, said most of his proposals should get a warm reception in the Legislature.

"He's going to have a near unanimous vote on some of these issues," including the education bond issue and the teacher pay raise, Folsom said.

Senate President Pro Tem Hinton Mitchem, D-Union Grove, said most of Riley's education initiatives will have strong support, but the Legislature will also try to give a raise to state workers.

Many of Riley's proposals came out of his "Plan 2010" campaign platform, including providing a second income tax cut to help middle-class families, eliminating the state income tax on the first $10,000 of taxable retirement income, and removing the state sales tax on nonprescription medicine.

He also called for tax credits for workers who go back to school for training in high-demand jobs and for employers who hire low-income workers, welfare recipients and disabled veterans.

Riley said the best anti-poverty program will never be created by government. "It will be created by employers, and it's called a job," he said in prepared remarks.

For small businesses, he proposed that employers be allowed to deduct from their state taxes twice the amount they pay for health insurance premiums, and that their workers be allowed to deduct twice the amount they contribute toward the insurance.

Riley's proposed tax breaks would affect income and sales taxes that are dedicated to public education in Alabama, and they are already setting up fights with legislators who say they want to protect school funding.

"You have to wonder how you can recommend all these spending initiatives the governor recommended and all these tax cuts," House Speaker Seth Hammett said.

Riley said tax cuts will lead to a stronger economy and more tax collections.

"Arguments that these tax incentives will hurt education are simply not true," he said. "When you increase job opportunities, help middle-class families and make health care more affordable, you will increase revenues going into education."

On ethical issues, Riley said his campaign platform and those of the Democratic and Republican legislative caucuses agree on three things: banning the transfer of campaign donations between political action committees, requiring lobbyists to disclose "every penny" they spend on public officials, and eliminating pork projects hidden in the state budgets.

Illegal immigration

Without giving details, Riley said he plans to send the Legislature a package of bills "that will become the strongest illegal immigration laws in the United States."

Riley, who has been mentioned as a possible vice presidential candidate, strayed into national issues by opposing cuts in funding for troops in Iraq.

"Regardless of your opinion on the war, the president or the Congress, I ask this Legislature to pass a resolution voicing our support for our troops and our opposition to attempts by Congress to cut their funding. Our Alabama soldiers in Iraq and others on the way deserve to have our undivided and unwavering support," said Riley, who served six years in Congress before becoming governor.

Riley's speech was not all promises and politics. He began his remarks by asking for silent prayer to remember the deadly tornadoes that hit Enterprise and Millers Ferry on Thursday.

"In Alabama, when tragedy strikes one of us, it strikes all of us," Riley said.

Riley's State of the State address was attended by only about half of the Legislature. Many Democrats, particularly in the Senate, skipped it, but the Republicans present repeatedly interrupted the governor with applause and standing ovations, causing his speech to run beyond its 30-minute time slot for TV.

Democratic Sen. Tom Butler of Madison said he was unsure why so many of his fellow party members didn't join him at the speech. "Evidently there was a party I didn't get invited to," he said.

  • A record $850 million bond issue for school construction projects.

  • A 7 percent raise for teachers, but none for state employees.

  • An expansion of the Alabama Reading Initiative beyond grades K-3.

  • An income tax cut targeted at families.

  • Repeal of the state sales tax on nonprescription drugs.

  • Tax deductions for small businesses that supply health insurance to workers and for the workers who pay for the insurance.

  • Removal of state income tax on the first $10,000 of retirement income.

  • Tax credits for workers who return to school to train for high-demand jobs.

  • A ban on PAC-to-PAC transfers of campaign donations.

  • Requirement for lobbyists to report all they spend on public officials.

    The Associated Press

    Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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