The News Courier in Athens, Alabama

Opinion

December 16, 2012

Alabamians will feel ‘cliff’ effects

Montgomery Advertiser on state fiscal cliff issues:

Alabamians who think the “fiscal cliff” debate is just more hot air blowing around the partisans in Washington that won’t make any real difference down here should think again. The fiscal cliff, that combination of automatic tax increases and sharp spending cuts that kicks in at year’s end if no agreement is reached, is especially precipitous for our state.

Although the impact would be felt in every state, few others would take as big a hit as Alabama. There are several reasons for this, starting with the state’s tax structure.

Alabama allows federal income taxes as a deduction from state income tax liability. Most states — 44 of them — do not. If there is no agreement, current tax cuts will expire, meaning that federal income tax rates will rise. Because Alabamians will be paying more in federal income taxes, they will also be deducting more from their state income taxes, cutting revenue to their already strapped state.

A plunge over the fiscal cliff has other implications for Alabama as well. Defense spending is an important part of the state’s economy. As the Advertiser’s Mary Orndorff Troyan reported, 7 percent of Alabama’s gross domestic product comes from federal spending on defense. That’s twice the national average.

In 2010, federal spending on procurement contracts in Alabama was $10.4 billion. If there is no agreement to avoid the fiscal cliff, that number will drop substantially due to the big cuts in defense spending that will be triggered. National security concerns outweigh local economic concerns, of course, but the impact on Alabama would be no less real.

Other effects, although smaller, would still be felt in Alabama. Automatic spending cuts would cost Alabama $9.8 million and 330 jobs in Head Start programs around the state. That would mean 1,584 fewer spaces for children in a program with a proven record of helping children achieve academic success as they move into grade school.

Alabama would lose $3.3 million from its block grant for child care and development. That would eliminate child care subsidies for 1,253 families, making it harder for parents to work. Title I grants would drop by $18 million, eliminating 248 education jobs, and special education grants would be cut by $14 million.

All of this matters and matters a great deal, which is why Alabamians should not only be closely watching the debate in Congress, but also demanding that the members of the state delegation be a part of the effort to find a solution, not blindly partisan impediments to it.

1
Text Only
Opinion
Photos


Poll

Which foreign crisis is the biggest threat to the security of the United States?

Russia-Ukraine
Israel-Palestine
Iraq
None of the above
     View Results
Facebook
AP Video
The Carbon Trap: US Exports Global Warming UN Security Council Calls for Gaza Cease-fire Traditional African Dishes Teach Healthy Eating 13 Struck by Lightning on Calif. Beach Baseball Hall of Famers Inducted Israel, Hamas Trade Fire Despite Truce in Gaza Italy's Nibali Set to Win First Tour De France Raw: Shipwrecked Concordia Completes Last Voyage Raw: Sea Turtle Hatchlings Emerge From Nest Raw: Massive Dust Storm Covers Phoenix 12-hour Cease-fire in Gaza Fighting Begins Raw: Bolivian Dancers Attempt to Break Record Raw: Israel, Palestine Supporters Rally in US Raw: Air Algerie Flight 5017 Wreckage Virginia Governor Tours Tornado Aftermath Judge Faces Heat Over Offer to Help Migrant Kids Kangaroo Goes Missing in Oklahoma More M17 Bodies Return, Sanctions on Russia Grow Raw: Deadly Tornado Hits Virginia Campground Ohio State Marching Band Chief Fired After Probe
Twitter Updates
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Stocks
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Business Marquee