AFA Members Know Luther is the Right Choice

The election for the United States Senate is tomorrow.  AFA has endorsed Senator Strange because of his unwavering support of private landowner rights.  You might be interested in what some of your fellow members are saying:

“The 10th Amendment to the United States Constitution recognizes the sovereignty of the states.  Senator Luther Strange, as Alabama’s Attorney General fought tirelessly to oppose the Obama Administration’s attempts to erode the rights of the states.  He has continued this battle by supporting President Trump’s efforts to reign in the federal government’s overreach.  I am going to vote for Luther and suggest your consideration to do likewise.”  Gray Skipper, Vice President, Scotch Plywood Company, Inc., Fulton

“Tuesday, September 26th is election day in Alabama.  I hope you plan to vote and to vote for Luther Strange.  Luther is highly qualified and his leadership is well known.  For example, it was Luther who led the Attorneys General from states affected by the BP oil spill to convince Congress that those states should receive the BP money.  He has successfully prosecuted politicians for corruption.  He served our state with honor and dignity and will continue to serve the nation the same way.”  Ann Bedsole, Mobile

“Luther Strange has consistently and strongly supported forest landowners and the forest industry while serving as Attorney General.  He knows and understands our issues and will be a respected leader for us in the U.S. Senate.  He deserves our support.”  Fred Stimpson, President, Canfor Southern Pine, Mobile

“The leadership of Jasper Lumber is grateful that Senator Strange took the time to come visit our facility and to meet the hard working, dedicated people of Walker County.  Senator Strange is fully committed to small business and creating an environment in which small businesses can thrive and allow working people to prosper through tax reform and reducing bureaucratic policies that weigh down the opportunities for growth.”  Al Bracewell, President, Jasper Lumber, Jasper

“It’s been said that if you want to know how well someone will act in the future, look at their past.  The past track record for Luther affecting forestry is unwavering.  We’ll continue to have an advocate if Luther remains in the U.S. Senate.”  Montgomery Simpson, Governmental Affairs Manager, Weyerhaeuser

“Luther stands for the values that are the foundation of the Alabama Forestry Association, smaller government with accountability to the tax payer“  Hank Bauer, Jr., AFA President

The election tomorrow is tightly contested and it’s important that those supporting Luther turn out to vote.  Please let your friends, family and co-workers know the importance of their vote.  Luther Strange should clearly be the choice of landowners and the forestry industry.

 

Luther Strange Works to Protect Alabama Landowners

 

Quietly, behind the scenes and with no political objective, Luther Strange has worked to assist private landowners from government intrusion.  In many cases, the office of Attorney General (in conservative states) was the only check available to the inexhaustible thirst of the Obama Administration and the increasingly liberal court system that he appointed to infringe on the private property rights of landowners.

Here is one prime example:

In 2001, the United States Fish & Wildlife Service listed the Dusky Gopher Frog as an endangered species pursuant to the Endangered Species Act.  Several years passed and in 2009 (only after the Obama administration took control and a lawsuit was settled with the Center for Biological Diversity, an environmental advocacy group), the Service, in a proposed rule making, designated an area of Mississippi to be critical habitat for the frog.  This area was where the frog was currently located and the Service felt the need to protect the area to ensure the “conservation” of the species.

The environmental group objected to the proposed area complaining that it wasn’t suitable for the “recovery” of the species; a novel interpretation of the ESA’s statutory requirements.  The Service however agreed to this new characterization and issued a final rule that not only included the acreage in Mississippi, but also acreage in Louisiana that admittedly did not have suitable habitat for the frog and had not seen this species in over 50 years.

The Louisiana land was owned and leased by Weyerhaeuser which brought suit in federal court challenging the critical habitat designation.  The federal district judge ruled in favor of the Service and the case was appealed to the Fifth Circuit Court of Appeals in New Orleans.  A three judge panel (two Obama and one Bush appointees) reviewed the case and upheld the lower court ruling on a 2-1 vote.

In the dissenting opinion offered by Judge Priscilla Owen (the Bush appointee) she stated “the majority opinion interprets the ESA to allow the Government to impose restrictions on private land use even though the land: is not occupied by the endangered species and has not been for more than fifty years; is not near areas inhabited by the species; cannot sustain the species without substantial alterations and future annual maintenance, neither of which the Government has the authority to effectuate, as it concedes; and does not play any supporting role in the existence of current habitat for the species.”  She goes on to note that “if the Endangered Species Act permitted the actions taken by the Government in this case, then vast portions of the United States could be designated as ‘critical habitat” because it is theoretically possible, even if not probable, that land could be modified to sustain the introduction or reintroduction of an endangered species…..the majority opinion’s holding is unprecedented and sweeping.” (Emphasis added)

After the panel’s decision, Weyerhaeuser then asked for the entire appellate court to review the case.  Alabama Attorney General Luther Strange agreed with Weyerhaeuser’s position and Judge Owen’s analysis.  He led an effort to bring 15 state Attorney Generals to jointly petition the court to support the request for the full court to review the case.  His staff prepared the amicus brief that the state’s filed in the matter.

Unfortunately the request for rehearing was denied and now the case has been appealed to the United States Supreme Court.  Alabama and the other states have continued to fight this case and have now petitioned the Supreme Court to take up the case.

If this ruling is not taken up and overturned by the Supreme Court it will stand as the law for the 5th Circuit jurisdiction and can be relied upon as precedent by other jurisdictions.

As Alabama’s Attorney General, Luther Strange has distinguished himself in working diligently to protect the rights of private landowners.  The Dusky Gopher Frog is just one example of his efforts to curb the Government’s enthusiasm in utilizing federal laws, agencies and courts to direct land use and land management practices.

We have an opportunity to show our appreciation to Luther Strange.  The election for United States Senate is next Tuesday, September 26th.  AFA has endorsed Luther and he needs your vote.

Luther Strange Has Earned AFA Support

The headline in the Montgomery Advertiser on October 6, 2014 read “U.S. Supreme Court rejects Alabama school-funding case.”

We can (and should) thank Luther Strange for this victory.

There have been several important landmark dates in the history of the Alabama Forestry Association; the election that defeated Bob Riley’s $1 billion tax hike (Amendment One) and the transfer of power in the Statehouse in 2010 come quickly to mind.  However, the final disposition of the Lynch v. State of Alabama lawsuit has to be the most important for Alabama’s landowners.

The lawsuit, first filed in 2008, was brought by plaintiff’s challenging the constitutionality of Alabama’s ad valorem tax system.  Specifically, they sought to do away with the differential assessment for different types of land uses and to terminate the current use valuation for timberland owners.  Had they been successful, Alabama’s timberland owners would have been required to pay property taxes at a rate at least ten times greater than the current rate of taxation.

Upon his election in 2010, AFA staff met with Attorney General Strange and his legal team to discuss the Lynch suit.  He quickly grasped the importance of the lawsuit and pledged to devote the resources needed to effectively manage the litigation.  In addition, he agreed to allow AFA to assist the state with further legal expertise, conducting studies and preparation of expert witnesses.

Brought in federal court, the District Court for the Northern District of Alabama (Birmingham) ruled in favor of the State and then later the Federal District Court of Appeals in Atlanta did the same.

Finally, after six long years and hundreds of thousands of dollars of legal expense, the United States Supreme Court gave notice that it would not take up the case and the case was over.

The State’s defense was well managed and the lawyers that General Strange had on his staff were well prepared and very talented.

This outcome could easily have gone the other direction if the State of Alabama’s Attorney General’s office had been occupied by someone driven by political ambition.  Thankfully, that was not the case in this instance.  Luther Strange knew the law, knew what to do and did so without any consideration of the political consequences.

Luther Strange’s management of the Lynch lawsuit is just one of the reasons that the Alabama Forestry Association has endorsed him to be elected to the United States Senate.  He has helped Alabama’s landowners and deserves our support.  The election is next Tuesday, September 26th.  AFA highly recommends that you turn out and vote for Luther Strange.

Must See TV- RSA’s Bronner Encourages State Employees to become more “Hostile”

bronnerYellowHammer News reported yesterday that RSA chief David Bronner concedes that nearly $1 billion in taxpayer funding is keeping the Alabama pension system afloat.  See the article by mashing here.

 

The article also references a video of Bronner addressing the Alabama State Employees Association on September 24, 2015.  Part I of his speech can be found here and Part II is here

At the 8:18 minute mark in Part II, Bronner advocates for the State Employees union to become “stronger, tougher, meaner…more hostile” in their advocacy efforts in convincing state legislators and the governor to expand government.

As you will note from watching the videos, Bronner’s presentation included advocating for higher state taxes and expansion of Medicaid under ObamaCare.  He also takes an off-color shot at Donald Trump and attacks a state legislative pension reform committee, the Koch Brothers, Troy University and the Alabama Policy Institute.

According to the Birmingham Business Journal in an April 8, 2015 article “Top of the List:  Alabama’s highest-paid state employees,” Bronner is the highest paid state employee at $572,097.  Nine of the top 25 paid state employees are employed by RSA.  The article can be found here.

Meanwhile, Alabama’s pension system is only 65.9% funded (and that’s using RSA’s own numbers) with a total unfunded liability of $15.2 billion.  This is after the taxpayers have contributed nearly 12% of the entire discretionary budget, nearly $1 billion, in FY16 appropriations.

 

 

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…..

State Budget Mess- Part II

trustWell…here we go again. Time to buckle the chin straps and get the ankles taped. No, it’s not football season, yet…unfortunately.

But it is time to bang a few heads and tee it up for another round of Montgomery politics. This chapter may get rough and it most certainly will be ugly.

The Governor has called the legislature back for a special session to pass an appropriations bill that will address the spending needs of the General Fund agencies. They will convene at 4 p.m. this evening and will have 30 calendar days to conduct 12 legislative work days.

The need for the special session was never in question. The timing is causing a little head scratching. Everyone had been planning that the special session would begin in mid-to-late August. The Governor surprised most everyone by moving that time-table up a month.

So here we are…starting the special session today…and there is no plan. Nada. Zip. Zero. Well, that’s not entirely correct. There are a bunch of plans/ideas, it’s just that none of them seem to have the necessary votes to get to the finish line.

The Governor has offered his solution…raise taxes.  He has reduced his desired revenue increase package from $541 million down to $350 million (Ummm….see BP Settlement), but offers no restructuring of government.

Senate President Pro Tem Del Marsh has his gaming plan. But, even with Pat Dye’s help, there doesn’t seem to be much support for it and again, no restructuring of government.

House Speaker Mike Hubbard has proposed a mixed bag of Indian gaming and targeted taxes. It appears that no one in the Senate is interested in this plan, so if the House passes tax increases they will be out on a limb all by themselves, and again, it does not include any restructuring of government.

So where does this leave us?

At the conclusion of the regular session, the legislature passed an appropriations bill that spent only the amount of current revenue anticipated for FY16, approximately $1.65 billion. The Governor vetoed it. The media and the state agencies went nuts.

The taxpaying citizens of Alabama, however, have been strangely quiet.

Perhaps they believe that government should be fiscally responsible. Perhaps they believe that plenty of revenues are being sent to Montgomery. Perhaps they believe that government should be smaller instead of continuing to grow unchecked.

Perhaps our elected leaders should listen to those that elect them.

The General Fund appropriations bill is just a small part of the fiscal picture. The reality is that Alabama will spend nearly $28 billion in FY16. The Education Fund appropriation sets forth nearly $6 billion in spending. Add General Fund and Education Fund appropriations together and you get about $7.6 billion. The difference in this amount and the $28 billion is made up with earmarked taxes, fees and federal dollars.

Perhaps we need to set some priorities in state government and see that those are funded adequately.

But that’s not easily done. Earmarked taxes preclude the legislature from moving that revenue from one spending need to another as priorities change.

Removing earmarks is just a piece of the puzzle. What is needed is a master plan.

A master plan that acknowledges that our current public pension system is not sustainable; a plan that determines priorities for the state; a plan that provides flexibility for addressing these priorities; a plan that addresses the incredible growth of Medicaid; addresses prison overcrowding, etc., etc.

The average tax paying citizen wants to see the plan. Not just the revenue side, but the spending side as well. Until that plan is developed, there will not be support for increased revenues.

The plan may materialize in the special session, but certainly will not be completed. We have been waiting for the plan since, well…forever. Certainly since we were promised in 2012 that if we allow for a raid of the Alabama Trust Fund that the political leadership would begin the process of putting a plan in place.

But no difficult decisions have been made and now we find ourselves in another “crisis.” For goodness sake, they couldn’t even make the decision to get the state out of the retail alcohol business; much less address the systemic issues that are driving the state into an economic disaster.

Please…no more band-aids. Please don’t fall victim to the promise of a BP windfall. Please don’t enact “targeted” tax increases.

Let’s start the process of fixing this mess.

AFA Bandwagon Hits the Road Next Week

The 2015 Regional Receptions are about to get underway as we will be visiting Florence and Auburn next week. Actually, two receptions have already been held, prior to the legislative session, in Birmingham and Tuscaloosa.

But next week they begin in earnest and over the summer we should be stopping in a location near you.

DSC_0033There are several purposes for the Regional Receptions. First, and most important, is they provide an opportunity for the AFA staff to say thank you to our members for the support they provide to the Association. Good food and drink with no significant program…just good fellowship and fun.

DSC_0060

 

Second, we invite local public officials so that they can see and get to know our members. They have probably met most of you, but they rarely get an opportunity to associate you as an integral part of AFA.

 

Lastly, they provide us an opportunity to invite prospective members to come see what AFA is all about.

The receptions are made possible by our Associate Member Sponsors. When you attend an event, please take a moment to express your appreciation to them. Associate Membership is reserved for those companies that benefit indirectly from the timber industry. They recognize that we are all in this together!

DSC_0004Monday, June 22nd at 6pm, we will be at the River Bottom Grille in Florence. Located at a marina directly beneath the US43/US78 Bridge crossing the beautiful Tennessee River, this venue has proven to be quite popular with our local membership. Senators Tim Melson and Larry Stutts are expected to attend and provide a brief update on their take on their first experience in the Legislature.

DSC_0055On Thursday, June 25th at 6pm, we will be in the Auburn area at Coach Pat Dye’s Crooked Oaks Lodge. Regardless of your college football preference, visiting with Coach Dye is always a treat. He sure loves his trees! And his dogs are always sure to visit and provide entertainment

 

Great sandwiches and ribs provided by The Barbeque House (and don’t forget the world famous peanut butter pie) are always a favorite of the locals.

DSC_0050

Senator Tom Whatley and Representative Mark Tuggle (former AFA board member) are expected to be there to give us their feedback on the legislative session.

At both of these events, we are additionally hosting an AFA District Meeting. The state is divided into 10 Districts from which our board members are selected. AFA hosts a district meeting in each district every year. The District Meetings begin at 5 pm and are open to all current AFA members.

Please RSVP to Liz at lchambers@alaforestry.org or 334-481-2135 (or better yet, do it on-line at www.alaforestry.org) so that we can know how much food to order.

Congressman Palmer Confirmed for AFA Annual Meeting

palmerNewly elected Congressman Gary Palmer (R-Hoover) has confirmed that he will participate in the Alabama Forestry Association’s Annual Meeting to be held September 13-15th at the Perdido Beach Resort in Orange Beach, Alabama.

Palmer will provide a keynote speech and then will moderate a panel of national industry CEOs on Monday morning, September 14th. The CEO panel will focus on integrating and maintaining an ethical corporate culture during the process of restructuring. Participating on the panel will be Don Kayne, CEO of Canfor (recently made an acquisition of Scotch Gulf Lumber), David Nunes, CEO of Rayonier (recently went through a corporate divestiture) and Steven C. Voorhees, CEO of WestRock (new company name based on a recent merger between RockTenn and MeadWestvaco).

Congressman Palmer grew up in the small northwest Alabama town of Hackleburg and attended the University of Alabama where he was a walk-on member of the football team under the tutelage of legendary Coach Paul “Bear” Bryant. After earning a B.S. in Operations Management, he worked in the private sector for 12 years; including nine with two major engineering construction companies, before involvement with Focus on the Family led him to start the Alabama Family Alliance which later became the Alabama Policy Institute.

Palmer served as President of the Alabama Policy Institute for 24 years. During his tenure, API became a full-spectrum public policy organization that engaged in virtually all policy issues that affected Alabamians.

In 2014, he was elected to the 114th Congress and represents the 6th Congressional District. In Congress, Palmer is focused on paying down the national debt by cutting spending; regulatory reform by reducing the number and expense of federal regulations; lowering energy costs and spurring economic growth and job creation by accessing America’s vast energy resources; and replacing Obamacare with a health care plan the puts people back in charge of their health care decisions.

Palmer serves on the Oversight and Government Reform Committee and also serves on the Budget Committee as well as the Space, Science and Technology Committee.

Congressman Palmer declared his candidacy for the 6th District following the retirement announcement of 11-term incumbent Spencer Bachus. In the crowded field in the Republican Primary election, Palmer finished second behind State Representative Paul DeMarco. In the ensuing runoff, Palmer garnered 64% of the vote and in the General election defeated Democrat Mark Lester while receiving 76% of the vote.

Registration for the AFA Annual Meeting will begin soon.  Check the AFA website, www.alaforestry.org for on-line registration next week.

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.

2015 General Session of the Legislature is in the Books

statehouseYesterday, the legislature ended their work for the 2015 General Session by adjourning sine die after utilizing 29 of their allotted 30 days.

By the way, in the event you might be curious, “sine die” is derived from the Latin phrase “without day”. So when the legislature adjourns sine die, they adjourn “without assigning a day for further meeting or hearing.” Thank goodness for Wikipedia.

Why did they quit early?

 

Frankly there wasn’t much left to do except to pass a bunch of bills that have been piling up which weren’t all that important.

They passed the important bills though. The legislature’s main responsibility is to ensure the funding for the continuing operations of state government. They accomplish that principally through two bills; the Education Fund Appropriations and the General Fund Appropriations.

They had passed the Education Appropriations Act earlier in the session and the Governor had already signed it.

The challenging one, that has everyone wringing their hands in consternation, is the General Fund Appropriations Act which essentially allocates all the non-earmarked revenues for the benefit of non-education state agencies.

Last year’s General Fund appropriation was approximately $1.84 billion, which was based off of revenues made up of $1.64 billion of recurring taxes and $200 million in “one time” transfers (including $145 million that was taken from the Alabama Trust Fund).

This year, there were no more “one-time” transfers (the Band Aids) and the recurring taxes were level from last year at $1.64 billion.

piggybankSo they had $1.64 billion to spend and that’s the size of the appropriation bill that ultimately passed.

One could make a quite legitimate argument that the legislature has taken the fiscally responsible approach by only spending what they have.

Unfortunately, the state’s media, the general fund agencies and the Governor do not agree. The Senate passed the FY16 General Fund Appropriations Act yesterday and it was returned to the House of Representatives (because it had a few changes from the previously passed House version). The House quickly took it up, concurred with the Senate changes and passed it and sent it to the Governor.

The Governor vetoed it.

After passing the bill, the Senate adjourned sine die, so they were done for the session. The House chose to override the Governor’s veto and then sent it to the Senate. But, whoops…they are no longer around, so it dies without becoming law.

So what happens now?

Thankfully, Alabama’s constitution requires that the legislature pass a balanced budget. So they will have to come back at some point in a Special Session to finish their constitutionally mandated work.

The Governor will choose when that will be and what can actually be addressed during the session.

So what are the options that are on the table?

Option One. Force efficiencies in state government, take the savings and apply those revenues to adequately fund priorities. Sounds good right? Wrong.

The easiest and lowest hanging fruit was to get the state out of the liquor business. It would have generated at least $15- $20 million in savings. Dead on arrival. Legislators wanted to protect ABC landlords and the Governor wanted to protect his turf. The failure of that effort sent a signal that government efficiency measures were not going to happen

Option Two. Raise Taxes. Republicans raising taxes? Don’t laugh. It almost happened. The House Republican Caucus had essentially agreed to move forward with $150 million in new taxes. Thankfully, a small group of conservative House members came to their senses on the day of the vote and was able to convince their peers that they were about to take an action that they would deeply regret later on. But there are plenty members left that think targeted tax increases are ok. Tobacco and soft drink taxes seem to be especially vulnerable. They probably hope that maybe nobody will notice these taxes and they can get away with it without political consequences.

Option Three. Increase Revenues through gambling. Though nothing moved along these lines, it’s still a possibility.

Option Four. Do nothing. Be fiscally responsible and spend only the revenue that you have. Wait to see if the sky falls. This option was adopted during the regular session.

save-spendOption Five. Totally restructure how state government is funded. Set priorities, drive efficiencies, put limits on growth, set aside savings for economic downturns, remove earmarks from tax revenues, adopt “zero based budgeting” and develop a tax revenue base that is broad and equally distributed to all taxpayers.  And put the solutions in the Constitution to make sure future generations are protected.

The Governor desires a $2.3 billion General Fund appropriation.  Be prepared, because over the next several months, all you are going to hear about is that state government is going to shut down.

Most legislators would be happy with “level funding” at FY15 levels.

Regardless of who prevails, there will be a “frenzy” to find $200 million up to $700 million of new revenue.

Most likely a special session will result again in Option Four. We will be advocating for Option Five.

Stay tuned…..