Alabama Legislature Heads into Spring Break

The Alabama legislature will adjourn this week having completed 13 of its allotted 30 days for the 2017 General Session.  They plan to take a couple of weeks off for spring break and will return on Tuesday, April 4.

The number one priority for every legislative session is to pass the appropriation bills necessary to fund state government.  As such, this legislature is moving promptly as the General Fund Appropriations bill (HB155- Clouse) originated in the House and has moved through that body and now awaits consideration in the Senate Finance & Taxation General Fund committee.  The Education Fund Appropriations bill (SB129- Orr) originated in the Senate and has moved from committee and is expected to be considered before the full Senate today.

The General Fund appropriation includes an increase of $800,000 for the Alabama Forestry Commission for FY18 which begins October 1, 2017.  There is also a supplemental funding bill for the AFC (HB157- South) which will allow $550,000 to be drawn from the Emergency Forest Fire Fund to assist in funding for the current year’s (FY17) needs.  We anticipate that an additional bill seeking further supplemental funding for the current fiscal year to be introduced soon.

In the area of fiscal responsibility and limited government, a bill to phase out the state’s involvement of the retail sale of alcoholic beverages (SB160- Orr) passed out of committee and awaits consideration before the full Senate.

A bill to increase the state’s fuel taxes is rumored to be introduced soon.  The current discussion revolves around a 5 cent/gallon increase immediately and 2 cent/gallon increases in 2019 and 2021 for a total of 9 cents/gallon.  Additionally, Washington County has introduced a local bill (HB362- Beech) that will set up a county wide referendum to increase fuel taxes by 2 cents/gallon and the creation of a 1% sales and lease tax.  The proceeds will be earmarked for road and bridge construction.  This bill has passed the House and awaits consideration on the Senate floor.

AFA is proposing legislation to clarify and modernize the forest products severance tax and the forest products manufacturer tax (HB313- Beech, SB244- Albritton).  Both bills have passed out of their respective committees.  We anticipate that HB313 will be addressed by the House during the week of the legislature’s return from spring break.

 

AFA To Propose Changes to Forest Products Severance Tax Statute

Alabama first adopted a forest products “severance” tax in 1945.  The purpose of this tax was to “provide for the conservation of the natural resources of the state by protection of the forest products and development of the forestry program.”  As such, the proceeds of the tax were earmarked for the Alabama Forestry Commission.  The severance tax was based on the volumetric amount of wood products produced from trees severed in Alabama and was intended to be paid by the landowner.

In 1973, the statute was amended to include a second tax, referred to as the “processors” tax and was levied against the “processor of the forest products or the manufacturer using the forest products in an amount equal to 50% of the tax on the severer.”  The tax was intended to be paid by the manufacturer and not the land owner.

Therefore, when most people refer to “severance” taxes, they are really intending to include both the severance tax and the processors tax.

Over the course of time, the forest industry has changed dramatically.  In 1993, the legislature, recognizing these changes, once again changed the statute to allow taxpayers an election to either pay the tax based on the weight of wood received or to continue to pay based upon the volume of wood products produced.  The clear intent of the legislature was to allow this election for all forms of produced wood products, but unfortunately the actual statutory language (by the placement of a “period” instead of a “comma”) technically excluded sawmills from the election to use weight.

Recent interpretations of the statute have highlighted the need to remove the ambiguities and vagueness created by the archaic language of the law.  As such, the Association has drafted changes to the statute that will hopefully clear up the current confusion.

The proposed changes are intended to be revenue neutral; tax rates are not changed.  The language is updated to reflect current products and practices, retains the option for taxpayers to elect to remit taxes based upon volume or by weight, and simplifies compliance.

AFA plans to continue meeting with constituent groups, legislators and the state with the hope to introduce legislation in the next couple of weeks.  If you have any questions with regard to the proposed changes or desire to become involved in the process, please contact an AFA staff member.

2016 Legislative Wrap Up- Part III of V- Prison Construction

prisonWednesday, 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 (today), IV- Appropriations, and V- Other Legislation of Interest.

Today…. Prison Construction

Alabama prisons are currently occupied by 188% more prisoners than there are beds.  This is defined as “overcrowding.”  The prisons have 13,318 beds to house 25,102 prisoners.

On May 21, 2015, Alabama Governor Robert Bentley signed legislation, SB67 sponsored by Senator Cam Ward, which was intended to provide sweeping changes to sentencing and probation standards with the intent to reduce crowding to a level of 137%.

The changes seek to steer low-level offenders away from prison by creating a new Class D felony category and to reduce recidivism with making changes to probation and supervision.  The legislation was the product of a Prison Reform Task Force.

The Alabama prison system was placed in federal receivership in the 1970’s, which led to a court-ordered release of inmates.  The U.S. Department of Justice is investigating conditions at the state’s only prison for women after accusing the state of failing to protect inmates from sexual abuse and harassment.  The Equal Justice Initiative and the Southern Poverty Law Center have filed separate suits on behalf of state inmates to address safety, health and disability issues.

The changes made by SB67 have only recently begun to be implemented.  In February, 2016, the Alabama Board of Pardons and Paroles announced that it was hiring 100 new officers and another 23 probation and parole specialists.  Additionally, a new Day Reporting Center opened in Birmingham in January and others are expected to be opened throughout the state.  These changes will theoretically allow supervision of all prisoners that are released for parole.

The legislation also provides $4 million in funding to expand substance abuse treatment for probationers and parolees.

Interestingly, the Prison Reform Task Force recommendations make no mention about the need to construct new prisons.  In fact the task force was told that “Alabama cannot build its way out of the chronic overcrowding of state prisons.”

The Governor, however, has apparently come to a different conclusion.  While the changes created by SB67 were still in their formative stages, he proposed to the legislature a massive $800 million prison building plan that would result in the construction of 4 new prisons and the closure of 14 older facilities.

The legislation, SB287 sponsored by Senator Trip Pittman (R- Montrose) passed the Senate on a 23-11 vote.  Only five Republican senators voted against the plan; Bill Holtzclaw (R- Madison), Paul Sanford (R- Huntsville), Shay Shelnutt (R- Trussville), Paul Bussman (R- Cullman) and Clay Scofield (R- Guntersville).

The $800 million in funding is proposed to come from a bond issue that will be result in a $50 million payment requirement over the next 30 years ($1.5 billion repayment).  Proponents of the bill maintain that the $50 million will come from “savings” produced by consolidating the prisons (requiring fewer personnel) and reduced maintenance expense.

No economic study was publicly produced to evaluate whether the savings projection was realistic.  Additionally, no economic study was provided to determine the impact that prison facility closure would have on the local communities where they are currently located.  There was also no study discussing the impact on prison personnel that would be relocated.  In fact, there was no disclosure at all regarding where the new facilities would be constructed.

SB287 also set forth a no bid process for the construction project.

The bill reached the House, passed out of the Ways & Means General Fund Committee and was considered before the full House on April 28th, the 28th legislative day.  During House consideration, the bill became quite controversial.  Several representatives attempted to amend the bill.

Representative Mike Holmes (R- Wetumpka) offered an amendment that would preclude the state from closing an existing prison until the Department of Corrections had conducted an economic impact study to determine the impact of the closure on the region’s employment, economic growth and debt service (many communities have outstanding debt requirements for infrastructure they constructed on behalf of the prisons).

Representative Holmes’ amendment passed on a 49-44 vote and the proponents of the legislation were clearly not pleased.  Voting on the prevailing side were 23 republicans and 26 democrats.  After considerable arm-twisting, the vote was reconsidered and this time the amendment failed on a 54-33 vote.  7 republicans and 9 democrats changed their vote.  The republicans were; Dickie Drake (Birmingham), Mickey Hammon (Decatur), Corey Harbison (Cullman), Steve McMillan (Bay Minette), Barry Moore (Enterprise), Jim Patterson (Meridianville) and Ritchie Whorton (Owens Cross Roads).

Later in the debate, Representative A.J. McCampbell (D- Livingston) offered an amendment that would require the DOC to produce a report by the 25th legislative day of the next regular legislative session and would then allow the legislature to approve or reject the report.  If the report was rejected, no bonds would be let and no project would be built.  Surprisingly, McCampbell’s amendment passed on a 49-35 vote with 23 republicans and 26 democrats supporting it, very similar to the first Holmes’ amendment vote.

With this amendment, the bill then passed the full House and was sent to the Senate to either concur with the changes or to go to conference committee.  Obviously, the bill’s proponents were not happy with the amended bill.

Upon arrival in the Senate, the bill now had 2 legislative days remaining for passage.  Intense negotiations began and it appeared that the senate was posturing for a filibuster of the bill.  The Senate voted to send the bill to conference committee where negotiation proceeded throughout the 29th day and into the 30th day.  Ultimately, late on the 30th day, a compromise substitute was developed.

The substitute would essentially reduce the amount of the bond issue from $800 million to $550 million reducing the number of prisons to be built and added some additional transparency language.  The McCampbell amendment was stripped from the substitute.

The Senate then began a filibuster on the bill on the last legislative day.  The filibuster led by Senators Paul Sanford (R- Huntsville) and Vivian Figures (D- Mobile) lasted until about 10:30 pm when it was ended by a cloture petition that passed on a vote of 23-9.  There are 26 republicans in the senate and 23 of them voted to close debate (3 republicans abstained; Paul Sanford, Shay Shelnutt and Larry Stutts).

The bill received final passage at approximately 10:45 pm and was sent to the House for concurrence.  The House rules allow for debate on this motion and it would have required invoking cloture in order to get it passed prior to the midnight deadline.  The House public viewing gallery was packed with lobbyists holding their collective breaths.

What transpired was quite interesting.  The bill was never brought up for consideration.  House Speaker Mike Hubbard later told reporters that there were not enough votes to stop the debate and so the bill died.  Supposedly, many House members were uncomfortable voting on the hastily negotiated substitute.

The Governor, obviously disappointed, is considering whether to call the legislature back to Montgomery to address the issue.

AFA Position:

The Alabama Forestry Association supports the reforms passed in the 2015 session and believes that adequate time should be given to see if this legislation results in positive improvement in the prison crowding challenge.

With respect to new construction, AFA supports a fiscally responsible and transparent solution.  The original construction bill has a $50 million payback requirement that, if the savings are not generated, will fall back to the state’s General Fund appropriations causing even more stress on an already tight budget.  If new prisons are ultimately determined to be the answer, AFA supports building one at a time, rather than a massive construction project.  Additionally, AFA believes that a “design, bid, build” model for construction is better for Alabama’s taxpayers rather than the proposed “negotiated” no-bid solution offered in the current proposal.

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.

Another Special Session Note

Feed The Pig!

Please sit down before you read this….

pig1

The mainstream media has been front and center on feeding the frenzy surrounding the Alabama legislature’s failure to pass a FY16 General Fund Appropriations bill. Often referring to the issue as a “crisis”, they repeatedly refer to the $200 million difference between actual revenue and the desire to fund at FY15 levels as a budget “hole,” or “deficit,” or “shortfall.” They go further to characterize the legislature’s inaction as “irresponsible,” “unconscionable” and “reprehensible.”

Say it enough and it becomes fact.  Legislators are now spewing the same rhetoric.

So, it was with some degree of surprise (sitting down yet?) to read Kyle Whitmire’s article in al.com discussing what would happen if the fiscal year begins without an appropriations bill passing to fund state agencies (see: “What happens if Alabama doesn’t have a budget by October?” at http://www.al.com/opinion/index.ssf/2015/08/what_happens_if_alabama_doesnt.html#incart_river).

According to Whitmire, 1975 was the last time the state began a new fiscal year without any spending authority. It’s an interesting read on Governor George Wallace having to call four special sessions in order to finally get a budget.

But buried in the article is a more compelling note.

Whitmire states that the legislature passed a $188 million General Fund appropriations bill on October 9, 1975 that included a raid of $30 million from Education appropriations. “In today’s money that would be equivalent to $824 million. Last year’s General Fund budget was almost twice that.”

He goes further “And much like today, the state’s Education Trust Fund dwarfed the General Fund. When the Alabama legislature finally passed an education budget in November of that year (1975), it appropriated more than $800 million to colleges and schools. In 2015 dollars that’s about $3.54 billion. Earlier this year, the Alabama Legislature approved a $5.98 billion education budget.”

Wow! How did we get to where we are?

Hurricane Season has begun and there is a Low Pressure System forming over the Statehouse

hurricaneJune 1st marked the official start of Hurricane Season and the first dark clouds are forming in Montgomery over 11 South Union Street, the home of the Alabama Statehouse.

 

The Alabama legislature finished up its 2015 Regular Session without passing a General Fund appropriation bill for the FY16 operations of the non-education agencies of state government. Therefore, a special session looms sometime during the summer months; exactly when it will occur, will be up to the Governor.

If the currently forming low pressure system grows to a full blown storm, the first named storm of the season might be Tropical Storm Ainsworth, named for Representative Will Ainsworth (R-Guntersville).

Representative Ainsworth introduced legislation during the Regular Session that would “un-earmark” all statutorily earmarked taxes.

Why is that important?

Before we get into that, let’s put some perspective on the General Fund Appropriations bill.

For FY16 (October 1, 2015 through September 30, 2016), the state is expecting approximately $1.64 billion in recurring revenue for General fund operations. The current year appropriation (FY15) was $1.84 billion. So there is a “perceived” shortfall of $200 million.

During the Regular Session, the legislature passed a $1.64 billion General Fund Appropriations bill, but the Governor vetoed it. The Governor wants to not only provide level funding, but also wants to expand the appropriations to enhance Medicaid and Corrections spending and also retire debts. In order to accomplish this, he has proposed $541 million in new taxes to cover the difference, much greater than the “perceived” shortfall.

The state has two primary appropriations bills, the Education Fund Appropriations and the General Fund Appropriations (all non-education related agencies). The two appropriation bills are offset by revenues that are generated through taxes, fees, etc.

The Education Fund Appropriations are offset principally by income taxes ($3.7 billion estimated for FY16) and sales taxes ($1.78 billion). These two taxes are considered “growth” taxes. The income tax revenue is directed to education through a provision in the Alabama Constitution. The sales tax revenue is directed to education through a statutory law. These “directives” are also referred to as “earmarks.” Therefore, the funding for education is “earmarked.”

The General Fund Appropriations are offset by over 40 various taxes that are not “earmarked” for any specific purpose. As mentioned previously, these taxes and fees add up to $1.64 billion. These revenue sources have had little to no growth in recent times.

And that’s a problem, because expenses in the General Fund agencies continue to grow. Especially Medicaid and Corrections.

Now back to Tropical Storm Ainsworth.

ainsworth2Representative Ainsworth plans to continue to push for “un-earmarking” the statutorily “earmarked” taxes. He maintains that this would give the legislature the flexibility to address priorities and to allow the entire government to benefit from future growth taxes.

The income tax will not be affected with his proposal, as it is protected in the Constitution and would require a Constitutional Amendment and a vote of the people. The main one that would be affected is the sales tax.

The education community is going nuts over this idea.

Why is that? Because they are concerned that if you remove the earmark to education, the legislature might be tempted to swipe some of that revenue and use it for General Fund purposes. In other words, they argue that “money from kid’s education will be used to fund prisoners.” Hard to disagree with that.

However Representative Ainsworth is not advocating providing less funding to education. He is thinking about the future years. If the current “growth” tax revenue (income and sales) is “locked-in” for education purposes, then so is the future growth that comes with those taxes.

He believes that the future “growth” should be shared with the General Fund agencies, and that future growth will dramatically assist in reducing the year-to-year struggle to find revenue to offset growing needs in the General Fund appropriations.

Historically, going back to 1960, Representative Ainsworth maintains that the income tax revenue has only gone down, compared to the prior year, three times; 1982 (1.82%), 2002 (1.5%) and 2009 (7.54%). Sales tax revenue has only gone down two times; 2001 (1.11%) and 2009 (9.86%).

By the way, the FY16 education appropriations bill funded education at one of the highest levels in the state’s history; $6.0 billion as opposed to the all-time high of $6.7 billion in 2008 (prior to the recession and the beneficiary of federal stimulus dollars).

But the education community is adamantly opposed to this (as are other state agencies that have earmarked revenues) and will put up a tremendous fight to oppose his legislation.

Thus the looming tropical storm. Stay tuned….

It’s Déjà Vu All Over Again

yogi4 Yogi Berra’s quote from the 1960’s is fully applicable to the budgetary mess that Alabama’s political leadership finds itself in for the FY16 General Fund Budget.

 

“Déjà vu” is French for “already seen” and is defined as a phenomenon of having the strong sensation that an event or experience currently being experienced, has already been experienced in the past, whether it has actually happened or not.

Here is a short trip down memory lane…

In 2012, the Legislature and Governor determined that revenues for General Fund operations were still languishing from the economic recession. They recognized that there was opportunity for downsizing state government, but needed time to get it done. In the interim, they asked the voters of Alabama to approve removing $145 million a year from the Alabama Trust Fund for three years in order to give them the time to make systemic changes.

Bumper StickerThe Alabama Forestry Association opposed this plan and was one of the few special interests that expressed its position. However, Alabama voters approved the plan, but they also sent a clear message; enact the reforms and, oh yeah, by the way, pay the money back.

 

First, let’s look at how the payback is working.

In 2013, based largely on AFA’s grassroots work, the first bill passed by the legislature and signed into law was a payback plan for returning the $435 million back to the Alabama Trust Fund. In the FY14 appropriation bill, $5 million was repaid. In FY15, $10 million. In the recently vetoed proposed FY16 appropriation bill, $15 million was included for repayment.

So it appears that the legislature is honoring its commitment to repay these funds.

Ummm, maybe not.

Representative Steve Clouse (R-Ozark), the Chairman of the Ways & Means General Fund Committee, introduced HB490 during the Regular Session. This bill would have put off the repayment plan by one year. Thankfully the bill did not get out of committee. But it will probably be back during a special session.

yogi3And, frankly, it will probably continue to emerge year after year. The repayment plan was designed to be somewhat easy up front and more difficult in the out years; because, of course, the legislators that designed it will not be around to deal with that problem down the road.

The repayment was a 13 year plan, starting in FY14 ($5 million) and ending in FY27 ($53.7 million). We suspected then that future legislators would balk when it came time to make these payments and it’s just going to get harder as time goes on.

Now let’s look at the restructuring and/or downsizing of government.

Consolidations? A few. A newly created Alabama Law Enforcement Agency combined all the police functions into one entity. Savings? Not sure, maybe a little. Also, all the Information Technology functions have been combined. Savings? Again, not sure, but avoided future costs most definitely.

Elimination of state functions? Nope. The easiest one would be removing the state from the retail liquor business. Estimated to save $15- $20 million annually, the effort failed miserably as certain legislators wanted to protect constituents that have long-term sweetheart lease deals with the state.

Un-earmarking taxes? Nope.

Combining budgets? Nope.

Pension system reform? Nope.

Medicaid reform? Yes, but will it really save money? Not sure until the changes get adopted several years down the road.

Prison reform? Yes, but it actually required $25 million in additional funding for the short term.

The picture is becoming clear. There has been no meaningful, systemic restructuring of state government since the promise was made in 2012.

A good read on this topic is provided by Kyle Whitmire of Al.com. You can read “Bridge Loan to Nowhere: How Bentley and Lawmakers squandered Alabama’s Savings for Nothing.”  see:  http://www.al.com/opinion/index.ssf/2015/06/bridge_loan_to_nowhere_how_ben.html#incart_m-rpt-2

So now fast forward to 2015.  Same problem, but this time the proposed answer is tax increases?

Albert Einstein is attributed with the following quote; “Insanity is doing the same thing over and over again and expecting different results.”

yogiPerhaps our public policy leaders have adopted another Yogiism. “When you come to a fork in the road, take it.”

AFA Legislative Wrap Up- Week 10

dollars1The Alabama Legislature re-convened on Tuesday, May 12th for its 10th week of work for the 2015 Legislative Regular Session. Meeting on Tuesday and Thursday, the Legislature has now used up 22 of its allotted 30 legislative days. The House has introduced 669 bills and the Senate has introduced 481 bills. The Legislature plans to re-convene Tuesday, May 12th and is supposed to work a normal two day week.

As we have discussed previously, the Legislature is mired in the midst of determining what to do about its main responsibility- passing a balanced budget for the state. This is accomplished by passing appropriations bills that set forth spending based on projections on what the anticipated revenues will be for the year.

Alabama, in FY14 (which is the latest full year of data available, as we are currently in FY15), spent $28.9 billion in total. The revenue to offset that spending comes from a variety of sources including state taxes and fees and federal funds.

The Legislature focuses on two primary appropriations bills; the $6 billion education fund that allocates for education related expenses and the $1.85 billion general fund (FY15 appropriation…more on this later) that allocates for all other state agencies.

Almost all of the remaining revenue is already dedicated to certain spending through statutory or constitutional “earmarks.” The practice of earmarking was adopted historically, frankly, because the citizens didn’t trust their lawmakers to spend their dollars wisely. Earmarks ensure that revenues are spent in the manner that the voters desire.

Tax revenue for the state is made up of numerous types of taxes.

Among these various taxes, “Growth” taxes are those revenue streams that increase during improving economic times. Calling them “growth” taxes is probably a misnomer because they also rapidly diminish during weak economies. Alabama’s “growth” taxes are its income and sales taxes.

The Education Fund bill’s expenditures are offset by revenues generated by earmarks of the growth taxes. The General Fund bill’s expenditures are offset by revenues generated by non-growth taxes.

Because of this dynamic, two things occur.

First, during periods of economic growth, revenue for education expenditures grow, while funds for state agencies remain stagnant.

Second, during periods of economic downturn, revenues for education expenditures rapidly disappear, while funds for state agencies remain stagnant. The rapid disappearance of revenues for education is exactly why the legislature implemented the Rolling Reserve Act. This legislation creates a reserve fund that protects against the dramatic loss of revenue during economic downturns.

The General Fund remains stagnant, regardless of the state of the economy, and thus is always gasping for more revenue if their expenses increase.

Last week, the Senate’s Finance & Taxation Education Fund Committee considered a bill, SB12, introduced by Senator Paul Sanford (R-Huntsville). This legislation would put all revenues attributed to the Education Fund and the General Fund into a newly created “Recurring Revenue Fund” and then would re-distribute 78% for education appropriations and 22% for state agency appropriations.

The legislation would allow the General Fund to grow as it would allow it to obtain a percentage of the growth taxes.

The bill was not favorably received as it died on an 8-5 vote on a motion to indefinitely postpone the bill, forwarded by Senator Gerald Dial and seconded by Senator Quinton Ross.

During committee discussion, two things were apparent.

First, a majority on the committee would prefer raising taxes or finding other sources of revenues to support the General Fund rather than take away any “growth” revenues for education. In fact, one member, Senator Vivian Figures, advocated expanding Medicaid as a way to properly fund the General Fund. Huh?

Second, there appears to be no desire on behalf of the majority of this legislature to address systemic issues affecting the way the state allocates its resources.

So what’s the next step?

As set forth above, the FY15 General Fund appropriations bill allocated $1.85 billion for all non-education state agencies.

This past week, the House Ways & Means General Fund committee passed a FY16 General Fund appropriations bill of $1.65 billion, $200 million less than last year. This bill is scheduled for consideration this Tuesday before the full House of Representatives.

Many legislators are concerned that this reduction in spending will result in catastrophic consequences and that the public will react in a negative manner. So they are still considering tax increases. Many tax increase proposals are pending in the House (see Governor’s $451 million package and the House’s $150 million package) and yet others are being discussed (taxes on soft drinks, etc.).

So it will be interesting to watch this week to see what action the Legislature takes on moving the appropriations bills. The Education Fund bill has passed the Senate and is scheduled for consideration in the House Ways & Means Education Committee on Tuesday. It is expected to pass with no material changes from the Senate version. It may come to the full House as early as this Thursday.

Because the Senate has made it fairly clear that they are not inclined to increase taxes, the General Fund bill is expected to be passed by the House and taken up in committee in the Senate this week with little change anticipated from the bill passed out of committee. The Governor has said that he will veto the bill in its current form.

Stay tuned….

Survey Indicates Attorney General Strange Looks Good Despite $1.8 Million Attack by Gambling Interests

gambling

It appears that the gambling interests in the state have put all their chips on black….and got red.

A recent survey conducted on October 27-28th by OnMessage Inc. produced some good news today for the Luther Strange camp.  Based on 600 likely voters, Strange enjoys a sizable 20 point lead over his opponent, Democrat Joe Hubbard.

Incredibly, after spending nearly $2 million provided by the gambling industry, Hubbard has not been able to either bring down Luther’s favorable rating nor improve his own. Not sure how this is possible, but 31% of those surveyed had no opinion of Hubbard and 21% had not even heard of him.

See complete memo on survey results here.

Wow…what a waste of money.  But we could have told him that from the beginning.

Hubbard has raised $2.18 million for his campaign.  $1.83 million came from gaming interests, $50,000 from AEA and over $50,000 from unions.  Another $85,000 came from his House campaign fund and loans.

Regardless of this positive news, we still need to get the word out to get folks to show up and vote on next Tuesday.

No other public official has done more to assist timberland owners in Alabama than Luther Strange.  He deserves our support and we need him as Attorney General for another four years.

Please forward this post to everyone on your email list.  Let’s see what we can do to impact turnout!  Elections have consequences!

U.S. Supreme Court Rules in Favor of the State of Alabama in Lynch Case

ussupremecourt

In a great victory today for property owners in Alabama, the United States Supreme Court has issued an order denying certiorari in Case number 13-1232, Lynch, India, et al. v. the State of Alabama.

 

Attorney Gluthereneral Luther Strange’s office represented the State successfully in a case that began its journey through the court system in March of 2008. Filed in the Federal District Court in Huntsville, the plaintiffs were seeking to show that Alabama property tax revenues fail to adequately fund K-12 public schools and that this shortfall unconstitutionally shortchanges black public school students.

Success by the plaintiffs would have resulted in application of existing state and local tax millage rates to the full fair market value of all property. This would mean that timberland and farmland owners would see an increase in property taxes by at least a factor of ten, unless millage rates were reduced by subsequent local or state legislative action.

The case was brought under the equal protection clause of the 14th Amendment and Title VI of the Civil Rights Act of 1964. Section 2000d of the Civil Rights Act provides that no person can be denied, on the basis of race, color or national origin, the benefits of a state program that receives public financial assistance. Generally speaking, in cases brought under the Civil Rights Act, proof of discriminatory intent is not required, simply proof that there is a disparate impact on minorities.

The trial was held in March 2011 and on October 21, 2011, Judge Lynwood Smith issued an 854 page opinion finding in favor of the State. The plaintiffs immediately appealed to the United States Court of Appeals for the Eleventh Circuit and oral arguments were held in December 2012. The Eleventh Circuit also ruled in favor of the State and in April 2014, the plaintiffs once again appealed, this time to the United States Supreme Court.

The denial of the Supreme Court to take up the case means that the case is finally over.

Meanwhile, Attorney General Strange is facing stiff opposition in his bid for re-election for another four year term. He and his office did a tremendous job in representing the State of Alabama and landowners. Take a moment to reflect on the consequences to timberland ownership and the forest products industry had an adverse ruling come in this case.

It hasn’t been long ago that the political environment within the Office of Attorney General would have been such that we wouldn’t have had such an advocate for us. We need to keep Luther Strange as Attorney General.

Please consider supporting Luther’s campaign. He needs your financial support and your vote. Elections have consequences! Contact AFA to learn more about how to assist in this election.