By Mary Scott Hunter
Special Interests in Alabama are urging their employees to vote “Yes” for an amendment to the Alabama Constitution this September 18, 2012. A “yes” vote will draw down the Alabama Trust Fund (an investment fund of proceeds from state oil and gas leases) by $435 million over three years. The measure is proposed in order to cover a large shortfall in the state’s general fund obligations. Those in favor point to the dire consequences for Medicaid, our penal system, and other general fund obligations and they cite the need to use the corpus of the trust fund to buy time to reform government and for the economy and tax receipts to improve.
Those opposed cite the Alabama Trust Fund’s original intentions and origins. I spoke with former State Senator and Congressman Sonny Callahan of Mobile and former Congressman and Conservation Commissioner Jim Martin of Gadsden about those origins. They were integrally involved in the original setup of the Alabama Trust Fund. Congressmen Callahan and Martin both explained to me that the fund was set up to yield interest in perpetuity for the benefit of the General Fund and Forever Wild which receives a portion of the interest. If the Constitutional Amendment passes, the fund will lose a significant portion of its principal and difficult but necessary budget decisions will be forestalled until after the 2014 elections. The bill for Medicaid and other general fund items will still come due in 2015, and we will be less able to cover our losses having drawn down the corpus of our investment. If we do this, we have to hope that our reform efforts that are underway work and that the economy is better and that inflation does not catch up to us. What if reform takes longer than three years? What if the economy is not better? What about inflation expanding our obligations as it inevitably does?
I am a “no” vote.
As our ‘National Debt’ and the ‘Economy’ is THE discussion in national politics, so should the focus be in Alabama. With my experience serving on the State Board of Education I am convinced that we are on the right track in many areas. We are poised to surge in Education. I commend Governor Bentley’s appointment of Greg Canfield first to ADECA then as Secretary of Commerce. Under his leadership, “Accelerate Alabama” has been born which marries the efforts of Education and Business. Because we have one State Board of Education with oversight of all Education from Kindergarten through Community College we are able to very effectively respond to the needs of Business and Work Force Development in Alabama.
In the future, our prosperity will totally depend on how well we use our limited resources, and I certainly understand this as a member of the State Board of Education. I also understand that this vote is a close call, and I do not question the members of my party who have decided to support the plan. I, however, cannot find enough positives in the plan to overcome my concerns that this plan is a provisional not a permanent solution. This initiative will, I predict, pass if the voter turnout is low. Low voter turnout will mean organized special interests will turn out their voters and will sway the vote.
When will we live within our means in Alabama if not now? I recognize that there will be a lessening of services, but we have options that have not been properly explored – Medicaid Reform, Sentencing Reform, Cigarette Tax, Gaming Compacts with our Indian Casinos all come to mind. I respectfully disagree with my colleagues in state government who believe that borrowing from our state’s oil and gas trust fund is the best option. The Alabama Trust fund is an interest-bearing investment fund, not a rainy-day or a savings account to be drawn down even in the tough times. Some may think of it that way, but if that were correct, we would not need a Constitutional Amendment to write the check.
Should the measure pass, I commend the Governor’s intent to use the Oil Spill Settlement funds (Restore Act) to repay the Alabama Trust Fund. I urge our Legislature to pass a pay-back provision and commend those who have committed to do this already. I caution the Legislature not to be tempted to enter into the practice of “Diversion.” Diversion refers to diverting proper General Fund obligations to the lean but relatively healthy Education Trust Fund.
Let’s work together to solve the problems in our General Fund and the agencies it supports. Let’s find a solution that may be painful but realistic in the short term but preserves the Alabama Trust Fund for the future benefit of all Alabamians.
Mary Scott Hunter is a Republican serving on the Alabama Board of Education, District 8 including Limestone, Madison , Jackson , DeKalb and Etowah Counties.