DC taxpayer watchdog Grover Norquist calls on Kay Ivey, lawmakers to resist gas tax hike

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When the Alabama Legislature convenes in March one of the first things lawmakers are poised to consider is raising the state’s gas tax in order to help fund infrastructure improvements. But DC-based taxpayer watchdog Grover Norquist on Friday sent a letter calling on Alabama lawmakers to resist the urge to raise taxes, saying gas tax hike would “claw back the federal tax relief that their constituents received thanks to passage of the Tax Cuts & Jobs Act” last year.

Norquist’s, founder and president of Americans for Tax Reform (ATR), call comes in the wake of Alabama House Majority Leader Nathaniel Ledbetter saying a gas chance is likely to pass this legislature this session.

“While there are many opportunities to improve Alabama’s tax and regulatory climate, it’s important to first do no harm,” Norquist wrote in the letter. “As such, I urge that you reject the aggressive, but misguided push to hike the state gas tax, a proposal that would diminish and, in some cases, could totally erase the relief that your constituents have received from federal tax reform.”

Looking to Ivey for support

Norquist appears to have a particularly watchful eye on Alabama, keeping track of Gov. Kay Ivey and weighing-in on the state’s spending.

In fact, he is counting on Ivey to stand up to the state legislature and veto a tax-hike if necessary.

“There is a ‘secret’ plan to hike gas taxes after the election in Alabama. Good news is that Alabama Governor Kay Ivey has signed the Taxpayer Protection Pledge promising all Alabama voters she would veto any gas or other tax hike,” Norquist tweeted ahead of the general election.

Ivey is listed as an “active” signer of the Taxpayer Protection Pledge, which asks candidates for federal and state office to commit themselves in writing to oppose all tax increases. ATR considers the pledge “binding as long as an individual holds the office for which he or she signed the Pledge.”

Ivey signed the pledge Feb. 12, 2010 ATR State Relations Coordinator, Miriam Roff, confirmed to Alabama Today. At the time she was running in a crowded field for governor. Less than a month after signing the pledge, Ivey abandoned her run for governor and qualified to run for lieutenant governor. Ivey handily won the 2010 election for lieutenant governor, but it wasn’t until former Gov. Robert Bentley‘s resignation in April 2017 did Ivey find herself catapulted to the office of governor. In Nov., Ivey was elected to her first full-term as governor.

Alabama Today reached out to Ivey’s campaign ahead of the election to see if Ivey was still standing by her pledge, but did not receive a response. Nor does it appear that the Ivey campaign reached out to ATR for a correction if she’s against keeping her pledge.

Read Norquist’s full letter below:

To: Members of the Alabama Senate
From: Americans for Tax Reform

Dear Senator,

With the 2019 legislative session only a few months away, I write to encourage you and your colleagues to use the coming year to enact reforms that will help grow the state economy and protect taxpayers.

While there are many opportunities to improve Alabama’s tax and regulatory climate, it’s important to first do no harm. As such, I urge that you reject the aggressive, but misguided push to hike the state gas tax , a proposal that would diminish and, in some cases, could totally erase the relief that your constituents have received from federal tax reform.

Attempting to impose a regressive tax hike that will do the greatest harm to households who can least afford it is already bad enough. It’s even worse when it has already been documented that existing transportation dollars are not appropriately spent.

Ballot measures to hike state gas taxes were resoundingly rejected in Missouri, Utah, and Washington State just last month. Between that and the throngs of French citizens now protesting President Emmanuel Macron’s gas tax hike, which he just suspended, it’s clear that gas tax hikes are a political loser, both at home and abroad.

In addition to being terrible politics, the proposed gas tax increase is also bad policy. Consider that a state gas tax increase would counteract the benefits of federal tax reform and eat into Alabama taxpayers’ federal tax cut savings. This is one of the reasons why Congress has declined to raise the federal gas tax, despite pressure for them to do so; the same sort of misguided pressure that is currently being applied to you and your colleagues.

According to Strategas Research Partners, 60% of the federal income tax cut would be wiped out by a $0.25 gas tax increase and rising prices:

It’s no coincidence that the U.S. has reclaimed the number one spot on the World Economic Forum’s Global Competitiveness Index following enactment of federal tax reform that significantly cut federal income tax rates, both personal and corporate. The United States is a more attractive destination for investment and commerce following the enactment of federal tax reform, and global capital flows are expected to shift to the U.S. as a result.

It’s clear that many investors, CEOs, and site selectors are bullish on the U.S. relative to other potential destinations for their capital. Yet once business owners or investors make the decision to bring new capital or create jobs in the U.S., either by relocating or expanding operations stateside, they then have 50 choices before them. That’s why it is more important than ever for state legislators in Montgomery to do everything they can to make Alabama an attractive place to invest, do business, live, and raise a family. This is why it is so critical for lawmakers to reject economically harmful policies, such as the proposed gas tax hike, that would make Alabama a less attractive place to live or do business.

It is imperative that lawmakers reject efforts to raise the gas tax, or impose other harmful tax hikes in 2019. Your constituents are counting on you to protect their pocketbooks from spending interests that are clamoring to siphon more income from Alabama taxpayers. I thank you for your public service. If you have any questions or if ATR can be of assistance, don’t hesitate to contact me or Patrick Gleason, ATR’s vice president of state affairs, at pgleason@atr.org or 202-785-0266.

Sincerely,

Grover Norquist
President
Americans for Tax Reform