Proposed Bill Will Delay Payback to Alabama Trust Fund

trustYou may recall, in 2012, the legislature, facing a revenue shortfall in the general fund, passed a constitutional amendment that the voters ratified allowing a “raid” of the Alabama Trust Fund to the tune of $145 million a year for three years, or $435 million in total.

 

You might also recall that there was not a repayment provision for the money taken from the Trust Fund.

AFA was opposed to the idea of taking money from the Trust Fund. Our position was that the state’s leaders should be focusing on addressing the systemic issues in state governance, not taking the easy way out.

AFA also believed that the money should be paid back.

Our primary legislative initiative in 2013 was legislation that provided a “payback” of the Trust Fund. Sponsored by then Senator Bryan Taylor, the legislation was the first bill passed in the legislative session and required repayment over a 12 year period. The first payment of $5 million was paid in the FY14 fiscal year (which ended 9/30/14). The second payment of $15 million is due this fiscal year. The legislature is now working on the FY16 budget and the law requires a payment of $30 million.

We were concerned at the time that the “payback” legislation was a statute and not a constitutional amendment. In other words, future legislatures could change the law as priorities changed (and they thought the voters might forget).

It appears that we were correct.

Yesterday, HB490 was introduced by Representative Steve Clouse. HB490 eliminates the payment requirement for the FY16 budget year and extends the repayment plan through the year 2027.

Clouse, powerful Chairman of the House Ways & Means General Fund Budget Committee, obviously feels that there are more pressing needs for the $30 million than paying back the Trust Fund. HB490 has been assigned to his committee.

AFA opposes HB490.

 

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