As the financial problems of the state mount, the Legislature and Governor hold out hope that a solution will literally fall in their lap (or better yet, wash up on shore).
As we drill (sorry, I promise I will quit with the puns) into these problems, you will discover that there is an irony here that is quite disturbing.
Before we get into that however, lets first list some of the things the Governor and Legislature would spend money on if they had it:
The General Fund expenditure wish list includes raises for state employees (each 1% equals approximately $20 million), payback the ATF General Fund Rainy Day Fund ($161 million), payback the ATF for GF operating budget ($437 million), build new prisons ($600 million+), expand Medicaid (bottomless pit), hire more troopers, and hire more prison guards, etc.
The Education Fund expenditures wish list includes reducing classroom size, pay raises for teachers (each 1% equals $34 million), more funding for pre-Kindergarten program, more funding for AMSTI, expand technology to the classroom, etc.
So with no desire to increase taxes, how are we going to pay for all this?
Ask our leaders and they will tell you that they hold out hope that financial salvation is on its way in the form of the BP oil spill settlement.
The BP settlement is extremely complex. In an effort to make it as simplistic as possible, imagine that there are three “pots of money” involved.
The first pot is the civil penalties that must be paid to the federal government. Congress, through the July 6, 2012 Restore Act, set up the Gulf Coast Restoration Trust Fund for the coastal states that were affected. 80% of the civil penalties will be deposited in the trust fund and invested. Alabama, as one of these states impacted, is due its portion. These funds, however, are to be used only in the coastal region for cleanup, restoration, etc. It is from this “pot” that the Governor is planning to build the hotel/resort at the Gulf State Park.
The second pot is the economic damages incurred by individuals on a case by case basis for economic damages caused to them by the economy being influenced negatively by the oil spill. This fund has received much media attention of late as BP has now returned to court asking that the settlement that they had previously agreed to be set aside. Not only did they agree to it, but they were responsible for drafting it. These funds go to individuals and companies, not to the state.
The third pot is the “honey hole” for the Governor and Legislators. This money will come as either a settlement or as a result of a trial between the State and BP over lost tax revenues the state’s economy incurred due to the spill. If it comes to a trial, Alabama will be the first state (of five) to take their shot. The amount at issue is being estimated to be potentially in excess of $1 billion. That’s right…$1 billion.
AFA had the temerity to suggest (and actually introduced legislation) that the money from the third pot be put into the Alabama Trust Fund and protected and utilized for the benefit of our citizens in perpetuity. Not so fast….we were told by legislators and the Governor that our idea was not a good one and that it was dead on arrival.
But I digress…we can discuss the merits of what to do with the money at a later date (and I assure you, we will). The purpose of this article is to point out the troubling irony associated with this pot of gold.
You see…who is responsible for getting us this gold? The Attorney General is the state’s lawyer and he has been diligently working to see that the state gets its fair share. He is actually the lead attorney for all the states negotiating with BP. Because of Luther Strange’s professional and competent management, Alabama is situated better than any other state regarding these negotiations.
Wait a second….something doesn’t make sense here. Careful evaluation of the proposed FY15 General Fund appropriations bill shows that the Office of the Attorney General has been “zeroed out.”
If the State’s plan for funding its wish list is being controlled by the success of the Attorney General, wouldn’t we want to make sure his office is fully funded in order to have the resources to do the best job possible?
There seems to be a conflict between the constitutional office of Attorney General and other state leaders. These state leaders believe that the Attorney General has the capability to “self fund” the office through “future settlements.” What happens if these prospective settlements fail to materialize? Good question…and one that we will continue to look into.
Stay tuned…I don’t think this drama is near from over…..