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Opinion

State should not waste $2.3 Billion BP settlement

By Jim Zeigler
Alabama State Auditor

Alabama now expects to receive about $2.3 billion in a settlement of claims from the BP Deepwater Horizon oil disaster of 2010. Now my questions start: How will Alabama use the money? Will it be spent on new pet projects? Will it be used to bail out the state’s ailing general fund, now and in the next few years of projected shortfalls? Will it be used to kick the can down the road (again), avoiding complete fiscal responsibility for a few more years? Will this windfall be wisely stewarded or squandered? Eighteen years from now when the BP money stops, will there be anything to show for it?

I ask you, as a citizen and taxpayer, to weigh in with me on the side of TYING THE MONEY UP. Not letting the politicians get hold of it. Preserving it for our future.

This was the approach, led by Gov. Fob James, when the oil and gas lease windfalls were received starting in 1982. The Alabama Heritage Trust Fund later turned the money over to the Alabama Trust Fund. The bulk of the money remains. Benefits to our state and people came from a bond issue financed by the trust and from interest earned. Unfortunately, politicians have raided some of the trust to finance immediate budgetary needs.

The easiest stewardship strategy for the BP money is to simply deposit it into the Alabama Trust Fund. Again, it can benefit our state forever by interest earned and on a shorter term by financing a bond issue. The devil is in the details. Raids of the trust corpus should not be allowed. A separate trust fund could be considered specific to the BP funds.

The BP settlement is an opportunity for either immediate spending or long-term stewardship.

I will update this scenario as it develops.

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