By Brandon Moseley
Alabama Political Reporter
Tuesday, May 26, Senate Finance and Taxation Committee Chairman Arthur Orr (R-Decatur) told members of the capital press corps, including the Alabama Political Reporter that the Senate Finance and Taxation Committee would take up the General Fund budget, House Bill 135, at their regularly scheduled meeting on Wednesday at 9:30 a.m.
A lengthy public hearing will be held where the various state agencies will likely parade before the committee complaining about their 2016 appropriation. Chairman Orr said that the Senate will introduce a substitute budget. The new budget will still have the same $1.62 billion total that the House budget had.
On Monday, May 25 the Senate Finance and Taxation Committee met in a special 1:00 pm called meeting. There a series of revenue increases were introduced and given favorable reports without any public hearings, which could have slowed the process. The over $110 million package of bills will be rushed through the process by the Senate and House leadership.
Sen. Orr said that there are only five legislative days left in the 2015 legislative session. The legislature will meet on Thursday, May 28; Tuesday, June 2; Wednesday, June 3; Thursday, June 4; and finally on Thursday, June 11.
Orr said that the Senate will move the budget along in the process while they await the fate of their revenue package in the Alabama House. Once that is known a new bigger approximately $1.73 billion General Fund budget can be substituted on the Senate floor. Both Houses will then concur on a General Fund budget and it can be sent to the Governor no later than Thursday, June 4. The legislature will then wrap up any loose ends when it returns on the eleventh.
In addition to the revenue bills, the Senate Finance and Taxation General Fund Committee also gave a favorable report to a constitutional amendment which would end all budget earmarks and combine the Education Trust Fund and General Fund Budgets. That would have to be ratified by a vote of the people in 2014. The controversial plan was introduced by Senator Gerald Dial (R-Lineville). Dial said that over the years, he and his colleagues including Senators Waggoner and Holley have used the earmarks and the two budgets to protect funds by limiting what the legislature could do. Sen. Dial said that now some are blaming them for causing these problems so he was sponsoring the legislation to give the legislature the freedom to do whatever they wanted to do with future revenues.
Senator Cam Ward (R-Alabaster) strongly objected to the plan. Ward said, “If we merge the two budgets right now: Medicaid, prisons, and mental health will chew through k-12. If we merge those two budgets together we will wind up with a government that caters to Medicaid, Prisons, and mental health.” Ward said that he favored combining the two budgets, but not until the legislature reforms how it deals with corrections, with Medicaid, and with mental health. Without those reforms education will suffer and state government will cater to those three programs. The controversial package passed on a 9 to 4 vote.
Senator Orr said that the Education budget that has just passed the legislature is the second largest ever in the history of the State and has a surplus of over $two hundred million.
Despite the claims that the General Fund budget is in crisis, at a special meeting of the Governmental Affairs Committee Sen. Jimmy Holley (R) introduced a measure authorizing the administration to write up to $50 million in new bonds for a massive resort to be built at Gulf State Park. For years the Gulf State Park Lodge was the crown jewel of the State Park system. It made far more money than any other state park, while allowing Alabama families to enjoy the Gulf at an extremely affordable rate. It was destroyed a decade ago by a hurricane. Rather than simply taking the insurance money and rebuilding what we had, Governor Bob Riley (R) Administration wanted to build a grandiose resort for people with bigger budgets. That project got delayed by a lengthy court battle and then the Great Recession. The state has since allocated $80 million of our BP oil spill recovery money to build the monstrous resort which will cater to the higher income tourists. Sen. Holley said that the insurance and the $80 million check from BP are not enough to build what the Bentley Administration wants to build thus they need to be able to write up to $50 million in new bonds. The bonds would be paid back by revenues from the resort. If that is not enough the bill authorizes that the bonds be paid back by two small taxes that are currently earmarked for the upkeep of the state parks. No mention was made of how the bonds get paid back if the palace by the beach gets washed away in a future hurricane.
SB497 which would increase the number of businesses who have to pay in state taxes for doing business in Alabama received a favorable report from the Senate Finance Taxation General Fund Committee. As explained in the committee meeting, if a business is located in another state but has as much as a salesman living and operating in Alabama that business would become subject to Alabama corporate income taxes.
SB216, sponsored by Senator Dial, would allow state agencies to raise fees at will at the rate of inflation. Dial said that presently state agencies who think they need more money have to come to the legislature and ask their legislators to sponsor a bill that would have to go through both Houses of the Alabama legislature. This would free agency heads from going through that process. This bill is projected to raise over $50 million in revenue for the 2016 fiscal year.
Sen. Bill Holtzclaw (R-Madison) strongly objected to the bill. Sen. Holtzclaw wrote afterwards on his blog, “SB216, allowing state agencies to raise fees on the public has some built in backstops preventing a state agency from running away with fee increases however I maintain that we supplant the representative function of the legislature when we allow agencies to raise fees without or even with limited oversight from those elected by the people to represent the people.”
The committee also passed a bill allowing the state to charge sales taxes to people from other states who buy vehicles in Alabama. The committee alleged that Florida has been doing the same to Alabama. Already in the pipeline is legislation stripping individuals of their ability to opt out of payroll withholdings.