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General Fund Budget Options

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

Tuesday, March 31, our sources are reporting that a Republican Alabama general fund budget will be introduced on Wednesday, April 1, that balances the State’s by cutting spending without any revenue increases.

Alabama Governor Robert Bentley (R) has been promoting his own general fund budget that contains $541 million worth of tax increases to pay for a 24 percent increase in the size of the State’s general fund.

Many conservatives across the State are encouraging passage of an alternative that does not raise taxes in the State. Legislators reportedly will unveil the first draft of a budget on Wednesday that does just that.

A public hearing that was to take place on Gov. Bentley’s tax proposals has been cancelled so that the Senate Ways & Means Committee can focus on the more frugal budget proposal, which could slash the budget request for some State agencies by 25 percent or more.

State revenues have failed to keep up with the growth of State government, particularly the State’s increasingly costly Medicaid program which is expected to grow by another $110 million in 2016.

Governor Bentley estimates that the State also needs to spend another $38 million to address chronic problems with the State’s correction system. Alabama is at 192 percent prison capacity and State leaders fear a possible federal takeover of the State prisons. Gov. Bentley also would like to pay back moneys the State owes the federal government and restores moneys transferred from the Transportation Department and Education that the State has been using for general fund needs.

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The frugal no new taxes budget reportedly does not address any of the money which Gov. Bentley claims that the State needs to pay back to the feds. The budget also cuts $261 million from the anticipated growth in the general fund’s needs.

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While the frugal budget cuts non-education related State agencies the Bentley budget raises cigarette taxes, car rental taxes, insurance taxes, utility taxes, and automobile sales taxes. Many of these proposals have been around for a series of years, but most were introduced by Democrats.

Governor Bentley told the Alabama Political Reporter on Tuesday that he is confident that legislators will pass his proposals.  Gov. Bentley said that the General Fund budget has been a problem for years and that it is important to address that issue.

Senate President Pro Tem Del Marsh (R-Anniston) told the Anniston Star’s Tim Lockette that the Senate budget, “Proposal is a serious proposal.” Sen. Del Marsh said, “I think there are some in the Legislature who are of the mindset that we can continue to right-size government rather than raising taxes.”

Sen. Marsh on Thursday told a.m. radio host Matt Murphy that last week’s US Supreme Court decision on redistricting means that some legislators may have the possibility of special elections in the backs of their minds, making it less likely that they will vote for higher taxes. Many of the GOP Senators have signed Grover Norquist’s “No New Taxes” pledge while campaigning. Governor Bentley himself ran on a no new taxes and limited government platform. The Governor claims that his advisers did not tell him how bad the general fund budget was until the day after he was reelected.

The State of Alabama has most of its revenues earmarked for a specific purpose and the State has two budgets: the general fund and the Education Trust Fund (ETF). The ETF appears to be fine this year, but it has more growth dollars earmarked to it than the struggling general fund budget does. Many legislators have criticized the unique two checkbooks system; but there has been no proposal to eliminate the earmarking and combining the two budgets.

House Minority Leader Craig Ford (D from Gadsden) has said he will introduce a lottery proposal to deal with the General Fund shortfall.

The Legislative Fiscal Office estimates that the State of Alabama will have only about $1.59 billion in 2016. Governor Bentley wants to spend over $2.1 billion a year.

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