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Budget Basics: Understanding Alabama’s Budget System

Katherine Green Robertson

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By Katherine Green Robertson

This is Part 2 of API’s 3-part “Budget Basics” series: exploring Alabama’s budget system, the current fiscal climate and related challenges, and the implications for taxpayers.

The Alabama state budget process begins with the Alabama Department of Finance’s Executive State Budget Office (EBO), as required by Alabama law. The EBO puts together the Governor’s Executive Budget and presents it to the Legislature. The Legislature reviews the Governor’s budget and drafts its own, with assistance from the Legislative Fiscal Office (LFO). The two appropriations bills then go through the typical legislative process, starting with consideration by the relevant committees: the Senate Committee on Finance and Taxation- ETF, the Senate Committee on Finance and Taxation-GF, the House Ways and Means Education Committee, and the House Ways and Means General Fund Committee.

The Governor’s proposed FY2015 General Fund budget was not substantially altered as it made its way through the legislative process. The Governor recommended $1.82 billion and a $1.83 billion budget was enacted. On the other hand, the Senate reduced by $75 million the Governor’s $5.99 billion proposal for the ETF, while the House version decreased the appropriation by around $60 million (which was adopted). The main source of disagreement was the Governor’s inclusion of a 2% pay raise for K-12 educators at a cost of $68 million and a $72 million increase for education employee insurance. If both of these items had been adopted, the ETF’s statutory spending cap would have been exceeded by $92 million. The Legislature opted to focus resources on the education health insurance without providing for a pay raise, and exceeded the cap by a much smaller margin.  On April 11, 2014, the Governor signed the FY15 budget, allocating $1.8 billion to the General Fund (up 5.1% from last year) and $5.9 billion to the Education Trust Fund (up 2.9% from last year).

As previously mentioned, the Alabama Constitution requires a balanced budget. Proration is declared when revenues from income, sales and other taxes fall short of estimates and across-the-board cuts are implemented, or prorated.  Since 1980, the State has declared proration 11 times for the Education Trust Fund and eight times for the General Fund. In the last decade alone, the ETF went into proration six times and the GF three times. Notably, since the Republicans took power, the ETF has not gone into proration, because the 2011 adoption of the Education Rolling Reserve Act (ERRA) caps the appropriation limit. Proration was declared for the General Fund in 2012. Poor stock market conditions and tornado recovery funds were cited as contributing factors.

In some fiscal years, to avoid proration or to reduce its impact, money has been borrowed from the State rainy day accounts.  The rainy day accounts, one for the ETF and one for the GF, are part of the Alabama Trust Fund. The Alabama Trust Fund was established in 1985 and is funded by the State’s oil and gas revenues. In 2008, the ETF and GF Rainy Day Accounts were set up within the Trust fund.

There are constitutional limits on how much money can be withdrawn in a particular fiscal year.  Most recently, in 2009, the maximum withdrawal–$437 million–was made from the Education Rainy Day Account. The ETF must fully repay the remaining balance of $162 million by July 2015. In FY2010, $161 million was withdrawn from the General Fund Rainy Day Account. At present, there is no set schedule for repayment but it must be repaid by 2020.  In September 2012, voters approved a constitutional amendment to withdraw $437 million from the Alabama Trust Fund over the course of three years to make up for General Fund shortages. When the Legislature reconvened in 2013, a bill sponsored by Sen. Taylor (R-Prattville) and former Rep. Love (R-Montgomery) was passed to require an automatic payback of this withdrawal by 2026.

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The Alabama economy continues to experience stagnant economic growth. Simply put, it has become more and more difficult to maintain level funding, much less increased funding, for all of the obligations of state government. Republican-led efforts in the last quadrennium to pass legislation limiting ETF spending according to past growth, consolidating agencies or offices, streamlining a variety of operations, and ensuring the repayment of debts owed to the various savings funds are a solid step in the right direction.

As it currently stands, more ‘tightening of the belt’ will be required. Providing for more flexibility in the allocation of resources will be another necessary consideration.

Katherine Robertson is vice president at the Alabama Policy Institute (API). 

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Opinion | We can’t let up in the fight against gun-grabbers

Bradley Byrne

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The Second Amendment is under attack like never before in our nation’s history, but I am leading the fight to preserve your constitutional rights.

Last year, just weeks after taking power, House Democrats passed a bill to limit the constitutional right to own guns.  Their misguided legislation would do nothing to address the underlying problem behind actions of mass violence.  That bill, HR8, would prevent lawful gun owners from selling their guns to other law-abiding Americans.  If that bill became law, anytime a gun owner like me wanted to transfer or sell a gun, he or she would have to go through a government-sanctioned middle-man.  Of course, this process would be prohibitively time consuming and expensive.  The authors of this bill’s true intent not only was to freeze all gun transactions through the power of a slow and inefficient federal bureaucracy but to subject millions of Americans to federal prosecution.  Even transferring a firearm to a family member or friend could require federal permission!

Let’s not kid ourselves.  Criminals are not going to put their illegal enterprises on pause while waiting for permission to buy or sell a gun.  HR8 does nothing to stop crime and only burdens lawful citizens.  And it does nothing to address the mental health crisis behind so much of the mass violence we have seen.  During the debate on that bill, I introduced an amendment to strip out this anti-gun legislation and replace it with nationwide concealed carry reciprocity.  My amendment actually could make our country safer.  Unsurprisingly, Speaker Pelosi blocked my amendment.

Fortunately for gun owners, we have a true friend in the White House.  President Trump has been the biggest advocate for the Second Amendment ever to sit in the Oval Office.  To appreciate the significance of that, contrast his Second Amendment policies with those of his opponent in the 2016 election, Hillary Clinton.

In 2008 in District of Columbia v. Heller, in a major victory against zealous gun-grabbing liberals, the Supreme Court ruled against a District of Columbia law criminalizing handgun ownership.  That law made it illegal to possess an unregistered firearm in the city but also effectively prohibited registration itself, a blatant attempt to block constitutional rights to own a gun.  Clinton, however, disagreed with the Supreme Court’s ruling!  Can you imagine if we had a president in the White House who thought it should be illegal to own a gun?  Unfortunately, her beliefs are now standard for Democrat politicians.

The battle to preserve the second amendment continues in the courts.  Last year, I wrote an amicus brief, often called a “friend of the court” brief, to the Supreme Court.  The Court is working on a case, N.Y. State Rifle & Pistol Association Inc. v. City of New York, to determine if New York’s ban on transporting a handgun to a home or shooting range outside city limits is constitutional.  Like the District of Columbia law found unconstitutional in Heller, this law is a backdoor attempt to weaken your Second Amendment rights.  I was proud to have 120 lawmakers sign onto my brief as well as the support of the NRA and Gun Owners of America.

Last week, I signed on as an original cosponsor to an important bill to strengthen and protect gun rights.  The Lawful Interstate Transportation of Firearms Act would ban states from prosecuting lawful gun owners simply traveling through their state.  This commonsense legislation would protect against liberal states’ sneaky schemes to circumvent the Second Amendment.  I’ll continue fighting for this bill with my colleagues, including Mo Brooks of Alabama who introduced the bill.

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The gun-grabbers aren’t letting up, so we can’t stop fighting either. Rest assured I will keep leading the fight in Washington to protect your Second Amendment rights.

 

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Opinion | It’s time for prison mental health reform

Dana Hall McCain

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Two of the major items on Governor Kay Ivey’s 2020 agenda are finding solutions to the problem of Alabama’s overcrowded and broken prison system, and bolstering our mental healthcare system.

Both are badly needed, and in some ways intersect.

I understand the political challenge of getting folks excited about funding a major overhaul of something as unpalatable as prisons. It’s far easier to rally support for education, health care, infrastructure—heck, basically anything besides creating better conditions for those judged to have done wrong.

But the success of our effort to rehabilitate offenders and return them to society in better shape than the judicial system found them does have real consequences for the rest of us. Overcrowded prisons are a breeding ground for violence, further dehumanizing and corrupting those who’ve lost their way. Draconian mandatory minimum sentences strip judges of discretion to assign appropriate sentences and add to the overcrowding problem. 

A broken penal system can take people who made mistakes and turn them into hardcore criminals. The skillset prisoners are forced to learn to survive the sea of gangs and drugs behind bars will be the very one that causes them to fail after release, and get on the recidivism merry-go-round for a lifetime.

Few are discovering a better way to live, or learning how to make an honest living and stay out of trouble after parole. 

As it currently exists, our corrections system is an active contributor to the problem of recidivism. The governor can start the ball rolling, but the state Legislature is going to have to get in the game and do the hard work of crafting substantive solutions.

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Harder still, they must find a way to fund those solutions.

The other major task is creating a more comprehensive and responsive mental healthcare network for Alabamians who need these services. Those who suffer from mental health challenges, or who care for a loved one who suffers, will tell you that accessing care in Alabama has gone from difficult to almost impossible since the closure of key inpatient facilities several years ago.

Those lacking good insurance or the means to pay for expensive care out-of-pocket are wholly at the mercy of the state. Sometimes, even good insurance can’t help you out, if a bed to put you in just doesn’t exist.

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The crossroads of these two issues is that a significant number of individuals who find themselves on the wrong side of the law are struggling with a mental health condition. Many who struggle with an addiction to an illegal substance are trying to self-medicate for an undiagnosed or untreated mental health condition. Eventually, that addiction leads to a drug-related arrest and conviction.

Additionally, our lack of mental health resources means that law enforcement officers are often the first responders to a crisis. In the past, this resulted in a significant number of suffering individuals being arrested, when what they really needed was adequate care. 

Alabama House Majority Leader Nathaniel Ledbetter has taken up the cause of mental health reform, including developing more Crisis Intervention Teams to help law enforcement work with health care providers and families to reduce arrests and connect individuals in crisis to appropriate care.

That’s a wonderful, needed start. But again, the state legislature must find a way to expand the system to create beds where these CITs and their families can refer people for treatment. I’ve written before of the despair probate judges feel when families are pleading for help via commitment to a treatment facility, and no matter how legitimate the need, there is often no bed available to place that patient in. If a bed does exist, it’s not available for the length of time needed to achieve real stability for the patient. Our patchwork quilt of longterm and short-term treatment options in Alabama has massive holes in it, and it must be addressed.

These intersecting problems—prison reform and mental health reform—are real and impact us all at the end of the day. Does the Alabama legislature have the will to fix them? We should hope so.

Dana Hall McCain, a widely published writer on faith, culture, and politics, is Resident Fellow of the Alabama Policy Institute, a non-partisan, non-profit research and educational organization based in Birmingham; learn more at alabamapolicy.org

 

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Opinion | Every school should have a mental health counselor

Craig Ford

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In her State of the State Address, Gov. Ivey said that mental health would be a priority for both education and our prison system. Then she set a goal of having a mental health counselor in every school system.

While I applaud the governor for recognizing the challenges our schools are facing when it comes to students’ mental health, the reality is we need a mental health counselor in every school, not just one for each school system.

Our schools are staffed by excellent school nurses and guidance counselors who do an outstanding job trying to help these students with mental health needs. But mental health care is not their responsibility, nor is it what they are trained for.

And the mental health needs in our schools are much more prominent than you might think. It isn’t just dealing with kids who have ADHD or a learning disability. There are kids dealing with problems at home, like parents who are going through a divorce or even parents who have a drug addiction.

There’s a lot that happens in a child’s life between when they get picked up from school at the end of the day and when they get dropped off at school again the next day. And while our teachers, school nurses and guidance counselors do everything they can for these kids, what these kids really need is a mental health counselor.

Setting a goal of having one counselor in every school system is certainly better than nothing. I guess you could say it is a more easily achievable goal. But our state leaders weren’t elected to do the things that are easy. Our leaders were elected to do the things that are hard.

And the truth is if we don’t invest in our children with these needs today, then for many of them we will be investing in their imprisonment in the future. In fact, that’s how we got into this prison crisis in the first place.

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I have said many times before that we should be building super schools, not super prisons. It is always better to keep a child from ending up in prison in the first place, and if we make the right kinds of investments in education then we won’t need these new super prisons that Gov. Ivey and Gov. Bentley before her have been fighting for.

The main reason we have overcrowding in our prisons is because we never did anything to change the path these people were on before they grew up and became criminals.

Building super prisons instead of super schools is like treating the symptom rather than treating the disease.

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We should be focusing more on getting kids on the right path before it’s too late. As the old saying goes, “an ounce of prevention is worth a pound of cure.”

And the first way we can prevent kids from turning to a life of crime is to recognize and treat their mental health needs while they are still young and have a chance at a normal life.

But only having one counselor to treat an entire school system is simply not enough to do the job right.

Of course, not every kid with mental health needs is on the path to prison. Many, if not most, are simply dealing with difficult or traumatic events at home that take place outside of school hours.

But those events affect what happens the next day in the classroom. These kids tend to have a difficult time concentrating, and often become disobedient and disrespectful. These things, in turn, make it hard for them to be successful in school and, ultimately, in life.

Like so many other issues, we all agree on what the problem is but getting to agreement on the solution is another matter. In this case, though, Gov. Ivey and state lawmakers seem to understand what is needed to fix the problem. They just don’t seem to be aggressive enough in their willingness to address it.

Having a mental health counselor in every school system is a step in the right direction and an improvement over our current situation. But let’s not set the bar so low. Our children deserve better than that. We don’t just need a mental health counselor in every school system; we need one in every single school.

Craig Ford is the owner of Hodges-Ford Insurance and the Gadsden Messenger. He represented Gadsden and Etowah County in the Alabama House of Representatives for 18 years.

 

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Opinion | State Sen. Will Barfoot should be highly commended

Glenn Henry

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State Senator Will Barfoot should be highly commended, for sponsoring Senate Bill 105, in which military families, require school districts, operating magnet schools, to accept enrollment applications, for military children, where families have received transfer orders, to Alabama military installations.

Additionally, Sen. Barfoot (R) Pike Road is sponsoring Senate Bill 106, called the School Choice and Student Opportunity Act, formation of charter schools, on or near military installations, with focus on serving military dependents, authorized. Tenure for certificated teachers temporarily serving in charter schools are preserved.

Lt. Gov. Will Ainsworth, recently correctly stated that his goal is to “make Alabama the most military-friendly state, in the country.”

Over one year ago, former President and Commander of Air University, Lt. Gen. Anthony Cotton, advised the public, that 56 percent of students attending the Air War College, were not bringing their families; due to a poorly performing local school system, that was under intervention, and take over status. Mandatory, federal laws, state that adequate, and sufficient education must be provided, to kids of military families, by the Local Education Agency, which is, the Montgomery Public School System.

Gov. Kay Ivey drafted, an outstanding tentative education initiative package, of ideas, by reaching out to Lt. Gen. Cotton, to ask the families at Maxwell-Gunter Air Force Base, to provide their list of wanted items. The Governor’s directives to her staff, were very clear; provide the families at Maxwell-Gunter Air Force Base, with everything, they put, on their list.

The governor also ensured, former Secretary of Defense James Mattis, and former Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford were notified. Emergency education funding was requested. Additionally, the acting Secretary of the Air Force Matthew Donovan, and the Chief of Staff Air Force Gen. David Goldfein were contacted.

Through Gov. Ivey reaching out to Lt. Gen. Cotton, the education committees were formed; with successful results. Currently, the military children at Maxwell-Gunter, are attending schools out of district, in counties such as Elmore, Autauga, and Pike Road City Schools, regardless if they live on base, or off base. Families living at the family camp; within recreational vehicles, may enroll their kids, in the on-base school. Faculty, professors and instructor kids, may enroll out of district.

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It is critical that SB-105, and SB 106 pass, successfully, through the House and Senate.  Additionally, Gov. Ivey, Lt. Gov Ainsworth and Sen. Barfoot, are exactly right; on their current direction, and their proper and correct road, being travelled, due to the following reasons.

Today, the Montgomery Public School system, is still under intervention, and this education system, is not moving forward. Other military bases in Alabama, are facing similar situations, in which the Local Education Agencies, are not providing, adequate and sufficient education, outside the military base gates.

The on-base Maxwell-Gunter Elementary and Middle School, and its principal Mr. Paul Hernandez, have been deemed, Top-Notch School, and Top Principal, over recent years according to the Department of Defense Education Activity Americas.

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I taught at Maxwell-Gunter, for two years, and I never had to send, one student to the office. The Parent Teacher Association at Maxwell-Gunter, is the best on the planet. I thought the parents were teachers. They are in the schools, from sun up, to sun down, helping to mold, and shape our next generation of airmen, wingmen, astronauts, scientists, doctors and future Air Force Academy cadets.

Many military parents, in private, are very concerned, their kids have the options, and opportunities to attend the very best schools, not the worst schools. Parents do not want their kids in unsafe environments, nor in class rooms, where the students are cursing at the teachers daily.

Over the years our Air Force Secretaries, Colonels and Generals, have spoiled us, by providing, the best of everything. Education is taken very seriously, within our military services. Our Air Force, and our Space Force, can’t remain number one, throughout the world, without the best education, top training, most effective hardware, and fastest software systems.

At this juncture, the only adequate, safe and sufficient schools, that I see in Montgomery, are a few of the magnet schools, private schools, or home schooling. A new Military Magnet school on the military base, or near the base, would be awesome.

I would also highly suggest, that the appropriate standards, of the Military Magnet schools, be set at the same high standards, and the current top cultures, of the Department of Defense Education Activity for K-12. Due to their proven excellence in education, and their top-notch academic advancements. Many students at Maxwell-Gunter, are highly performing, and virtually mastering, robotics in grades, 6 through 8.

Therefore, we should commend, Gov. Ivey, Lt. Gov. Ainsworth, and Sen. Barfoot; and support them in their efforts, in making our state the most military friendly in the nation. Their initiatives, will provide, much needed assistance, not only for Maxwell-Gunter Air Force Base, but for all military installations in Alabama. Our ultimate goal is to attract military families to our Great State, and retain the current military families—not run them away.

This one, we must get right. Other states would Love to have our military families. Our state leaders are making sure, that we do everything, in our power to keep them. We can’t let other states, out work us, nor out hustle us, through their better education and training systems.

Just as a matter of information, in working with Gov. Ivey, in an unofficial capacity over the years. A lot of top Department of Defense officials, and top Air Force and Space Force leaders, along with local Air Force leadership, such as Lt. Gen. Cotton, and  42nd ABW Commander Col. Patrick Carley; have been very gracious, in supporting Maxwell-Gunter families, and our regional communities, to ensure that we continue to have the best education, and training systems.

Our top Department of Defense, civilian and military leaders; and our Secretary of the Air Force Barbara Barrett, Chief of Staff Air Force Gen. David Goldfein, and Chief of Space Operations Gen. Jay Raymond, have always, had our Six, and we have always, had their Six. There is absolutely, no doubt about that!

Glenn Henry is retired from the U.S. Air Force. He has been a high school teacher and university adjunct professor. He has earned numerous IT Cisco certifications. He is a Certified Professional Ethical Hacker. He lives in Montgomery with his wife Teresa.

 

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