By Danny Garrett
Happy New Year. By the time you read this article, the State Legislature will have held its organizational session Jan. 13-14. When my fellow lawmakers and I gather in Montgomery for the 2015 regular legislative session that convenes in March, we will be greeted by one of the most severe budget shortfalls in the history of the state. And because the Alabama Constitution requires each year’s budget to be balanced, we will have to find a way to fill the deficit without violating the conservative policy principles and no-new-taxes beliefs that many of us in the Republican Party hold dear.
During the decades that Democrats controlled Montgomery, Alabama’s general fund budget, which funds all non-education state agencies, was held together with bailing wire, duct tape and prayers. Unfortunately, the day of reckoning is now here — all the financial tricks and fiscal shell games have been exhausted.
As a businessman with a background in finance, I look forward to solving the challenge with a healthy dose of fiscal discipline and by making some hard choices.
Throughout the recent election, budget analysts and members of the media estimated that the shortfall in the general fund spending plan that we will draft next year would range between $230 and $250 million. Gov. Robert Bentley, however, recently said that new funding demands by state agencies have grown the shortfall to at least $265 million and perhaps higher.
Even worse, it’s estimated that the budget could face a long-term deficit of about $700 million as a result of stagnant general fund revenues, years of failing to confront serious problems within state agencies, and a decades-long practice of taking money from one state pot in order to help fill another.
Among the immediate increases demanding funding:
Medicaid is expected to need an additional $100 million to $115 million just to keep current services at their current levels. In addition, the Medicaid expansion that some special interest groups are pushing would exponentially grow that need in the long term as well.
The Department of Corrections, which is under threat of a federal court order mandating facility improvements, will need an additional $40 million.
The state must repay $160 million that was borrowed from the Rainy Day Fund.
As the result of a miscalculation, the state must repay $72 million to the federal government for Medicaid overpayments dating back to 2007 and another $53 million for overpayments to another program.
In addition, the state must reimburse $63 million in gasoline taxes that was diverted from highway maintenance to other general fund needs. Another $187 million that was taken from the Education Trust Fund in order to buoy general fund programs should be returned, as well, according to a briefing that Bentley provided to reporters after his re-election.
The governor said he’s working with the legislative leadership to find funding sources for both the short-term and long-term deficits that loom, and added that new taxes would be a last resort.
Among the proposed fiscal “fixes” that have been discussed in other newspaper reports – many of which are opposed by the majority of Alabamians — are the un-earmarking of currently earmarked dollars unrelated to education, a state lottery, and a possible gaming compact that would allow Indian casinos in Alabama to expand the forms of gambling they offer in return for their agreement to pay state taxes on the proceeds.
None of the problems before us offers easy remedies, and none of the solutions are especially palatable, especially to conservatives like me who abhor taxes and believe in small, lean and efficient government.
In my opinion, we must continue to secure savings by attacking waste, fraud and abuse in state government and stopping it wherever it exists. We must also look at every program in every agency and ensure that taxpayers are getting a healthy return in services for the dollars they invest.
And then we must do what every family is forced to do at the kitchen table each month — take out a pad, pencil, and calculator and figure out how Alabama can best live within its means with the dollars it has.
Danny Garrett represents District 44 in the Alabama House of Representatives, which includes Trussville, Clay and portions of Pinson. He can be reached by phone at 205-410-4637 or by email at dannygarrett44@gmail.com. You may also follow his Facebook page, “Representative Danny Garrett.”