By Steve Flowers
You would have to have been under a rock for the past six months to not have heard that the State General Fund has a shortfall, and Gov. Robert Bentley has proposed a $540 million tax increase solution to resolve the problem.
This crisis has been formulating for close to a decade now. It is under Dr. Bentley’s watch that the train wreck has finally occurred and the chickens have come home to roost. During Bob Riley’s eight year ride, money was shuffled around and a lot of federal stimulus money fell on the state like manna from Heaven. Therefore, Riley got to spend his last two years in office playing cops and robbers. He rounded up all the troopers and rode around the state closing down constitutionally sanctioned and tax paying gaming casinos with the zeal of a child pretending to chase Al Capone.
Riley’s charades were gleefully welcomed by his friends in the Indian gambling establishments who pay no taxes. While Riley obsessed over granting a monopoly to the Indian casinos, the state financial picture worsened. A national recession settled in and all state governments fell on hard times.
Alabama’s problems are further exacerbated by the fact that we are only one of a handful of states that work out of two budgets. The Education Budget receives all of the growth taxes, such as income and sales tax. Therefore, the poor General Fund has to live on the same revenue today as it was 30 to 40 years ago. Unfortunately, the cost of things increase over the course of four decades. Automobiles, gasoline, desks, paper, pencils and especially health insurance have all gone up exponentially in cost.
Anybody could predict that eventually the beleaguered General Fund was going to have a rude awakening. During the 2010 Governor’s race, I continuously told you that whoever won the governor’s office was going to be a one-term governor simply because they were going to inherit a sinking financial ship of state and would be forced to raise new revenue.
Dr. Bentley took over this ship. It was like walking onto the deck of the Titanic. Riley left the cupboard bare and the federal stimulus money was gone. Somehow Bentley and the super majority legislature maneuvered through four years of financial Armageddon. They cut state services, the number of state employees and the salaries of those who were left. They were both overwhelmingly reelected.
Today, the first regular session of the quadrennium is heading toward its adjournment and no resolution is in sight. The governor and legislature are at a standoff. The super majority legislature is made up of some very conservative folks. It is probably the most conservative legislative body in the nation, both socially and fiscally. However, they are probably reflective of the constituents who sent them to Montgomery. Our electorate is very conservative.
These legislators are more interested in posturing against federal issues like abortion, immigration, gun rights, gay rights and Obama Care, than addressing the state’s budget. Therefore, they are sticking to their no new tax mantra and pledge and have buried their heads in the sand like ostriches. They are more interested in pleasing Grover Norquist than Dr. Bentley.
The problem with this approach is that whether they like it or not, the federal government always prevails over state government. The feds already sent them a message on the aforementioned social issues. If the crisis in Alabama’s prison population is not resolved this year, the federal government will probably take over our prison system. If they do take over our prisons, the picture will not be pretty.
The Medicaid problem needs a long term solution. It is a money eating monster that is now taking up one third of the General Fund. The Chairmen of the General Fund Budget Committees, Rep. Steve Clouse (R-Ozark) and Sen. Arthur Orr (R-Decatur), have done excellent jobs trying to craft budgets. Their yeomen efforts may be to no avail during this regular session.
It looks more and more every day like a special session may be on the horizon to resolve the budget dilemma. The fiscal year begins October 1. In a special session called by the governor, the legislature must focus on what the governor has put in the call. It may be a long hot summer in Montgomery.
See you next week.