2016 Legislative Wrap Up- Part IV of V- Appropriations

dollars2Wednesday, May 4th, marked the close of the 2016 Alabama Legislature’s Regular Session.  Legislators passed the constitutionally required appropriations bills fairly early in the session which left time for debate on several high profile issues.  Many of these issues were not resolved which causes speculation that a special session may be called later in the year.

A detailed analysis of several legislative initiatives will be discussed over the next couple of days; I- Fuel Tax (see Here), II- BP Settlement (see Here), III- Prison Construction (see Here), IV- Appropriations (today), and V- Other Legislation of Interest.

Today….Appropriations

The Alabama legislature’s primary constitutional responsibility is to pass the appropriation bills necessary to fund the operations of state government for the next fiscal year.  Usually, they wait until the very last days of a session in order to accomplish this requirement, however, this year they passed the two main appropriation bills fairly quickly with the General Fund Appropriations bill passing on the 19th legislative day (out of 30 possible days) and the Education Fund Appropriations on the 25th legislative day.

Of note, once these two bills are passed by both houses and transmitted to the Governor, the Budget Isolation Resolution (“BIR”) is no longer required before addressing other legislation.  This is meaningful because to adopt the BIR, a bill must receive a vote in excess of 2/3 of the members present and voting at the time in order to receive consideration on the floor.  The Republicans hold 26 seats in the Senate and 72 seats in the House, both of which exceed the 2/3 threshold when all members are present.  This is why they are oftentimes referred to as holding a “supermajority.”  If the Republicans are working together as a caucus, the BIR is not a problem.  Absent the “supermajority”, the minority party (in this case the Democrats) could stop legislation from coming to the floor by voting against the BIR.

Enough with the parliamentary procedure lesson….

The Education Appropriations bill, HB117, sponsored by Representative Bill Poole (R- Tuscaloosa) provides $6.327 billion for FY17 education related expenditures.  This is an increase of $337 million in spending over the FY16 appropriations.  The cap imposed by the Rolling Reserve Act for FY17 was $6.432 billion (for more on the cap see this article).  The actual projected funding for FY17 is less than the cap, so therefore, all of the $337 million increase will be spent and nothing will be put into savings.

Included in the $6.327 billion in education spending is the Foundation Program for K-12 students which is funded at $4.033 billion for FY17, an increase of $192 million over the prior year.  By way of comparison, the highest funding for K-12 in the state’s history occurred in the FY08 budget at $4.15 billion and the next highest was $4.036 billion in FY09.  The Education Appropriations were subsidized in FY08 by draining a proration prevention account of $439 million and in FY09 by $437.4 million borrowed from the Alabama Trust Fund.

Though this year’s appropriation for the Foundation program would be the third highest in the state’s history, it is the largest non-subsidized amount.

The Republicans took control of the legislature in the 2010 elections.  Their first regular session in the role of leadership was in 2011 where they addressed FY12 appropriations.  Prior to this change in leadership, proration was declared in education spending in each of the 2008 through 2011 fiscal years.  Since the change of leadership, proration has not been needed.

Why?  One of the first legislative initiatives enacted by the new leadership was passage of the Rolling Reserve Act.  This act places a “cap” on education spending based on the prior 15 years of actual revenues.  Any actual revenue in excess of the “cap” is placed in a reserve account to be utilized during economic downturns and lagging revenues.

The cap has forced the legislature to budget in a fiscally responsible manner and as a result there has not been the need for proration.

The General Fund Appropriations bill, SB125 sponsored by Senator Trip Pittman (R- Montrose) provides for $1.847 billion in funding, an increase of $90.9 million over the FY16 appropriation.

By far, the largest appropriation in the General Fund Appropriations bill goes to Medicaid.  This year Medicaid funding was increased by $15.3 million to $700.4 million over the previous year’s spending authorization.

Ummm….an increase of $15.3 million, yet the media reports that Medicaid is suffering from cuts or is “experiencing a shortfall.”  The “shortfall” is derived from the department’s request of an additional $100 million this year over last year’s funding.

To put this into perspective the FY02 Medicaid appropriation was $231 million, which, when compared to this year’s $700 million, is an increase of over 200% in the last 15 years.

The next largest appropriation in the bill is that for Corrections which was funded at $412 million for FY17 compared to $197 million in FY02.  Again, a nearly 100% increase over the last 15 years.

Meanwhile, the Department of Agriculture & Industries was funded at $8.3 million in FY17 compared to $13.7 million in FY02, a 40% decrease.  Likewise, the Alabama Forestry Commission was funded at $6.7 million in FY17 (a $300,000 cut from last year) as compared to $14.2 million in FY02, a 53% decrease.

The General Fund appropriation for FY02 was $1.2 billion, when compared to this year’s $1.8 billion representing a 50% increase over 15 years.  Clearly, the growth in Medicaid and Corrections has swallowed all the growth in funding, and more, to the detriment of all other non-education functions of state governance.

What message does this send regarding our priorities?  Timber and Agriculture are two of the most important segments to the state’s economy.  At the rate that Medicaid and Corrections are expanding, the other General Fund agencies will soon be completely swallowed up.  To make matters worse, the other agencies are forced to adopt higher fees and earmarked taxes in order to make up their reduced budget appropriations.

While You Were Sleeping During the General Fund Debate….

save-spendIn 2015, the Alabama legislature made changes to the Rolling Reserve Act that are beginning to have an impact on the Education Appropriations process as the legislature works to finalize education spending plans for the FY17 fiscal year (begins October 1, 2016).

Originally, the Rolling Reserve Act (which was adopted in 2011 shortly after the Republicans gained control of the legislature) set a cap on education spending based on the prior 15 years average of actual education revenues plus 40% of any new revenue measures passed in the previous legislative session.  This was a vast improvement over the previous method of estimating how much revenue might come in for the year and appropriating that amount.

Additionally, the original Rolling Reserve Act would put Excess Funds (actual revenues that exceeded the cap) into a Budget Stabilization Fund (until it reached 20% of the current year appropriations for education spending; approximately $1.2 billion) and then would begin rolling over into the Education Trust Fund Capital Fund (which could be utilized for education related capital projects).

The original Rolling Reserve Act was a fiscally responsible and prudent budgeting tool.

So of course, the legislature had to change it; which they did during the second special session in 2015.  While everyone else was focused on trying to raise taxes to fund Medicaid through an agonizingly long legislative year, this bill changing the Rolling Reserve Act went practically unnoticed.

The new Rolling Reserve Act now sets a cap based on 14 of the 15 highest previously funded years, adds the amount for the Prepaid Affordable College Tuition (PACT) program and adds 100% of newly enacted revenue measures.  The result is a much higher cap.

Additionally, the new Rolling Reserve Act changes the distribution of any Excess Funds.  Now it only puts 1% of the prior year spending amount into the Budget Stabilization Fund (2% for FY15 only) up to 7.5% of the prior year expenditures (which would be approximately $450 million).  The remaining amount is deposited into an Advancement & Technology Fund to be appropriated in the next fiscal year for school related repairs, deferred maintenance, technology and equipment (read…slush fund).

So what’s the impact of these changes?

In FY15 (ended September 30, 2015), Excess Revenues for education were $140.1 million.  All of these funds would have been placed in the Budget Stabilization Fund pursuant to the original Rolling Reserve Act.  However the new distribution resulted in $118.3 million going to the Budget Stabilization Fund and $21.8 million went to the Technology Fund.

We are currently in FY16, but the estimates are that there will be $195 million in Excess Funds based on a cap of $5.95 billion (the amount that was appropriated) and estimated revenue of $6.15 billion.  The distribution, pursuant to the new Rolling Reserve Act will be $59.5 million to the Stabilization Fund and a whopping $135.5 million to be appropriated by the legislature for special projects in 2017.

As the legislature now considers the FY17 Education Appropriations, they are working off a cap of $6.43 billion (thanks to the new Rolling Reserve Act) while expected revenues are $6.33 billion.  Since anticipated actual revenue is less than the cap, there is no expectation of putting any money into the savings account for FY17.

But….spending on education will now go up an incredible $382 million over the prior year (FY16).

Thanks to the new Rolling Reserve Act, we now have a new cap that is higher than expected revenue and no savings will be put away….in spite of having an increase in actual revenue of $186 million.

Fiscal responsibility and prudent budgeting have been tossed aside.

Who was the architect of the new Rolling Reserve Act?

poolepittman2

Senator Trip Pittman (R- Montrose) sponsored it in the Senate and Representative Bill Poole (R- Tuscaloosa) sponsored it in the House.  Interestingly, these were the chairmen of the Education Appropriation committees in both houses.

In the Senate, one republican member voted against the bill….Senator Bill Holtzclaw.  Three other republicans “passed” on the vote….Senators Pittman, Scofield and Stutts.  22 Republicans voted for the measure.

In the House, the vote was 88-14.  The only republican members voting against the measure were Representatives Harbison, Henry, Holmes (Mike), Jones, Moore (Barry), Wadsworth, Whorton (Issac) and Wharton (Ritchie).

Good thing the AEA is not as powerful as they once were….right?

2015 2nd Special Session- Wrap Up

skyThe second Special Session of 2015 has finally concluded and the hay is in the barn. The Alabama Legislature passed several measures that allowed them to cobble together a FY16 $1.75 billion appropriation bill for General Fund spending on non-education state agencies.

 

This appropriation level is 4.5% less than the FY15 funding level of $1.84 billion.  According to the mainstream media, state employees and state agencies, the world is going to come to an end. “The Sky is Falling.”

What you don’t hear is that state government in FY16 will be 1.5% bigger than FY15.

sky2The State’s General Fund Appropriation represents only 6% of the total expenditures of the state. In FY16, the state will spend $29.4 billion and, by far (74%), the greatest source of funding is earmarked taxes and federal funds. That means the legislature only has control over 26% of state expenditures. That has to change, but we will address that in the future.

Back to what happened in the second special session, where the legislature essentially passed five meaningful pieces of legislation.

First was the increased tax on cigarettes which is estimated to increase revenue to the General Fund by $66 million. This bill passed in the House by a vote of 52-46. Of the 46 “no” votes, only 17 were Republicans. 48 Republicans in the House voted for the tax increase. In the Senate, the bill passed on a 21-13 vote. Of the 13 “no” votes, 9 were Republicans. 16 Republicans in the Senate voted for the tax increase. The Republican members that supported the tax increase were essentially telling the taxpayers of Alabama that no further reductions in state government were achievable.

The second and third items were referred to as Medicaid “provider” taxes that increase revenue to Medicaid (and thus the General Fund) by $17 million. An increase paid by nursing homes and pharmacies on their services were spread over the entire base of their clients. This additional revenue allows the state to match more federal dollars. Ahem…federal dollars are tax dollars as well, aren’t they?

Pharmacists will pay a “supplemental fee” of $0.15 for every prescription they fill in Alabama. In return, they will receive an increase in the amount of reimbursement they get through dispensing fees approved for Medicaid recipients. According to testimony before the legislature, a pharmacist will need to be serving a clientele composed of 8% Medicaid recipients in order to “break even.” So if they serve over 8%, they will make more money than before. Medicaid beneficiaries are estimated to be 25% of Alabama’s population. No wonder they agreed to this tax increase. The losers will be Alabama’s tax payers that pay federal taxes. Uhhh….isn’t that most of us?

The fourth major item was the transfer of part of revenues derived from the use tax to the General Fund. Previously earmarked for the Education Trust Fund, the use tax is a tax that is put on products purchased out of state to make up for the loss in sales tax from in-state purchases. Prior to the passage of this legislation, the use tax was distributed 25% to the General Fund and 75% to the Education Trust Fund. Now it will be 53% to the General Fund and 47% to the Education Trust Fund. This results in $80 million more to the General Fund and, of course, $80 million less to the Education Trust Fund.  But don’t worry, the education community has been well taken care of.

The fifth and final important item was a change made to the Rolling Reserve Act which sets a cap on education spending. At the end of each fiscal year, any “excess” between actual revenue the state receives and the cap is placed in a “stabilization” account. Prior to the change, all the excess transferred to the stabilization account was to be put into a proration prevention account, up to 20% of the prior year’s education appropriation (approximately $1.2 billion). Once that was filled up, any further excess could be used for any education related non-recurring capital related expense. This legislation changes the cap formula (takes out the lowest year of the prior 15 years appropriations, thus raises the cap allowing more spending) and also changes the distribution to the proration account (instead of 20% and $1.2 billion in protection, it’s now 7.5% or $450 million in protection) and also changes the rate of distribution to the proration account (unlimited previously, now its, for the first year, 2% of prior year education appropriations or an estimated $120 million and 1% each year thereafter).

So what does this mean? Well at the end of this fiscal year (September 30, 2015), there will be an estimated $150 million surplus. Previously, this surplus would have completely gone to fill the proration account. With this legislation, $120 million will go to the proration account and $30 million will be increased spending set forth in a supplemental appropriation that will come in the next Regular Session.

During the special session, education interests were screaming bloody murder about the “raid” to prop up the General Fund. Here’s the truth…after all is said and done, education expenditures increased by 1.42% for FY16. This does not even take into the account what will occur in future years with an increased cap, immediate spending from the surplus and, oh yeah…bills were passed during the 2015 Regular Session that resulted in increases to the ETF of approximately $40 million.

The drumbeat for raising revenue has already begun in anticipation of the 2016 Regular Session which begins next February where work will begin on the FY17 appropriations. We will continue to hear that the state will shut down, state parks will close, troopers will be off the roads and on and on and on….

By the way…did you know that the Alabama Law Enforcement Agency got an increase of 39% for FY16? Hmmm….wonder why they don’t tell us that?

Stay tuned…..

Alabama Forestry Foundation Improving Rural Alabama Education

education2A recent news article doesn’t provide very promising news for our education system. Mike Cason, with al.com, writes in his article Alabama students trail national averages in ACT results (found here) that Alabama public high school graduates in 2015 received an average composite score of 18.8 on the ACT while the national average was 21.

He goes on to say that things are even worse when broken down by subject matter. In particular mathematics (22% vs. 42% nationally) and science (23% vs. 38% nationally) were not very impressive.

The Alabama Forestry Foundation is working to correct that trend.

Through its Blackbelt Initiative, the Foundation is completing its third year of supporting two rural schools in order to improve math and science skills among K-6 graders. The Foundation sponsors a teacher “coach” at J.U. Blacksher in Monroe County and Thomasville Elementary in Clarke County. These teacher “coaches” provide training and support to other teachers to emphasize math and science excellence in all aspects of the curriculum.

We recently received some results from Thomasville Elementary that are very exciting.

After three years of immersion in the program, third graders exceeded the national averages (measured as a % of “readiness”) in mathematics (63% vs. 50% nationally) and science (35% vs. 29% nationally). The fourth graders were just a little behind in mathematics (32% vs. 45% nationally) but ahead in science (38% vs. 35% nationally).

What are the initial conclusions from this data?

It’s still very early in the process as we are only three years into the program, but two conclusions are emerging.

First, the program is working. Consistent testing has only been going on for three years, but we are able to determine that the third graders that were tested three years ago were far below the national averages and now the third graders that were tested this year are ahead of the national averages. The only change has been the Foundation’s program.

Second, the difference between the third grade and fourth grade data indicates that success is better achieved the earlier a student is exposed to the program.

If you would like to learn more about the Foundation and its Blackbelt Initiative view an informational video here.

The AFA Annual Meeting will be held at the Perdido Beach Resort in Orange Beach, Alabama on September 13th – 15th. If you have not already registered for the conference, you can easily do so by going to www.alaforestry.org.

This year we will have the inaugural Alabama Forestry Foundation Breakfast on Monday, September 14th. Attorney General Luther Strange will be our keynote and will discuss the critical need we have for improving math and science skills in rural Alabama.

Excellent Continuing Education offered at AFA Annual Meeting

beach

The Alabama Forestry Association’s Annual Meeting is coming soon and if you need another reason to come to the beach you might want to consider the Continuing Education Track offered on Sunday, September 13th.

 

We have an exceptional line-up to discuss Forest Landowner Issues that are both timely and informative.

The agenda includes presentations on the Endangered Species Act, the status of the Alabama Transportation Rehabilitation and Improvement Program (“ATRIP”) and the challenges presented in developing a major renewal of the Gulf State Park.

A focus of the Annual Meeting this year is improving access to international markets. Presentations will also be made on what to expect from the continued development of foreign energy markets, how to structure your small business to access these prospective markets and an in-depth look at the audit requirements for forest certification for resources used to produce products for these markets.

Continuing education credits are being awarded for legal, accounting, forestry and logging. If you are attending the AFA conference, the fee is only $75 and includes your lunch.

For more information, see the Registration Form located here.

The AFA Annual Meeting is being held at the Perdido Beach Resort in beautiful Orange Beach, Alabama, September 13-15. If you have not already registered, it’s easy to do by just going to www.alaforestry.org.

“Spirit” & “Nova” to appear at AFA Annual Meeting

tigerAuburn University’s famous eagles “Spirit” and “Nova” will be in attendance at the Opening Reception of the Alabama Forestry Association’s Annual Meeting on Sunday evening September 13th.  The birds will be available for photographs and are sure to be a hit with the children (both young and old!)

The birds have been invited by AFA to provide a highlight for the great work done by the Southeastern Raptor Center housed with in Auburn University’s College of Veterinary Medicine.

If you have not done so, you can register for the Annual Meeting by going to www.alaforestry.org.  You better hurry!  Rooms are filling up fast.  We expect record attendance this year.

In the mid-1970’s, Dr. Jimmy Milton founded the Southeastern Raptor Rehabilitation Center when the U.S. Fish and Wildlife Service brought six injured birds to the College of Veterinary Medicine and asked that the school become a rehabilitation hub for the Southeast. Dean Jimmy Greene, Dr. Greg Boring of Radiology and Dr. Milton arranged for Auburn University to become a regional center and accept injured birds of prey.

spiritDonations and volunteer work provided materials and labor to build a raptor barn behind the Small Animal Clinic in the late 1970’s. Birds were still treated in the hospital before being moved to small flight cages next to the barn. Later a hospital area was incorporated into the raptor barn.

In 1998 the Elmore Bellingrath Bartlett Raptor Center Hospital was opened off of Shug Jordan Parkway behind the College of Veterinary Medicine. The facility was made possible by a $300,000 donation from Dr. Woody Bartlett ’64 in honor of his mother, Elmore Bellingrath Bartlett, a noted Alabama philanthropist.

In 2002, the College of Veterinary Medicine opened the Carol Clark Laster/W.E. Clark Jr. Raptor Training Facility, which was made possible by Carol Laster of Birmingham. Laster, a retired junior high science teacher, donated $500,000 to the raptor center. Her husband, Dr. Russell Laster, is a 1951 graduate of the veterinary college. Mrs. Laster selected the Raptor Center for the gift after the death of her uncle W.E. Clark Jr., who left his estate to her care.

The Raptor Training Facility consists of 24 state-of-the-art mews and an office building. Non-releasable raptors are kept and trained at the facility for use in the educational programs. The Laster’s also contributed to the rehabilitation unit with the construction of six large flight aviaries for aerobic conditioning of releasable raptors.

In 2004, the Southeastern Raptor Rehabilitation Center (SERRC) was renamed the Southeastern Raptor Center (SRC) to reflect its multiple missions of rehabilitation, education and research.

Since its modest beginning, the Southeastern Raptor Center has treated and released thousands of birds of prey back into the wild. The educational unit has provided educational programs for thousands of schools, civic groups and churches in Alabama, Mississippi, Georgia, Florida, Tennessee and Kentucky.

The Alabama Forestry Foundation utilizes the services of the Raptor Center to provide a meaningful hands on experience for rural school children to understand the benefits forests provide to these amazing birds.  See-  http://www.alaforestrygovtaffairs.org/raptor-warning-birds-of-prey-invading-monroe-clarke-counties/

For an interesting story about the history of Auburn’s first eagle involving one of AFA’s members, see-  http://www.alaforestrygovtaffairs.org/afa-member-plays-role-in-auburn-university-mascot-lore/

Senator Paul Sanford: “To Heck with Sausage, Laws should be made like Barbeque”

We have all heard the saying “Laws are like sausages, it is better not to see them being made,” which is widely attributed to Otto von Bismarck, a German Prussian politician (1815-1898). A little research indicates that there is some controversy over its actual origin.

A competing theory indicates that the phrase actually originated in the United States from an unknown member of the Illinois legislature in the 1870’s who is reported as stating…”I have come to the conclusion that the making of laws is like the making of sausages- the less you know about the process the more you respect the result.”

porkRegardless of the origin, perhaps a better analogy for lawmaking can be drawn from the making of good southern style barbeque.

Tasty barbeque is derived from slowly cooking pork until it literally falls apart. In the same manner, good laws require the slow test of time and need to be pulled apart to the point that all potential inadvertent consequences can be evaluated.

Who better to guide the lawmaking process than the only master barbeque chef in the Alabama legislature?

sanford2Senator Paul Sanford (R-Huntsville) was born in 1967, graduated from Huntsville High School and the prestigious Culinary Institute of America in Hyde Park, New York. He was first elected to the Alabama Senate’s District 7 in a special election in 2009 to determine the replacement for Parker Griffith who resigned after being elected to Congress. He was re-elected in 2010 and again in 2014.

He is the great-grandson of “Big Bob” Gibson the famous barbeque pioneer from Decatur. Big Bob Gibson Barbeque is nationally known for its award winning white sauce and barbeque. Four generations of Gibson’s have now carried on the family tradition. Sanford’s grandparents moved to Huntsville from Decatur and brought with them the well-known name and recipes.

littlepaulsUpon his return to Huntsville after Culinary school, Sanford desired to carry on the family business but also wanted to chart his own course. He stayed in the barbeque business but founded Little Paul’s Barbeque to distinguish himself from his roots.

 

Distinguishing himself from others has become his trademark in the Alabama Senate as well. Considered somewhat of a maverick, Sanford has developed a reputation for not necessarily going along with the crowd. “Sometimes ‘no” is the best vote that I cast,” says Sanford.

He approaches every piece of proposed legislation from the standpoint of his strict adherence to constitutional principles. “I believe that our founding fathers intended for government to be limited, so I am going to be opposed to growing government…both in size and services. I am also going to make sure that the money we send to Montgomery is used wisely.”

The recently concluded 2015 General Session of the Alabama Legislature proved to be particularly irritating to Senator Sanford. He does not necessarily agree that there is a “short fall” in the General Fund. “We don’t have a revenue problem, we have a spending problem.”

The revenues available for the FY16 General Fund Appropriation are $200 million less than the amount appropriated for FY15. However, that’s primarily because the legislature no longer has the $145 million per year that was created by taking money from the corpus of the Alabama Trust Fund.

“I was opposed to taking that money when that legislation passed, and just because we no longer have access to it, I certainly don’t think we need to be raising taxes to cover the difference. We should have made some hard decisions then, but that did not occur and the can was kicked down the road.”

“There are lots of alternatives to reducing the size of government. I can’t believe we didn’t pass the bill to remove the ABC Board from retail sales. Who in their right mind would even think about putting Government into the liquor business today? That was $20 million right there. I just don’t think our guys are ready to take on all the lobbyists and former legislators yet. Ironically, some would rather raise taxes than irritate the government sector. Is that really what Conservative Principles and the Republican Party are about today?”

In this past session, he introduced legislation that would have combined all tax revenues into one pot and then redistributed the proceeds on a percentage basis to education and general fund needs. This distribution plan would have kept education appropriations at their current levels but would have proportionally split the “growth” of the tax revenue for future years. Currently, education gets the benefit of the state’s “growth” taxes.

His frustration with his colleagues is evident. “My bill did not get the consideration it deserved. It was killed in committee without any legitimate debate. I have serious doubts that, when the Governor calls a special session, we will take up anything that could be considered controversial, unless of course it is to extract more tax dollars from the Alabama economy.”

“I know one thing…if they try to just pass some targeted taxes, I am going to do everything I can to stop it. We don’t need more taxes; we need more flexibility to do what we are supposed to do as legislators. We need to prioritize the spending, but right now our hands are tied with all the earmarks.”

pork2Perhaps, like good barbeque, some ideas just take some time to be evaluated until they are ready to be served.

Representative Mike Holmes to Release State Budget Alternative

panicFirst there was the Governor’s plan which would increase taxes in targeted areas by $541 million, then there was Senator Del Marsh’s broad gaming solution and after that came Speaker Mike Hubbard’s plan raising taxes and giving exclusive gaming rights to the Poarch Creek Indians.

A fourth plan is about to be publicly released…and it’s certainly representative of thinking “outside the box.”

Representative Mike Holmes (R- Wetumpka) is offering the “Bold Tax Reform for Alabama” as a conservative alternative to previously released plans. Whether one supports it or not, it certainly is bold…

Holmes plan would require a constitutional amendment and would include repealing the state income tax. In return, the state sales tax would be expanded to include services, increased from 4% to 6.5% and most exemptions would be removed. The result is an increase of an estimated $475 million to the state.

Yes, it would be a tax increase. But before anyone goes nuts, the plan has much, much more to it.

First, the two main appropriations bills would be capped at FY15 baseline levels ($5.9 billion for the ETF and $1.85 billion for the GF) and would change annually based on changes with the Consumer’s Price Index.

Second, within the General Fund appropriation’s bill, Medicaid and Corrections would be capped relative to a percentage of total expenditures.

Third, immediate needs such as repayment to Alabama Trust Fund for the General Fund Rainy Day Account, funding the prison reform initiative and funding for $60 million bond for prison capital construction needs are all addressed.

Fourth, sales taxes would be removed from groceries. At an annual estimate of $330 million, this would reduce the burden on lower income taxpayers.

Finally, any excess funds left over cannot be used for recurring expenses. Excess funds are estimated to be $197 million the first year the plan is implemented.

With the Holmes’ plan the excess will be distributed; 10% to the Alabama Trust Fund increasing the amount available for General Fund Rainy Day Account, 25% to the Alabama Trust Fund increasing the amount available for the Education Fund Rainy Day Account, 25% to an Education Capital Project Fund, and 40% will be available annually for critical non-recurring needs appropriated by the Legislature. To the extent there is a remainder, the excess would go into the general corpus of the Alabama Trust Fund.

So, in essence, the plan will raise revenue (translation: raise taxes), but in return the state’s taxpayers are assured that growth in government is contained, priorities can be addressed and a fiscally responsible plan to grow savings is adopted so that the state will be prepared for another inevitable economic downturn.

The most intriguing part of it? It will be in the state’s Constitution. Future legislative bodies will not be able to simply ignore it when tough choices have to be made.

So what does the Alabama Forestry Association think about it?

“Obviously, when you are talking about change this dramatic, we will need to look carefully at the details. Clearly, we are not interested in the Band-Aid approaches that have been discussed and we certainly are not interested in raising revenue without some substantial reform measures being adopted. Representative Holmes’ plan appears to offer a thoughtful and meaningful approach,” said AFA Executive Vice President Chris Isaacson.

He went further to say, “I like the limits on growth, the required savings and the fact that all of it will be protected in the Constitution. We are interested to see what the economists predict the dynamic impact will be of putting $3.7 billion (income taxes not being paid) back into the state’s economy. Replacing a required income tax with a voluntary broadened consumption tax has a certain appeal to it. We look forward to seeing the plan in the form of legislation and we will make a decision at that point.”

Representative Holmes, on whether the plan would have a chance for serious consideration by the legislature, stated, “we have all been talking about really addressing systemic change, now is the time to have that discussion. It appears we will have a couple of months to get all the details out before a potential special session. We’ll see whether the state’s leadership is serious about truly fixing this mess we are in.”

Holmes is a member of a conservative group of House legislators that have been clamoring for meaningful reform to the way government is currently funded.

It will be interesting to see whether this group will coalesce around the Holmes’ Plan and whether the legislative leadership gives the alternative legitimate consideration.

Stay tuned…..

Alabama Forestry Foundation- Blackbelt Initiative (VIDEO)

The Foundation-LogoAlabama Forestry Foundation was founded in 1978 to advance the knowledge of the management and utilization of Alabama’s forests, to promote stewardship and sustainable management of Alabama’s forest resources, to protect the private property rights of Alabama landowners and to promote markets for Alabama forest products.

Education is a key component of the Foundation’s activity. Annual projects include Project Learning Tree, Teacher Conservation Workshops and the Architecture Student Tour in conjunction with Auburn University’s College of Architecture.

Another important educational project is the Blackbelt Initiative. The Blackbelt Initiative was instituted to promote career opportunities in rural Alabama’s forest industry by involving local public officials, educational professionals, business leaders, teachers, students and parents. Alabama’s timber industry offers a unique opportunity for rural students to learn a profession and return to their home communities to pursue employment. Too many of our good students are leaving rural Alabama and we will begin to feel that impact in the not-to-distant future.

In order to prepare these students for careers in forestry related employment, the Foundation recognizes the need for improvement in math and science skills.

To address this, the Blackbelt Initiative funds an Excellence in Math & Science Program at two rural schools; J.U. Blacksher in the Monroe County community of Excel, and Thomasville Elementary in Clarke County.  The Initiative also provides training support for teachers at McIntosh Elementary in Washington County.

forestThis program funds teacher “coaches” at the schools to provide support to teachers; assisting them to incorporate math and science skills within all aspects of the curriculum. Working closely with the Alabama Department of Education’s AMSTI professionals, the teacher “coaches” receive enhanced training and support to provide the best possible education and learning environment for these rural school children in grades K-6. Learning these important foundational skills will encourage the students to appreciate the future employment opportunities that are provided by Alabama’s forests.

Watch this video to learn more about the Foundation’s Blackbelt Initiative:

The Foundation’s critical work will be used demonstrate to public policy officials the need to better fund math and science skills at the earliest possible stage of a child’s education. The results the Foundation determines from this program will be communicated to these officials and will hopefully be used to encourage increased funding for AMSTI throughout the state.

This work would not be possible without the generous contributions that our members have provided to the Foundation. We gratefully acknowledge the generous support provided by The Sybil H. Smith Charitable Trust, The Ben May Charitable Trust, Boise, International Paper, John Estes Land Company, Louisiana Pacific Corporation, Scotch Land Management and the Weyerhaeuser Foundation.

The Foundation anticipates receiving a $250,000 grant for the FY16 school year to continue the Blackbelt Initiative. This grant, however, requires a dollar for dollar match. So we need your help.

Please consider making a tax deductible contribution to the Foundation’s Blackbelt Initiative in order for us to maximize the opportunities that this grant provides.

For more information on the Alabama Forestry Foundation, please visit www.alabamaforestryfoundation.org

Raptor Warning! Birds of Prey Invading Monroe & Clarke Counties

eagle2Next Wednesday, January 28th, representatives of the Southeastern Raptor Center housed within Auburn University’s College of Veterinary Medicine will be making a special visit to two schools in Monroe and Clarke counties. See: http://www.vetmed.auburn.edu/raptor/.

Sponsored by the Alabama Forestry Foundation as part of its Blackbelt Initiative, students at J. U. Blacksher (Uriah) and Thomasville Elementary (Thomasville) will see live birds of prey including eagles, falcons and owls up-close. As they hear about the impressive adaptations and behaviors of these remarkable birds, students will learn habitat, conservation and ecology of Alabama’s forests.eagle3

Yes…Auburn’s Eagles will be there! Nova (“War Eagle VII”), a golden eagle hatched in 1999, and Spirit (“American Emblem”), a bald eagle weighing nine pounds, are well known as part of one of the greatest football traditions in the country. See http://www.vetmed.auburn.edu/home/programs-and-centers/southeastern-raptor-center/about-the-center/about-our-eagles#.VL_SdS4nuss.

“By bringing the Southeastern Raptor Center to our Black Belt Initiative schools, we hope to pique the interest of students in the outdoors and in Alabama’s abundant forests,” explains Alabama Forestry Association Executive Vice-President Chris Isaacson.

The Alabama Forestry Foundation was founded in 1978 to promote the stewardship and sustainable management of Alabama’s forest resources. The Foundation develops programs that focus on K-12 students, teachers, landowners, and loggers with the goal of sustainably managing Alabama’s abundant and diverse forest resources.

Designed as a multi-phase program, the Alabama Forestry Foundations’ Black Belt Initiative strives to provide job opportunity awareness and enhanced math and science skills while providing a path to future employment in the forest industry for residents in Alabama’s rural communities.
eagle1“Through such interactive educational experiences as the upcoming raptor program at J.U. Blacksher and Thomasville, we encourage student dreams to soar to new heights,” shares Isaacson.

The presentation at J.U. Blacksher will begin at 9:00 am and the presentation at Thomasville Elementary will be at 1:00 pm. The presentations are anticipated to last an hour. AFA members are encouraged to come and visit and participate in the event. If you have any questions, please contact Ashley Smith at (334) 481-2133 or asmith@alaforestry.org.