The Alabama Constitution and Economic Development

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The Alabama Constitution and Economic
Development

• Joe A. Sumners, Ph.D.
• Director
• Auburn University
• Economic Development Institute
• 334-844-4704
• sumneja_at_auburn.edu

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Alabamas Fundamental Problem
A defective constitution is not the only problem
facing Alabama today,but, it is a fundamental
problem. A flawed constitution is the root of
many of the crises we face today.
Looks Backward Racism and Roadblocks
Preserves a Failed Tax Structure
Prevents Local Governments from Addressing
Local Problems
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Mom and Pops Constitution 1

• Imagine Mom and Pops grocery store. It seems
  the old store has been open forever. Mom and Pop
  have continued to add on to the store, but not
  according to any evident plan. Aisles are filled
  to overflowing with items in no particular system
  of order. Behind the cash register one can still
  see the old painted-over sign that says, Whites
  Only.

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The 1901 Constitution

• The two primary goals of the framers
• 1. Strip blacks (and poor whites) of all
  political power.
• 2. Limit the power of government.
• Preserve low taxes on property
• Limit government regulation of business
• Concentrate political power in Montgomery (no
  home rule)

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Problem 1 Looks Backward Racism and Roadblocks

• But if we would have white supremacy, we must
  establish it by law
• -- John Knox, President of 1901 Convention

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Problem 1 Looks Backward Racism and Roadblocks

• Black Disenfranchisement
• In 1900 there were 181,000 registered African
  American male voters in Alabama in 1903 there
  were fewer than 5,000.
• In the first election after enactment of the 1901
  Constitution, overall voter turnout declined by
  38 (white turnout by 19, and black turnout by
  96).

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Problem 1 Looks Backward Racism and Roadblocks

• ROADBLOCKS
• The Alabama Constitution is Strangled in
  Specifics, resulting in
• preservation of the status quo
• (low taxes)
• limits on the power of the Legislature to act
• (no public improvements debt limits)
• 746 amendments
• (attempts to loosen the original restrictions)

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Alabamas Constitution The Worlds Longest

• The Alabama Constitution is about 40 times as
  long as the U.S. Constitution and over 12 times
  as long as the typical state constitution .
• The combined constitutions of our neighbors
  Mississippi, Georgia, Tennessee, and Florida
  equal only one third the length of the Alabama
  Constitution.
• The Alabama Constitution is over 4 times as long
  as the next longest (Texas 80,000 words).

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Problem 1 Looks Backward Racism and Roadblocks

• Amendments to the 1901 Alabama Constitution
• 502 Allows a Morgan County Sheriffs posse
• 351 Mosquito and rodent control in Mobile County
• 482 Right to dispose of dead farm animals in
  Lauderdale County
• 497 Prohibition of overgrowth of weeds and
  storage and accumulation of certain junk, motor
  vehicles and litter in Jefferson County
• 520 Excavation of human graves in Madison County
• 34 Tax for malaria control in Limetone County

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Problem 1 Looks Backward Racism and Roadblocks

• Implications for Economic Development
• State Image Racist and backward are words
  that outsiders associate with Alabama.
• We have worked hard to shed this image to attract
  economic development, e.g, Mercedes, Honda,
  Robert Trent Jones Trail, NASA, Boeing, etc..
• The 1901 Constitution is backward looking,
  designed with Reconstruction in mind.
• The accommodations needed to overcome a flawed
  foundation burden the entire governmental system
  in effect, the Alabama Constitution imposes a
  gigantic Inefficiency Tax on the Alabama people.
• Effective government is strangled by our
  constitution.

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Mom and Pops Constitution 2

• The rich and powerful in town like Mom and Pops
  because Mom and Pop give them big discounts. Mom
  and Pop cant really afford to do it but they
  feel like they need the support of the powerful
  to stay afloat. Anyway, they can almost make up
  the difference by charging the poor folks more.
• All around shiny new stores have opened up.
  They offer products and services that Mom and Pop
  cant afford to offer. At least not unless they
  raise prices or make the rich pay their fair
  share. They wont do either. Instead they will
  cut back on the services they offer. In fact,
  Mom is thinking of firing Pop to make payroll.

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Problem 2 Preserves A Failed Tax Structure

• Taxing property at the national average would
  produce an additional 2.4 billion per year
• Georgia -- 1.8 billion
• To compensate for extremely low property taxes,
  Alabama relies heavily on a regressive sales tax.

• Alabama taxes are not adequate, fair, or reliable
• The total state and local tax burden in Alabama
  is the lowest in the nation
• Alabama property taxes are by far the lowest in
  the nation

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History of Economic Development in Alabama

• Throughout the 20th Century, Alabamas economic
  development strategy was built on low taxes and
  unskilled, low-cost labor.
• In the later 20th Century, the U.S began to
  export low wage, polluting industries new focus
  on high technology.
• Alabama was poorly positioned to compete when
  question became not what does labor cost? but
  what does labor know?

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Problem 2 Preserves A Failed Tax Structure

• IMPLICATIONS FOR ECONOMIC DEVELOPMENT
• Education is the key to economic development and
  a higher quality of life in this state
• The current tax system makes it difficult to
  raise local funds to support education.
• Alabama fails to provide adequate infrastructure
  (roads, bridges, water and sewer systems,
  technology) and quality of life (e.g., public
  health, public safety)

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Mom and Pops Constitution 3

• Years back Mom and Pops son, Junior, opened up
  a branch store just outside town. Hes in worse
  shape than Mom and Pop. Junior has wanted to
  make improvements in his store, but Mom and Pop
  dont trust him to make decisions and handle all
  that responsibility. Before Junior can change
  prices, add new stock items, or give a pay raise
  to his stock boy, he has to get permission from
  Mom and Pop. Two years ago, Junior asked if he
  could raise the price of bread by two cents. Mom
  and Pop said theyd think about it. Last week
  they gave the OK. Too bad that now Junior needs
  a price increase of two cents more.

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Problem 3 Prevents Local Governments From
Addressing Local Issues

• Over 70 percent of Alabamas 746 amendments
  apply to a single city or county.

• The 1901 Alabama Constitution concentrated power
  in the Legislature.
• Alabamas Legislators spend about 40 percent of
  their time on strictly local issues.

• Counties cannot raise taxes, regulate
  development, alter their structure, increase
  court fees, salaries, etc.

• Alabama is the only Southern state to deny Home
  Rule to county government.

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Problem 3 Prevents Local Governments From
Addressing Local Issues

• Implications for Economic Development
• INEFFICIENCY TAX
• At county level Wasted time and resources to get
  around the restrictive government structure.
• At state level Wasted time and resources
  dealing with local concerns while persistent
  statewide problems are not addressed.

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Mom and Pops Constitution 4

• Everyone keeps telling Mom and Pop they need to
  change and modernize to keep up with the times.
  Maybe they are right. Theyre losing money,
  theres no more room, and things are so
  disorganized that people keep getting lost in the
  store. Pop finally gives in. Hes decided to
  add on another room. That will fix things for
  now.

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Unheeded Advice

• Many of the provisions of our present
  antiquated fundamental law constitute insuperable
  barriers to most of the important reforms
  necessary to meet modern conditions and to secure
  greater economy and efficiency in the
  administration of state governmentThe only
  rational option is to assemble a constitutional
  convention to take into consideration the entire
  subject and remodel the entire constitution.
• -- Alabama Governor Emmet ONeal,
• message to the Alabama Legislature, 1915

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• Alabama Citizens for Constitutional Reform
• Website
• www.constitutionalreform.org
• A Century of Controversy Constitutional Reform
  in Alabama. Bailey Thomson, editor. University
  of Alabama Press, 2002.