Calls for tax increases pop up across GOP-dominated South

Governors and legislative leaders who were elected on pledges to refuse raising taxes are rethinking their promises, squeezed by stagnant revenue, rising health care costs and growing competition from other states.

GOP leaders in Georgia, Alabama and South Carolina have pushed for tax increases — even if they don’t use the T-word — to repair crumbling infrastructure, expand education opportunities and build new roads. But as state legislative sessions play out, it’s unclear how many — if any — of the new revenue plans will become law, given the sway of conservatives and anti-tax advocates such as Grover Norquist.

The dynamic has led to bruised egos and intraparty warfare from Atlanta to Baton Rouge, where Louisiana Gov. Bobby Jindal, a presidential hopeful, is at odds with state leaders squeezed by a $1.6 billion budget gap partly the result of tanking oil prices and the end of a range of one-time cash infusions.

Jindal has proposed closing the gap by increasing the state’s cigarette tax, adding a new charge for students attending colleges and universities, hiking fees across state agencies, and redirecting unclaimed lottery winnings. Norquist’s Americans for Tax Reform has praised Jindal’s plan as “a spending cut, not a tax increase.”

But a growing number of Republicans in Louisiana are advocating for more far-reaching proposals to reverse years of spending cuts that have gutted higher education programs. They are seeking to end tax breaks, cut credits and raise taxes once considered off-limits.

“My constituents, they’ll scream at me about a $1 license plate tax in my district,” said state Rep. Tim Burns, a Republican who represents a conservative swath north of New Orleans. “But we need to be able to talk about it.”

A regional battle

Louisiana’s debate is one of many revenue fights raging across the South.

South Carolina lawmakers are grappling over ways to raise more money to maintain and repair state roads, with the Transportation Department projecting a need for $1 billion in new cash to repair crumbling infrastructure. A range of proposals have emerged, such as increasing gas taxes incrementally and allowing local governments more leeway to hike fuel fees.

South Carolina Gov. Nikki Haley has a Norquist-approved plan to raise the gas tax while cutting the income tax.

Politicians in North Carolina are weighing a new annual driver’s fee, as well as a pitch to raise gas taxes later this decade, to boost the infrastructure network.

Alabama Gov. Robert Bentley took a surprisingly blunt approach toward closing a $700 million deficit by pitching a tax increase on car sales and cigarettes, while eliminating some corporate tax deductions. He’s cast it as essential to strengthening the state’s education system, despite stiff opposition from rank-and-file Republicans.

“I was elected to make Alabama a better place,” Bentley told lawmakers. “Part of doing that requires tough decisions to be made.”

This is all familiar in Georgia, where blowback from conservatives wary of a plan to raise at least $1 billion in additional revenue for transportation infrastructure has frustrated political leaders who are united behind the cause.

“There are always going to be those who complain that this is a tax increase here, or this is a tax increase there,” Gov. Nathan Deal, who signed an anti-tax pledge, said in an interview. “But the reality is we have needs. Our state is growing.”

Norquist’s rise

The durability of anti-tax doctrine can be traced to two political forces: Norquist, the head of the Washington-based Americans for Tax Reform who promulgated a no-tax pledge in 1986, and President George H.W. Bush, who famously broke his “read my lips: no new taxes” vow in a 1990 budget deal with Democrats.

Bush lost in 1992 to Bill Clinton, undone in part by conservative unrest over his tax flip.

Norquist and his allies say the tax increases came in 1990 while the promised spending cuts never appeared because spending in the early 1990s was higher than the Congressional Budget Office had predicted. But other analysts credit the spending caps and pay-as-you-go requirements in the deal with helping create the budget surpluses at the turn of the century.

The 1990 deal was the last time Washington Republicans went against the pledge to reduce or maintain the overall tax burden, a remarkable 25-year run for Norquist that has made the pledge party orthodoxy.

“As a Republican, God put you on Earth to cut taxes. And if you raise taxes, it will never work,” said Ralph Reed, head of the Duluth-based Faith and Freedom Coalition and a decades-long friend of Norquist’s.

Both the U.S. House and U.S. Senate Budget committees recently introduced proposals to trim future deficits by trillions without raising taxes. President Barack Obama’s proposal to raise taxes to pay for spending increases for the military and infrastructure was immediately dismissed by the GOP.

U.S. Rep. Barry Loudermilk, a Cassville Republican who aligned with tea party forces in his first election to Congress last year, shrugged off the impact of the pledge. “Everybody has a pledge for everything,” he said.

But it’s easier for Congress to hold the line than state legislatures, which are required to balance budgets each year. Once-tax-averse Republican leaders are now casting a jealous eye at competing states with more cash in the bank — and depicting their plans to beef up revenue as part of an economic development arms race.

“They used to think the way to get more business is to have the lowest taxes in the country. Now they believe that they also have to provide infrastructure and services,” said Charles Bullock, a University of Georgia political scientist and an author on Southern political trends. “Southern states are still going to keep their taxes low, but they’ll raise them for a certain goal.”

Fears from the right

The anti-tax policy remains an important litmus test in GOP primaries across the region, as incumbents fear being outflanked to their right by a more conservative brand of Republican.

That’s what led a Georgia House leader to introduce a watered-down version of a transportation plan, which ultimately failed, to protect as many as 10 incumbents from primary opponents. It’s also prompted GOP leaders in the Georgia Senate to take a dramatically different approach that features new annual motorist fees along with an overall fuel tax cut.

“If we, as a Legislature, are going to ask our fellow citizens to pay more at the pump, then the state should be happy to drop some of its pet projects and dedicate more funding from the general fund towards transportation,” wrote state Rep. David Stover, who took his name off the plan because he viewed it as a tax increase.

Norquist’s group has labeled Georgia’s Republicans who back the transportation plan as closet Democrats pushing a “big government agenda.” It calls Bentley’s proposal a “foolish way to plug Alabama’s revenue shortfall.”

But there are signs that Norquist’s grip might not be as firm as it once was.

Only 37 of Georgia’s 136 state legislators — including two Democrats — have signed the pledge, according to an Atlanta Journal-Constitution analysis of the ATR database. In Alabama, 11 of the state’s 140 legislators have signed it. In South Carolina, the number is 27 of 170.

Norquist is getting vocal pushback, too. State Rep. Jay Roberts, R-Ocilla, who is leading the transportation push, noted last month that Norquist “isn’t from Georgia.”

“And until he fixes Washington, I don’t want to hear from him,” Roberts said. “I don’t care what he says.”

Bentley sounded a similar note when he told reporters in December: “I don’t pay much attention to Grover Norquist. He doesn’t run the state of Alabama.”

Norquist said tax increases are wrongheaded when there are so many other ways to cut or privatize pieces of government.

“The pledge is actually secondary now,” said its inventor.

“The pledge used to be this guardrail that stopped you from running off the edge. Now everyone goes: ‘I’m going to reform government so it costs less. Why would I ever think about or talk about or discuss raising taxes?’ ”

He said he sees Georgia and Nevada as the only Republican states where there’s a serious threat that tax increases could become law, and he pointed to tax cuts passed or considered throughout the South. Mississippi could phase out its state income tax; Texas is considering at least $4 billion in tax cuts.

Yet, the debate could still intensify, especially as Burns and other lawmakers signal a change of heart.

The Louisiana legislator said he couldn’t stomach another year of painful cuts to state programs. He proudly voted against an increase in the tobacco tax a few years ago, he said, but he’s planning to vote in favor of one this time. And he hopes it incites a broader discussion about the lucrative incentives his state doles out to businesses.

“If we hadn’t been cutting for five years, I wouldn’t be at this point,” Burns said. “I think everyone in my district sort of gets it. People don’t want to see things getting shut down.”

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Staff writer Aaron Gould Sheinin contributed to this article.

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