- Associated Press - Thursday, February 19, 2015

MONTGOMERY, Ala. (AP) - Republican Gov. Robert Bentley, proposing Alabama’s first major tax increase in more than a decade, said he will ask legislators to approve a $700 million tax and revenue package in the upcoming legislative session.

“I am a governor that always tells you the truth. I don’t sugarcoat it, and I’m not going to sugarcoat this. We need the money,” Bentley said.

Bentley, in a speech at a childhood education conference, said legislators have slashed, restructured and borrowed for years to patch together the state’s General Fund budget. Now, there is no way out of the budget shortfall other than to raise taxes, he said.

“For me as a Republican governor to tell you that we are going to raise taxes in this state, it’s tough. But folks, we have done everything we can do over the last four years,” Bentley said.

In the speech, Bentley for the first time put a dollar figure on the size of the General Fund revenue package that he has been hinting at since November. The governor will lay out his proposals in his March 3 State of the State address on the opening day of the legislative session. It will be the first major revenue plan since Gov. Bob Riley proposed a $1.2 billion tax hike in 2003, a measure that voters defeated by a 2-to-1 margin.

Bentley declined to give specifics on his plan, but said he will be looking at a mixture of individual and corporate taxes. Bentley said he will not propose legalized gambling as a money source, as some lawmakers have suggested.

“The lower income probably will not be affected very much with these taxes,” Bentley said. The proposals, unlike Riley’s tax package, will not be presented as referendums so lawmakers have the final say, he said.

House General Fund Chairman Steve Clouse said there is no guarantee that lawmakers will accept Bentley’s ideas.

“I think the legislature will take a look it, start massaging it and see what it is palatable. Well, none of it is going to be palatable,” Clouse, R-Ozark, said.

The Republican budget chairman agreed that the state has run out of ways to “kick the can” down the road. “That can has got so many holes and bent up places that it won’t even roll anymore,” Clouse said.

Part of the reason for the grim budget outlook is that a voter-approved budget bailout for the General Fund ends at the conclusion of this fiscal year. Voters in 2012 approved taking $145 million-a-year for three years from a state oil and gas lease trust fund in order to avoid deep cuts in state services. Bentley said the state also needs to repay money borrowed from a rainy day fund and money taken from education funds for the General Fund.

The governor asked the crowd of educators to help persuade legislators who might be skeptical toward the idea.

“If the legislators get a little weak-kneed, I’m going to have to push them a little bit,” the governor said.

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