By Brandon Moseley
Alabama Political Reporter
On Tuesday, September 1, Alabama Governor Robert Bentley announced that a second Special Session to address the General Fund Budget will begin at 5:00 p.m. on Tuesday, September 8.
Governor Bentley said in a statement, “The start of Fiscal Year 2016 is quickly approaching, and there is still no General Fund Budget in place for State agencies to operate. There is still time remaining to pass a budget that does not drastically cut state services which will impact Alabamians. I look forward to working with lawmakers over the next few weeks to bring about real change in the way we fund State government moving forward.”
Governor Bentley announced that he had informed Speaker of the House Mike Hubbard (R-Auburn), and Senate President Pro Tempore Del Marsh (R-Anniston) of the date for the Special Session earlier that day.
Governor Bentley will announce the items to be addressed in the second Special Session later this week. Most insiders believe, that the Governor will again call for hundreds of millions of dollars of tax increases on the people of Alabama. Twice the legislature has rejected Gov. Bentley’s plans to radically increase the taxes on the people of Alabama.
Speaker Hubbard said in a statement, “The Alabama House will continue working with Gov. Bentley, and our Senate colleagues, as we seek common ground solutions for the General Fund budget issues. By joining together to enact common sense fiscal and budgetary reforms, we can ensure that essential government services continue to be provided.”
Rep. Mack Butler said, on Facebook, “The budget we passed in regular session was vetoed and the senate adjourned without voting to over-ride it. In the special session the senate passed a budget but we in the house voted it down. Third time is the charm!”
The Governor is once again going to ask the legislature to pass income tax increases by eliminating the FICA deduction, cigarette tax increases, business privilege tax increases, and possibly a beverage or soft drink tax, as well as moving use taxes from education.
Although the State takes in about $19.7 billion a year, much of that money is earmarked for specific purposes or is federal money that has strings attached to it. After accounting for the earmarks, federal dollars, earmarked monies, and education trust fund (ETF) the State General Fund (SGF) is only about $1.82 billion with the largest appropriations for the State’s long troubled Medicaid Agency and the Department of Corrections. For the last six years, the State legislature has artificially propped up the SGF with Alabama Trust Fund raids (which still have not been paid back), the Obama stimulus, and raiding the Rainy Day Reserve. All those one time shenanigans are used up, and in many cases have only worsened today’s budget situation. The lost trust fund raid money means the SGF needs to be cut by over $150 million per year to right size State government to fit state revenues. The legislature passed a $1.62 billion SGF in the Regular Session, but it was vetoed by Gov. Bentley who wants a $1.9+ billion SGF……creating the present crisis.
The legislature has three options: raise taxes; transfer $220 million in use taxes from the ETF to fill the SGF hole, or pass the $1.62 billion austerity budget which cuts the State into fiscal solvency. A lottery bill is likely to be introduced in the Special Session; but lottery dollars (if passed by the voters) would arrive too late to help the SGF in 2016.
Polls show that most Alabama voters are staunchly opposed to any tax increases; education advocates oppose the transfer of the use taxes; and the hospitals and state agencies oppose deep cuts to the social benefits offered by the State of Alabama.