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General Fund Budget in a Morass

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

Wednesday, June 3: Again, no one in the legislature could come together on a plan on what to do about the State General Fund (SGF) before this session began, and with this session rapidly coming to an end, no resolution appears in sight. An angrily divided Senate adjourned after lunch without addressing the budget or much else.  No General Fund Budget was passed and it is quite possible, at this point, that no General Fund Budget will pass this session. 

After the Senate went home with no action on the budget, Representative John Rogers (D-Birmingham) said on the floor of the House, “We have tried to be nice with the Senate. We have played games with the Senate…..You can’t play games with thugs.” What are we going to do?

Speaker of the House Mike Hubbard (R-Auburn) said, “We have our priorities that are important to us. We are going to stay here and pass those.”

House Minority Leader Representative Craig Ford (D-Gadsden) said, “We are not addressing the hole in the General Fund.”  Ford said, “I wish we would lead and come with a plan in a special session” and, “There will be a special session now because the Senate has refused to work…I think a lottery plan will pass.” Ford said that the House should have passed a tobacco tax, but the Senate bullied us.”

On Wednesday morning (before the Senate quit), Alabama Governor Robert Bentley (R) was in the Senate talking to individual Senators about ways to bring more revenues to the troubled SGF.

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Sen. Harri Anne Smith (I-Slocumb) said, “Started early today……I am glad to see the Governor and The Senate General Fund Budget Committee Chairman in The Senate Chamber talking. We need the Leadership to come to an agreement on a solution to our budget problems. Thank you Gov Bentley for coming over and trying to help craft a solution.”

After the meeting with Senate Finance and Taxation General Fund Chairman Arthur Orr (R-Decatur) Gov. Bentley took to the radio airwaves. The Governor told 870 a.m. listeners that he was a conservative Republican and called Senators who opposed raising revenues for the State’s troubled SGF, “Libertarians.” 

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The Governor blamed the Senate. He said, “The House has come around to the need for more revenues for the SGF; but certain Senators have balked at raising revenues for the SGF and they are the ones holding up passing a workable budget.”

Sen. Cam Ward (R-Alabaster) said, “I am very disappointed in the direction we are taking as a legislature on adopting a General Fund Budget. We have so many necessary constitutional obligations that I believe we are ignoring. A special session is a disservice to the people we represent.”

Alabama Governor Robert Bentley (R) has been promoting a $541 million in new taxes to fund the largest General Fund budget in State history. That plan never had any public support in the State Legislature and died from lack of action in committee this week.

The House Democrat Caucus proposed a plan removing the Federal tax deduction, dropping the Sales tax on groceries, negotiating a compact with the Poarch Creek band of Indians to allow class three gaming at three casinos, raising the cigarette tax, allowing casinos at four dog tracks, and passing a state lottery with proceeds going to the General Fund.  That plan also never made it out of committee. 

Senate President Del Marsh (R-Anniston) proposed a plan allowing casinos, the Indian Compact, and the lottery with no tax increases.  Sen. Marsh’s bill narrowly received a favorable report by a Senate Committee. Anti-gambling Republican State Senators vowed to filibuster the unpopular plan so it never make it to the Senate floor.

Speaker of the House Mike Hubbard’s (R-Auburn) presented a plan to give PCI a monopoly on gaming and pass $150 million in new taxes on car sales, cigarettes, lube oil, car leases, business privileges, etc. passed out of committee. It never came to the floor of the House because it lacked the votes.

Senate Finance and Taxation General Fund Chairman Arthur Orr (R-Decatur) brought a plan, SB496, out of committee moving $80 million in sales tax revenue from the Education Trust Fund to the General Fund. The Senate went home on Thursday, May 28, without addressing that due to lack of support.  Governor Bentley said that he opposes Orr’s bill because it does not move enough growth income to the General Fund. 

A number of Senators have objected to raiding the ETF for Medicaid and Corrections. Some Senators are reluctant to do anything that might take the pressure off of the legislature, as they look for solutions in a future special session. 

Several legislators have said that the State should not raise taxes or legalize gambling. Sen. Phil Williams (R-Rainbow City) introduced a plan late last week to address this crisis without raising either taxes, or doing a deal with gambling syndicates.

A special session is certain. What will be done then, is far from certain.

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