Alabama Legislature 2016 – Day 1

statehouseThe Alabama Legislature convened yesterday for the first day of the 2016 Regular Legislative Session.  Both chambers met briefly and then adjourned to attend the Governor’s State of the State Address.

The first day saw 207 bills introduced, less than a normal first day.  This is most likely indicative that the mood of the body is to pass the budgets and get out of town.  Frankly, the legislators are still worn-out from a contentious 2015 that saw the regular session and two special sessions keep them in Montgomery for a great part of the year.

The good news is that the legislature and the Governor have indicated that they will not be seeking any new taxes.  Clearly, after last year, the members went home and heard a loud and clear message from their constituents that no new revenues are needed in state government.  The focus should be on doing the most with what revenues are available.

The focus this year will be on “zero-based” budgeting.  While many opinions are held regarding what that really means, generally it is understood that state agencies must approach their budgets with first identifying the priorities of the services they provide and then determining what resources are needed to achieve those priorities.  Lower priorities will most likely not be funded.  The current system of budgeting essentially takes last year’s appropriation and adjusting it to reflect increased costs and new programs.  This process does not allow for setting priorities.

Senator Arthur Orr (R-Decatur) introduced SB122, an Alabama Forestry Association sponsored bill that addresses workers compensation reform that will be beneficial to ForestFund, AFA’s sponsored workers compensation self insurance fund.  The bill was assigned to the Senate’s Fiscal Responsibility and Economic Development Committee chaired by Senator Phil Williams (R- Gadsden), who plans to hold a committee hearing to address the legislation as early as next week.  There will be opposition to this bill.

Also of note, Senator Cam Ward (R- Alabaster) introduced SB15 to un-earmark approximately $400 million in taxes to direct them to the General Fund as opposed to specific state agencies.  Included in his bill is the Forest Products Severance Tax and the Forest Product Processor’s Privilege Tax.  These taxes amounted to $5.865 million in FY15 and had previously been directed to the Alabama Forestry Commission.  AFC’s total budget for FY15 was $22.4 million which included the $5.865 earmarked tax and also a $8.757 million General Fund Appropriation.  AFC’s budget for FY16 (the current year) is $25.2 million which includes a $7.042 million General Fund Appropriation.  Potentially losing the earmark for AFC will have a dramatic effect on services provided to Alabama’s timberland owners.  Additionally, by removing the earmark, the bill also removes the statutory requirement that AFC must use 85% of the severance tax for fire protection.

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