General Fund Faces Major Shortfall

Montgomery, AL – An ad hoc legislative subcommittee says Alabama is heading for a budget shortfall of more than 379 million dollars in fiscal year 2005.
In response, committee members have proposed 326 million dollars in new taxes and fees. Those increases would raise the cost of cars, nursing homes and cigarettes among other things. The Business Association's Tax Coalition is opposing the plan, calling it the largest single tax increase in state history. The group also says it could be passed without Alabamians voting on it.
Governor Bob Riley was also critical of the plan, saying the Legislature needs to make government more accountable before considering new taxes.
However, committee members say the new taxes are needed to maintain many public services. The plan has been called a band-aid both lawmaker on both sides of the plan.