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.”

Leave a Reply

Your email address will not be published. Required fields are marked *