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Inside the Statehouse

 


State Budgets: Priority Number One

After their successful special five-day Special Session, the Legislature has been in their Regular Session for a few weeks now. The Session will end in June so it is about one-fourth over. Almost one-third of the members are new, freshmen if you will. Even though they are, for the most part a bright and talented group, they are still wet behind the ears when it comes to legislative ways.

Most are still striving to find their way to the bathrooms. Most major issues, especially revenue enhancement measures, are addressed in the first year of a four-year quadrennium. Bless their hearts, right off the bat they were hit with a major vote to increase the gas tax to support an infrastructure plan. That will make the rest of their first year a downhill slide.

There are indeed other issues that need addressing in the good old Heart of Dixie. Most Alabamians want the right to vote for a lottery, which they would vote for in a New York minute. Most folks think it is ludicrous that we simply give our money to our sister states. It is not a popular subject, but our prison overcrowding problem has to be addressed. Democratic members are vitally interested in expanding Medicaid to improve and meet the state healthcare needs. Rural hospitals need help. There is also a lot of interest in reforming our criminal justice system.

Even though these above mentioned problems and priorities need to be addressed, there is one Constitutional certainty that the two state budgets must be crafted and put to bed. Our state constitution also mandates that they must be balanced.

The Education Trust Fund budget is in good shape. Tax revenues that support education grew tremendously last year. Lawmakers will have more money to appropriate for schools. In fact, this will more than likely be the largest education budget in state history.

The Education coffers will also be enhanced by the Supreme Court ruling that allows the state to collect online sales taxes. In Alabama state and local sales taxes are the cornerstone of support for basic services.

The state’s growth taxes, income and sales, are earmarked for education. This lack of growth in the dollars that support the General Fund has caused headaches for the legislative leaders who write these budgets. However, these budget leaders have done a good job. In this current year’s General Fund budget, they were able to increase funding for state prisons. They also added extra dollars for mental health and law enforcement, as well as the state court system. In addition, the State Budget gave state employees their first cost-of-living raise in decades.

The $2.04 billion General Fund budget passed easily in the 2018 election year session. It was a different scenario in 2015 and 2016 when lawmakers took multiple special sessions to pass the budgets and reject an array of tax increases and lottery bills to close a large funding gap.

A bill passed in 2016 during a Special Session created a salvation for the General Fund – a plan to allocate most of the one-million BP oil spill settlement monies. It allowed legislators to carry over $93 million from the 2018 budget to this year.

In actuality, the state legislative leadership has very little discretion in budgeting. The vast majority of our state dollars directed to our state General Fund needs are earmarked. The General Fund Budget accounts for only 13 percent of Alabama’s total spending of $15.6 billion. For example our states gasoline tax is earmarked for roads and bridges and goes into the Road and Bridge Fund, which currently totals $492 million in this year’s budget. Of course that will be increased beginning in September.

Most folks are not really cognizant of the fact that most legislators do not really have a lot of input into the state budgets. The chairmen of the Budget Committees of each body, Ways and Means in the House and Finance and Taxation in the Senate, do the work and hold the power.

The chairmen of these prestigious and powerful committees are Rep. Bill Poole (R-Tuscaloosa), who chairs the House Education Budget Committee, and Rep. Steve Clouse (R-Ozark), who heads the General Fund. Sen. Greg Albritton (R-Escambia), chairs the Senate General Fund committee and veteran Senator Arthur Orr (R-Decatur) heads the Education Finance Committee.

As legislators grapple with all of the issues on their plate, one thing remains the same, the State Budgets are Priority number one!

 

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