Alabama Arise — a nonprofit, nonpartisan coalition of congregations, organizations and individuals promoting public policies to improve the lives of low-income Alabamians —reached out to the 2018 gubernatorial candidates to seek their thoughts on policies that affect low-income people in Alabama.
They received replies from three candidates, all Democrats: Sue Bell Cobb, James Fields and Walt Maddox to questions about housing, payday lending, transportation and taxes.
Here are the questions and candidates’ responses:
Q: The Legislature has now created the infrastructure for both an Alabama Housing Trust Fund and an Alabama Public Transportation Trust Fund. Would you commit to providing funding for these trust funds? If not, how do you propose to address the lack of affordable housing and transportation, especially in rural areas?
Sue Bell Cobb:
Without reliable, substantive streams of revenue, neither the Alabama Housing Trust Fund nor the Alabama Public Transportation Trust Fund will be able to get off the ground. I am glad that the legislature has laid the groundwork for these funds, and the programs they could support have the potential to be transformational for quality of life in Alabama. I am absolutely committed to finding dependable streams of revenue that we can use to address both of these issues. In order for Alabama to have a healthy, productive workforce, they need a safe roof over their head and a stable method of transportation to and from work.
I will certainly commit to funding both. There can be no ‘trust funds’ without funding. Sources of revenue for housing have been identified including the deed record tax, unclaimed property funds, the 2012 national mortgage settlement. I support legislation to utilize these resources as well as others. I support development of public transportation, including high speed rail. The administrative tools made available by the Act must identify systems that can meet the needs of all, rural & urban, ensuring effective ridership and utilization, as well as related state revenue. Transportation related taxes must match today’s needs.
Lack of housing and public transportation are persistent problems that must be addressed because, among other things, they contribute to chronic unemployment and underemployment. Helping people find and keep jobs is one of the most successful ways to eliminate poverty. I will reach across aisles and across the state to find agreement on ways to fund these programs.
Q: Alabama law allows payday lenders to impose fees that add up to an Annual Percentage Rate (APR) as high as 456 percent. Would you favor extending the repayment period on payday loans in Alabama from the current 14 days to 30 days, effectively cutting their APR in half (from 456 percent APR to 213 percent)?
Sue Bell Cobb:
I am absolutely in favor of lengthening the repayment period to 30 days. I am also in favor of capping APR for small, short-term loans. We have far too many Alabamians trapped in a cycle of crushing debt thanks to predatory lending institutions that drain our local communities, and particularly our neighbors at or near the poverty line. Many of these companies siphon precious resources out of Alabama and funnel them into corporate pockets out of state. Not only does this extraction of resources have a deleterious economic impact on our state and our communities, the ballooning interest on these loans has a devastating human cost for children and families.
I absolutely support extending the repayment period and additional legislation which prevents those who must utilize these services from being caught in an ever-increasing accumulation of interest debt. I will continue to research strategies to accomplish this. Of course, accessible small short-term loans by banks would add competition, the possibly the most effective regulator for this industry.
By attaching outrageous interest rates to easy to obtain loans, predatory lending creates vicious cycles that can make desperate people even more desperate. I am open and committed to looking at various ways to protect vulnerable populations from such practices.
Q: Alabama is one of three states that give no state tax break on groceries, and we have the highest income tax in the nation for a family of four at the poverty line. In most states, this family would not pay income tax at all. How would you change Alabama’s upside-down tax system?
Sue Bell Cobb:
The first step to making Alabama’s tax system fairer is to remove the tax on groceries because Alabamians should not pay tax on something as essential as food. To accomplish this, we must replace that lost revenue. A politically feasible solution would be to work for passage of a flat state income tax, eliminate deductions for the wealthy, and add an exemption for anyone at or below the federal poverty line. I also believe that Alabama’s income tax should be calculated based on federal taxable income instead of adjusted gross income.
Clearly, the legislature, a majority of whom answer only those who fund their campaigns, cannot accomplish tax reform. I would establish a non-partisan Fair Tax Commission, tasked with righting the current upside-down system, including but not limited to addressing equitable taxes on real property, repeal of the ‘current use’ law, raising the threshold of taxable income, eliminating the tax on food, and revising deductions which favor those most able to pay, including corporations. Its work and any enabling legislation must be clearly and transparently presented and explained to the people to counter the certain opposition.
I support eliminating the state sales tax on groceries. But to do so we must offset the lost revenues with another source. One idea is to eliminate the state deduction for federal income taxes, which would require a constitutional amendment to be voted on by the people. We also must find a way to amend the tax structure so that people living below the poverty line do not pay income taxes.