Charles Dickens wrote "A Tale of Two Cities." Let me tell you "A Tale of Two States." Our state government receives a lot of criticism, but I've been observing a neighboring state lately. It's interesting to compare.
Tennessee has a state and local sales tax rate of just over 9 percent. The state has no general income tax and is in the process of phasing out the Hall income tax on dividends. The Republican Legislature has abolished the gift tax, the inheritance tax and reduced the sales tax on food twice. The state had a budget surplus last year of close to $1 billion. The budget surplus for this fiscal year is projected to be in the hundreds of millions of dollars.
Alabama has a state and local sales tax rate of over 9 percent. It's 10 percent in Huntsville and Birmingham. It also has a state income tax. Alabama borrowed $437 million in 2012 to cover years of budget deficits. The state raised taxes last year by $180 million to cover a budget deficit, and faces another budget deficit this year projected to be about $200 million.
Tennessee passed a lottery bill that earmarked all the money for education, virtually all of it for student scholarships. Alabama has had a special session in recent weeks desperately trying to get a lottery on the ballot in November. Only 10 percent of the lottery revenue would go to education; the rest would be used to shore up yet another budget deficit.