The liberal tax and spend disease permeating the Alabama House of Representatives appears to be contagious and has potentially seeped up to the seventh floor of the Statehouse, the home of the Alabama Senate.
On this, the 4th day of the 2015 2nd Special Session, the Alabama Senate’s Finance & Taxation General Fund Committee met and in a matter of minutes passed three bills that increase taxes, one bill that drastically changes the Rolling Reserve Act and another bill that transfers use tax revenues from the Education Fund to the General Fund.
The Senate Finance & Taxation General Fund Committee is composed of 14 senators; 11 Republicans and 3 Democrats. The votes came so fast and furious that it was difficult to follow, but here is what we know for sure. First, all of them passed. Second, one member, Senator Bill Holtzclaw (R-Madison) voted no to all of them.
The 10 other Republican members are Chairman Arthur Orr (Decatur), Clyde Chambliss (Prattville), Steve Livingston (Guntersville), Greg Albritton (Range), Tim Melson (Florence), Trip Pittman (Montrose), Paul Sanford (Huntsville), Larry Stutts (Tuscumbia), Jabo Waggoner (Vestavia Hills) and Cam Ward (Alabaster).
Senators Sanford and Stutts were not present for the meeting. Sanford said he left because he “couldn’t stomach watching” what was going to happen.
Supposedly, the Committee agreed to vote the bills out in order to allow the Leadership to continue negotiations throughout the weekend. The rationale offered was that the Senate needed to show a “good faith effort” to the House and the Governor that it was willing to “compromise” at some point in order to get an appropriations bill passed that “everyone could live with.”
In case anyone is wondering…the position of the Alabama Forestry Association is clear and has not changed throughout the 2015 Regular Session and the ensuing two Special Sessions.
Here it is:
The Alabama Forestry Association opposes any new revenue without systemic meaningful reforms that limit the size and growth of state government.
Do we support taking Education Fund revenues and shifting them to the General Fund? No. This does nothing to limit the size and growth of state government.
Do we support taking Education Fund revenues and shifting them to the General Fund if that is the only choice other than raising taxes? Yes, but only for a one-year period.
What exactly does it mean when we say “systemic meaningful reforms that limit the size and scope of state government?”
At a minimum, address the state pension system and Medicaid. Remove earmarks that limit the legislature’s ability to prioritize spending. Enact legislation that requires zero based budgeting as opposed to prior year budgeting.
No tax increase (or other measure like gambling or a lottery) is going to address Medicaid on a long term basis. Medicaid was funded at $685 million in FY15. The Governor requested $795 million in the Regular Session. He desires a whopping 16% increase. No taxes that the legislature passes will grow at that level and thus the state would be right back again looking for revenue in a short period of time.
Meanwhile, today, the House of Representatives passed HB1, their version of the General Fund Appropriations Bill. Their bill provides $1.765 billion in spending as compared to the FY15 spending of $1.839 billion and FY14 spending of $1.811 billion.
Keep in mind that the the FY15 and FY14 spending levels were artificially inflated by $145 million each year as a result of the removal of $435 million from the Alabama Trust Fund over a three year period, which is no longer available. Had this amount not been included, the resultant spending levels would have been $1.67 billion in FY14 and $1.69 billion in FY15.
The bill that passed during the Regular Session that was vetoed by the Governor appropriated $1.635 billion. That was the amount of revenue the State had prior to the recent tax increase proposals.
So the House version passed today includes approximately $130 million in new revenues including at least $107 million in new taxes.
The final passage vote was 59 for and 37 against. Republicans that voted against the bill were Bob Fincher (Woodland), Ed Henry (Hartselle), Mike Jones (Andalusia), Allen Treadaway (Morris), Steve Hurst (Munford), Ritchie Whorton (Owens Cross Roads), Phil Williams (Huntsville). 31 Democrats voted against the bill. 5 Republicans and 3 Democrats “passed” on the vote. All 59 votes for the bill were Republicans.
The legislature plans to reconvene on Monday and at that point most of the action will shift to the Senate. It will be interesting to see what the “deal” is that comes from a weekend of negotiations.