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.

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