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…..

House of Representatives Delays Special Order Calendar

Tax Day in the House of Representatives did not occur today.

house chamberThe House of Representatives’ Republican caucus met today and decided to not go forward with their previously released Special Order Calendar that contained 12 bills, nine of which were tax increase bills.

 

Chairman of the House Rules Committee, Mac McCutcheon (R-Huntsville) stated on the House floor that the leadership had determined that further work was necessary on some of the bills to make sure that they were ready for consideration on the House floor and that the calendar would be voted on again in Rules Committee at some point in the future.

So, in other words, the tax increase bills are not going to be considered in the near future but remain alive as they work to determine what their budget plan is as they move to the end of the legislative session.

Whether they had the votes to pass the tax increase bills is subject to debate.

A strong contingent of House members has emerged that has expressed no interest in voting for tax increases, especially if they take the vote and find out later that the Senate does not plan to pass them (or even take them up).

The Senate has not indicated any desire to balance the budget through tax increases. That position, of course, is subject to change at any time in the process.

Stay tuned…..

Top 20 Fiscally Responsible Legislators- As of May 12, 2015

top20From the Weeds polled 10 respected Alabama legislative insiders to determine a Top 20 ranking for the most conservative legislators based on fiscal issues only. Their responses varied widely and there were a few surprises.

 

Coming in at #5 is Representative Phil Williams (R-Huntsville) who gained attention this past week for voting twice against a massive increase in the tax rate on lubricating oil. The House Ways & Means Education committee voted two times on the bill; with the first vote failing, while several Republicans flipped on the second vote to allow it to prevail. Representative Williams was the only Republican to vote “no” both times.

Also of note is #6, Representative Will Ainsworth (R-Guntersville). Ainsworth has introduced legislation to remove all statutory earmarks which would allow the legislature to prioritize spending in order to address the state’s budget challenges.

No surprise is #1 Trip Pittman (R-Daphne). Pittman is known as a strong advocate for fiscal responsibility. He has sponsored and managed a joint resolution expressing the legislature’s desire to not expand Medicaid, introduced legislation to protect the Rolling Reserve Act in the constitution and has championed the overhaul of the management of the two-year college system.

Also not a surprise is #2 Senator Paul Sanford (R-Huntsville). Sanford has introduced a bill, which will have a public hearing in committee tomorrow, that would take all tax revenues into one pot and then distribute 78% to education appropriations and 22% to state agency appropriations. This would allow the traditional General Fund revenues to grow at the same rate as that of the current Education Fund revenues.

Somewhat of a surprise is the lower ranking garnered by #12 Senator Arthur Orr (R-Decatur). Senator Orr has been a strong proponent of reducing the size of state government, sponsoring bills that would consolidate state agencies and remove the State of Alabama from the retail liquor business.

Today is Tax Day in the Alabama House of Representatives and there will be numerous other fiscal votes occurring, discussed or proposed over the next week, so the poll will be conducted again this coming weekend to see if there is any shakeup to the Top 20.

The Alabama legislature is composed of 140 members; 35 senators and 105 members of the House of Representatives. Recognizing that probably 120 members will be irritated at not being listed, here are the results:

(#1) Senator Trip Pittman
(#2) Senator Paul Sanford
(#3) Senator Clay Scofield
(#4) Representative Ed Henry
(#5) Representative Phil Williams
(#6) Representative Will Ainsworth
(#7) Senator Bill Holtzclaw
(#8) Senator Rusty Glover
(#9) Representative Mike Holmes
(#10) Representative Arnold Mooney
(#11) Senator Dick Brewbaker
(#12) Senator Arthur Orr
(#13) Senator Bill Hightower
(#14) Senator Phil Williams
(#15) Representative Barry Moore
(#16) Senator Tim Melson
(#17) Representative Mike Jones
(#18) Representative Rich Wingo
(#19) Representative Ken Johnson
(#20) Senator Paul Bussman

AFA Legislative Update Week 9

tax dollarsThe Alabama Legislature re-convened on Tuesday, May 5th for its 9th week of work for the 2015 Legislative Regular Session. Meeting on Tuesday and Thursday, the Legislature has now used up 20 of its allotted 30 legislative days. The House has introduced 646 bills and the Senate has introduced 467 bills. The Legislature plans to re-convene Tuesday, May 12th and is supposed to work a normal two day week.

Budget finance hysteria appears to have become the order of the day for the legislature.

The Tax & Spend Republicans in control of the House of Representatives have gone nuts. This week they released their plan to address the budget “shortfall,” which includes tax increases, enacting cost savings and pursuing a “compact” to give the Poarch Creek Indians exclusive control over gambling in the state.

The House leadership issued a “continuing” special order calendar which takes effect next Tuesday, May 12th. The calendar contains 12 bills, nine of which are tax increases.

Here are nine tax increase bills that are to be considered which will raise an estimated $145 million per year:

(1) HB572 (Todd) raising the tax on cigarettes by 25 cents a pack, $60 million.
(2) HB568 (Weaver) assessing fees on federally qualified health care centers, $3.5 million.
(3) HB581 (Beech) revising the business privilege tax, $39 million.
(4) HB240 (Johnson, K) repeals exemption from income tax withholdings, $12 million.
(5) HB593 (Johnson, K.) removing exemption on out of state residents that purchase cars in Alabama, $1 million.
(6) HB578 (Sells) increasing fees for issuing vehicle titles, $14 million.
(7) HB267 (Clouse) raising the tax on car rentals from 1.5% to 2%, $6 million
(8) HB587 (Collins) removes excise tax and applies sales tax to lubricating oil, $8.2 million.
(9) HB595 (Faulkner) requires owners of coin-operated amusement machines to pay a business license tax in lieu of sales taxes, $1 million.

Three other bills on the agenda address “streamlining” state government:

(1) HB584 (Holmes) consolidating properties owned by the Alabama Historical Commission into the Department of Conservation and placing its administrative duties in the Department of Archives & History, $1.1 million
(2) SB76 (Marsh) abolishes the 12 member Building Commission and transfers its duties to the Division of Construction Management within the Department of Finance. Also creates the Divisions of Facilities Management, Leasing Management and Energy Management, no material savings.
(3) HB257 (Knight) creates a new 12 member Permanent Joint Legislative Committee on Oversight and Accountability to provide continuous oversight of all state government operations, no material savings.

So this is what things have come to?

$145 million in tax increases and $1.1 million in reduced government spending.

Really?

Is it really easier for them to increase taxes than it is to actually cut the size of government?

Ironically, on Thursday, while the Senate was locked down in a filibuster that was designed to keep from getting to a bill that would remove the state from retail alcohol sales (estimated to save $15 million per year), the House Ways & Means Education Committee was ramming through a bill to increase the tax on lubricating oil (estimated to raise $8.2 million per year).

Regardless of what the leadership in the House of Representatives does, it appears that the Senate may take a more thoughtful and deliberate route.

orrRight now, the only material attempt in the Senate to address the budget question has been the legitimate efforts by Senator Arthur Orr to address meaningful government spending reform.

But that effort is meeting significant opposition….from both sides of the aisle.

Of course, there is also Senator Marsh’s proposal to authorize gambling at dog tracks, enter a “compact” with the Poarch Creek Indians and to institute a lottery. Though originally believed to have significant support, there are indications that this measure may not be on the fast-track.

Other than that, there is no defined plan to yet emerge in the Senate.

Here is the cold, hard, simple truth.  The state expects to collect approximately $1.6 billion in current revenues for FY16.  Perhaps a solution (that is not being considered) is to live within our means and pass a general fund appropriation bill that only spends what we have.

Stay tuned…..

ALERT! Massive Lubrication Oil Tax Bill Greased for House Passage

oil barrelsThe House of Representatives Ways & Means Education Committee gave a favorable report yesterday to legislation that would dramatically increase the tax on lubricating oil.

 

 

collinsHB587 sponsored by Representative Terri Collins (R-Decatur) removes an excise tax of $0.06/gallon and replaces it with the standard state and local sales tax.

AFA is currently surveying our membership, but the impact will clearly be felt by the loggers and sawmills.

skidderOne AFA sawmill member reports that their taxes would increase 952%!

Wow!

The bill was introduced on Thursday of last week and hurriedly referred to the Ways & Means committee chaired by Representative Bill Poole (R- Tuscaloosa).

pooleSurprisingly, the committee met on Wednesday to have a public hearing on the bill. After testimony concluded and in violation of prior precedent, Chairman Poole called for an immediate vote. Usually, a public hearing is held and the vote occurs at the next scheduled committee hearing.

Clearly, there was concern by certain members of the committee that this increase was too dramatic.

When the vote was called, a request was made that the vote be a “recorded vote” as opposed to a “voice vote.” Much to the consternation of Chairman Poole, Representative Ed Henry seconded the motion and there was no choice but to have the member’s votes recorded.

The vote on the bill failed by an 8-6 vote. Voting FOR the tax increase were Republicans Bill Poole, Steve McMillan, Alan Baker, Danny Garrett, Mark Tuggle and the bill’s sponsor Terri Collins.

Voting AGAINST the bill were Democrats James Buskey, Craig Ford, Rod Scott and Patricia Todd and Republicans Alan Boothe, Donnie Chesteen, Ed Henry and Phil Williams.

In an unusual move, Chairman Poole called a second special meeting of the committee on Thursday, while the House was engaged in a filibuster on another issue. Once again the committee took up HB587 and this time the bill was given a favorable report.

huntsville williamsThe only Republican voting against the bill was Representative Phil Williams (R-Huntsville). An amendment was offered to appease the counties and municipalities ensuring that a small percentage of the tax increase will remain for them (the original bill removed this).

The bill now continues on its lubricated fast track. It’s scheduled for consideration before the full House of Representatives on Tuesday, May 12th (next week).

The bill is but one of nine tax increase bills that the Republican leadership has proposed for consideration next week on a special order calendar.

AFA Legislative Update- Week 8

The Alabama Legislature re-convened on Tuesday, April 28st for its 8th week of work for the 2015 Legislative Regular Session. Meeting on Tuesday and Thursday, the Legislature has now used up 18 of its allotted 30 legislative days. The House has introduced 595 bills and the Senate has introduced 442 bills. The Legislature plans to re-convene Tuesday, May 5th and is supposed to work a normal two day week.

The State’s fiscal situation is clearly the number one item occupying the time of legislators.

dollars2The State of Alabama is a $28 billion enterprise, but the legislature principally focuses on two appropriation bills every year; the approximate $6 billion education fund appropriation and the $1.8 billion general fund appropriation (funds balance of non-education state agencies). The rest of the $20 billion+ expenditures by the state are earmarked monies derived from federal and local sources, fees and taxes.

The FY16 (begins October 1, 2015 and ends September 30, 2016) Education Fund Appropriation bill (SB179) has passed the Senate and is now in the House Ways & Means Education Committee. The FY16 General Fund Appropriations bill (HB135) has not moved out of the House Ways & Means General Fund Committee chaired by Steve Clouse.

Last year’s (FY15) General Fund appropriation was $1.877 billion. Recurring revenues attributed to the General Fund were $1.552 billion. Added to this is $325 million of “one-time” or “non-recurring” funds and prior year carryover. Of this $325 million of “one-time” revenues, $145 million came as a contribution from the corpus of the Alabama Trust Fund; this being the third year of a three year plan to remove money from the ATF to prop up the General Fund.

For FY16, recurring revenues are estimated to be $1.545 billion and available “one-time” funding is estimated to be $45 million, so essentially the state has approximately $1.59 billion of revenue available for the General Fund appropriation.

Governor Bentley has proposed a $2.03 billion FY16 General Fund Appropriation, exceeding projected available revenues of $1.59 billion by $703 million. His budget includes increasing Medicaid by $115 million and Corrections by $40 million and a payment of $32 million, the first of five payments required to payback the ATF General Fund rainy day account (required by the Constitution to be fully paid by 2021).

So where is the extra $703 million going to come from?

The Governor has proposed a projected $541 million in additional taxes and “un-earmarking” $187 million in taxes currently dedicated to the Education Trust Fund.

The $541 million in additional tax revenue is proposed to come from increasing the sales tax on autos ($200 million), increasing tobacco taxes ($205 million), requiring combined reporting for corporate income taxes ($20 million), increasing the financial institution excise tax ($1 million), removing exemptions to the insurance premium tax ($25 million), increasing the public utilities license tax ($47 million), eliminating exemptions for individual income taxes ($12 million) and increasing the auto leasing tax ($31 million).

The Alabama Legislature has not jumped on the Governor’s bandwagon.

They are looking at the General Fund appropriations bill a little differently. From their perspective, they would consider “level-funding” the FY16 appropriations at FY15 levels a great victory.

So, in their view, FY15 spending was $1.877 billion and they have $1.59 billion in revenue as things stand currently. Thus, there is an approximate $300 million “shortfall” that they have to address.

There are many suggested solutions being floated around.

One solution is to reduce expenses by consolidating state agencies and driving efficiencies. SB203 (Orr) would merge the Alabama Forestry Commission with the Department of Agriculture and Industries. It currently is pending before the Senate Finance & Taxation General Fund committee. SB115 (Orr) would phase Alabama out of the business of retail liquor sales. Potentially providing a $15 million annual benefit, it has passed out of committee and awaits consideration before the full Senate. The bill requires implementation by October 1, 2018, so this revenue would not be available until FY19, so it does not help with FY16. HB584 (Holmes) would consolidate the Alabama Historical Commission and the Department of Archives and History.

A second solution is to reduce expenses by reducing public employee benefits. SB410 (Shelnutt) reduces the number of state paid holidays, potentially saving $24 million annually. Bill has passed committee and awaits action before the Senate. HB588 (Greer) also limits the number of paid state holidays for state employees.

A third solution is to reduce expenses by shifting current obligations. HB490 (Clouse) suspends repayment to ATF for FY16.

A fourth solution is to increase revenues by increasing taxes pursuant to the Governor’s plan. None of these bills have been considered in committee; HB139 (McMillan) tobacco tax, HB142 (Hill) requiring combined reporting for corporate income taxes, HB240 (Johnson) repealing withholding exemptions from state income taxes, HB267 (Clouse) increasing sales tax on leased autos to 4%, HB268 (Clouse) increasing sales tax on purchase of autos, HB201 (Greer) increasing the financial institution excise tax, HB276 (England) imposing a public utilities license tax and HB277 (Knight) removing exemptions to the insurance premium tax.

The fifth solution is to increase revenues by taxing gambling activities. Democrats have offered two bills that would create a lottery; HB471 (Ford) is a proposed constitutional amendment to establish a lottery to fund Medicaid and HB472 (Ford) is a proposed constitutional amendment to establish a lottery to fund educational scholarships. Additionally, Republicans are expected to introduce legislation soon; the Marsh Plan would be a constitutional amendment to expand gaming at Poarch Creek Indian Casinos (requiring a Compact), existing dog tracks and create a lottery, and the expected Hubbard Plan that would by statute require a Compact with the Poarch Creek Indians.

A sixth solution is to redirect existing revenue through modifying the Rolling Reserve Act which could potentially “free-up” significant dollars. Estimated receipts for the Education Trust Fund for FY16 are $6.248 billion. The cap imposed by the Rolling Reserve Act is $5.961 billion, leaving $287 million in excess funds. SB281 (Holley), HB330 (Boothe), and HB322 (Poole) all would propose changes to the Rolling Reserve Act. None of these have received any action in committee.

A seventh solution is to redirect existing revenue through removing earmarks. SB12 (Sanford) establishes the Alabama Recurring Revenue Fund and all education and general fund revenues would be directed to the Fund which then would re-distribute the funds on a percentage basis to GF and ETF. This would allow the GF to participate in growth tax revenues. HB533 (Ainsworth) removes all statutorily enacted tax earmarks and directs them to the general fund. HB153 (Poole) is the Governor’s bill to un-earmark certain taxes currently directed to the Education Fund and re-direct them to the General Fund. None of these proposals have been addressed in committee.

Other solutions include HB475 (Knight) setting up a constitutional amendment removing federal taxes paid as an Alabama income tax deduction, HB478 (Knight) setting up a constitutional amendment removing federal income taxes paid as an Alabama income tax deduction while also removing the sales tax on food, and HB477 (Knight) constitutional amendment increasing ad valorem taxes 1 mill for General Fund. None of these bills have moved in committee and, because they require constitutional amendments, are not expected to be considered to help the FY16 appropriations.

As you can see, there are lot’s of proposals being tossed around and discussed.  AFA will continue to monitor these discussions.  Our position is clear…we do not support a “band-aid” approach to managing the state’s finances.  We believe that there is ample existing revenue and plenty of opportunity to continue to drive cost reductions in state government.  Systemic changes are needed in Medicaid, government structure and public employee benefits.  “Band-aid” solutions merely push the real problems down the road.

Stay tuned….

 

Sparks Fly at Monroe County Public Hearing

logtruckSenator Greg Albritton (R-Range) essentially controls the fate of HB183, a bill that enables the Monroe County Commission to hold a referendum to impose a five cents/gallon tax on fuel in Monroe County.

The bill is unique in that it transfers taxing authority on fuel from the legislature to the county commission perpetually. At first read, it doesn’t sound all that bad. If HB183 were to pass, the county commission must first pass a resolution setting the referendum. The resolution would contain the date of the referendum, how much tax (up to five cents/gallon) and the length of time the tax will be imposed (up to five years). Sixty days prior to adopting the resolution, the county commission must publish a list of transportation projects that will be addressed with the tax proceeds and only those projects will be used with the funds.

Ignoring the fact of imposing a new tax itself, that sounds like a reasonable process, right?

A careful reading of the proposed legislation tells another story.

HB183 not only would allow the commission to set this referendum, it conveys authority to set fuel taxes in the county in perpetuity. In other words, if the voters allowed the tax for five years, when that five years is up, the county doesn’t have to go back to the legislature to get additional authority to have another referendum to add another five years to the tax. Additionally, if the referendum were to fail the first time, the commission could hold additional referendums to try and get the tax at some later date without having to go back to the legislature for that authority.

That’s not good. That is really a “back door” home rule attempt.

Thankfully the voters of Monroe County get it. Last night, Senator Albritton held a public hearing in the Monroe County Courthouse in Monroeville. Over 100 people showed up to voice their opinion on the proposed legislation. In attendance were officials from the County that made a presentation in support of the legislation.

By all appearances, the proposed tax did not have much support in the audience. Loggers, timberland owners and farmers turned out to show the county officials that they were not happy with the proposed tax.

Senator Albritton deserves commendation on several fronts.

First, a public hearing was held. The county commission published notice of the local legislation (as required by law) on February 26, 2015. They formally adopted a resolution supporting the legislation prior to that. At no point in the process, did the county officials think that the public might want some input into this issue and they would never have had to face the public absent Senator Albritton holding this hearing.

Second, Senator Albritton has demonstrated the courage to listen to the voters and make his mind up independent of the pressure placed on him by the local public officials. The reality is that Senator Albritton is the new senator for Monroe County (Senator Hank Sanders also represents the county but was not present at the public hearing- he has already signed off in support of the bill) and his initial reaction is to want to work with the local officials. If he doesn’t support their wishes, it might make for a difficult experience for the next four years. However, he chose to have this public hearing in order to hear from his real constituents…the voters in Monroe County.

Senator Albritton now has a difficult decision to make. Kill the bill and offend the local public officials that support the tax increase or let the bill pass and allow the transfer of taxing authority on fuel from the legislature to the county commission and probably offend the voters of Monroe County along the way.

Whatever decision he makes, we should offer our support to him for approaching this issue in a thoughtful, intelligent manner and for listening to his constituents.

AFA is opposed to this legislation because of its disguised attempt at home rule and the poor policy of approaching rural road and bridge maintenance in a piece-meal fashion. AFA supports a policy that allocates the existing state diesel tax to the counties for this purpose.  This tax revenue is now solely at the discretion of the Alabama DOT and does not filter down to the counties.

Proposed Monroe County Fuel Tax to be Addressed at Public Hearing Tonight in Monroeville

albrittonSenator Greg Albritton (R- Range) has effectively put a hold on two pieces of local legislation proposed by the Monroe County Commission to enact a five cents/gallon fuel (gasoline and diesel) tax and a 25 cent tobacco tax. Both of these tax proposals, if they pass the legislature, will require a local referendum in order to be effective.

The fuel tax will be for a period of five years and may only be used for transportation projects specifically identified prior to the referendum. The tobacco tax will be dedicated to the county’s general fund.

The tax bills originated from the House of Representatives where they were approved by Representatives Harry Shiver and Thomas Jackson. Senator Hank Sanders has already indicated approval for the bills. The only person standing in the way of final passage is Senator Greg Albritton.

Senator Albritton has called a public meeting in Monroeville for Monday, April 13th at 6:00 pm in the New Courthouse. At this public meeting, Senator Albritton will allow advocates to speak for and against the bills.

Please help us get the word out to come to this public hearing.

AFA strongly opposes the fuel tax bill. Our position is quite clear. Currently the state taxes gasoline and diesel fuel. The gasoline tax is shared with the counties and municipalities, whereas, the diesel tax is not. AFA believes that the existing state diesel tax should be shared with counties and municipalities in the same manner as that of the gasoline tax.

Please be sure to come to the meeting and voice your opinion on this matter. If Senator Albritton only hears from advocates of the taxes, then he most likely will allow the bills to go to a referendum. We can stop these taxes by having a good showing at the public hearing.

This is how democracy is supposed to work. Let your voice be heard.

By the way, please give Senator Albritton a call and thank him for his leadership. He is going to be a great advocate for rural Alabama and he needs to hear from us.

Read My Lips….

bush41“Read my lips: no new taxes” is a phrase spoken by then American presidential candidate George H. W. Bush at the 1988 Republican National Convention as he accepted the nomination. The line later hurt Bush politically. After he was elected, tax increases were proposed as a way to reduce the national budget deficit. Bush ultimately compromised with the Democrat controlled Congress in the 1990 budget agreement which increased several existing taxes. In the 1992 presidential election campaign, Democrat nominee Bill Clinton used Bush’s own words against him while questioning Bush’s trustworthiness.

An interesting parallel is currently unfolding in Alabama. Governor Bentley was re-elected last fall running a campaign based on “More Jobs, Less Government and No New Taxes.”bentley2

Modifying existing taxes are now on the table for discussion in regard to developing Alabama’s FY16 budget. Does the general public understand the difference between existing and new taxes? The Governor appears to be counting on it. His challenge now is to convince legislators that the public will understand the difference.

The difference, however, is that the Governor will not be seeking further elective office. That’s not the case with the legislature. They are nervously watching what happened in the recent special election in Baldwin County where voters overwhelmingly (70%) voted against both new and existing taxes.

Alabama Unemployment

To Governor Bentley’s credit, “More jobs” appears to be a truth. Alabama’s unemployment has dropped to 5.8% at the close of February 2015. As the graph indicates, this is great improvement since 2010. Governor Bentley has pledged throughout his tenure that he would not take a salary until Alabama reaches full employment (defined as 5.2% unemployment rate). He has kept that promise.

With growing employment, the state is seeing increased income and sales tax revenues. These taxes, however, are earmarked for the education fund and really do not help the struggling revenues attributed to the general fund agencies.  Or can they?

What about “Less Government”?

Good question. Senator Arthur Orr has proposed several initiatives to reduce government spending. Legislative interest in this effort appears to be as popular as increasing existing taxes. President Pro Tem, Senator Del Marsh has stated publicly that state government needs to be reduced by an additional 9%.

Eliminating the state’s role in the retail sales of liquor is being discussed but appears to have a difficult future. Merging state agencies have been proposed but are not being seriously considered.

“Less Government” is code for less government employees and that’s obviously a tough choice for legislators to make. The public employees union and the state agencies themselves are lobbying frantically to make the choice even more difficult.

So where is this heading?

Many political insiders are beginning to think that “other solutions” are more politically palatable. Other solutions include a compact with the Poarch Creek Indians for taxing their bingo operations, with perhaps the consideration of expanding gaming throughout the state.

Also being considered is moving the education revenue growth dollars to the general fund and this appears to be gaining momentum. Translation- Modify or do away with the Rolling Reserve Act (also referred to as the Proration Prevention Act).

This Act requires that actual revenues that come in over a “cap” must be used as savings for future downturns in the economy to protect our education funding. AFA has a clearly defined position supporting the goals of this Act and supports legislation to make the Act a part of the state’s constitution.

So the question now is do we spend savings set aside for future downturns in education funding in order to prop up general fund agencies (while protecting and maintaining public employee jobs) or do we maintain fiscal responsibility and focus on reducing the size of these agencies?

Stay tuned….

Jeff Sessions – You Gotta Love Him

Jeff Sessions for President. There it’s out there….

sessions2Senator Jefferson Beauregard “Jeff” Sessions III, Selma native and proud AFA member, is clearly the best choice for the job. AFA headquarters, 555 Alabama Street in Montgomery, is now ground zero for the “Draft Jeff” campaign.  As the picture to the left indicates, Senator Sessions is willing to fight for what is right….even if it appears on most occasions that he is doing so by himself.

 

 

Of course this is being offered in a light hearted manner, but seriously….

Why not?

What better candidate is out there that is willing to stand up and take on Washington than Jeff Sessions? Who better exemplifies conservative values? Who better represents what Alabamians want in a leader?

Most importantly, what public official has done a better job at earning the trust of his constituents?

The answer is nobody. There isn’t one. Not a dad gum single one of the folks being mentioned as a candidate for President has the body of work that he has when it comes to conservative principles and looking out for the ordinary folks. One thing is for sure…with Senator Sessions you know exactly where he is positioned on public policy issues.

Watch this video as he takes on Gina McCarthy, the Administrator of the EPA. It’s priceless and vintage Sessions.

Look folks, we recently re-elected Senator Sessions to his fourth term as our United States Senator. He has done such a great job for Alabama that he didn’t even have any opposition. And now the rest of the country is starting to pay attention.

Think about this…the next President of the United States will determine the future make-up of our Supreme Court (hopefully, it will not materially change in the next few years). Who do we want in charge when that happens?