By Brandon Moseley
Alabama Political Reporter
At 5:00 pm on Tuesday, September 8, the second Special Session of the 2016 Alabama legislature is set to begin and nobody seems to know what is likely to happen.
Governor Robert Bentley (R) is still holding out for an incredible $302 million tax increase package including transferring use taxes from the Education Trust Fund (ETF) to the State General Fund (SGF). The latest version of the Bentley plan includes raising income tax on most working Alabamians by repealing the FICA deduction; raising the business privilege tax; raising the cigarette tax; transferring the use tax from education to the State General Fund (SGF); but this time Bentley says he is open to anything that will raise revenue for the troubled General fund.
In 2012, the voters approved a plan to allow legislators to raid $145 million for three years rather than dealing with the budget crisis at that time. That Alabama Trust Fund money is gone and now legislators have to figure out how to deal with that reality. At the end of the regular session, the legislature passed an austere 2016 SGF that dealt with the loss of the raided trust fund raid money by cutting the general fund budget to actually meet current revenues. Gov. Bentley rejected that plan and vetoed it, forcing the current crisis. Conservatives favor rightsizing the SGF to fit existing revenues. Gov. Bentley and establishment Republicans favor raising taxes. To this point conservatives have thwarted that effort; but there are indications that that is changing as we move closer to the start of the 2016 fiscal year.
State Representative Ed Henry (R-Hartselle) told conservative radio host Cliff Simms on Wednesday: “wish I could guarantee that taxes are off the table, that we had successfully beat back the tax push. There are a number of us that have laid our political lives on the line to stop taxes. We’ve done it for two sessions now. But I feel like the tide is starting to turn on us. They just keep coming back… I think they’re probably going to beat us this time. We’re not giving up. We’re going to war. We’re going to fight with everything we have to stop it. But I feel like there are too many people in office right now who have succumbed to this idea that the government needs more of your hard-earned income.”
Rep. Will Ainsworth (R-Guntersville) said, “I feel it is important to remind the residents of House District 27 exactly where I stand. I will not support any tax increases on the citizens of Alabama because Montgomery has a spending problem, not a revenue problem. Raising taxes when our state is still recovering from a recession will also hurt families and businesses and stop Alabama’s economic growth. We must continue looking for ways to streamline government, implement efficiencies, and enact commonsense conservative reforms that fix our broken budgeting process. Unearmarking existing taxes rather than raising new ones will force state government to set priorities, address its most pressing issues, and responsibly live within its means just like our families are expected to do. Integrity is sometimes a scarce commodity in Montgomery, so I wanted to reassure you that the ‘no new taxes’ commitment I made during the campaign continues to serve as my compass and resonates deeply with me.”
Senate President Pro Tem Del Marsh said at the end of the last special session, “The Senate was able to use common sense conservative budgeting to find over $30 million in savings and once again passed a General Fund Budget as is our Constitutional responsibility. There is no question that the budget was austere, however it forced state government to live within its means with the money it has – just like families in this State do every day.”
Sen. Clyde Chambliss (R-Prattville) has been, by far, the most outspoken proponent of raising taxes in the state legislature. His plan includes cigarette taxes, high business privilege taxes, transferring the use tax, and a soft drink tax. He would also combine the budgets, isolate the budget in future regular sessions, and remove the sales tax on fresh meats and vegetables.
Sen. Chambliss said on Facebook, “I came to Montgomery to fix the budget; this long-term reform includes systemic change to our budgeting process.”
There is also talk of the lottery coming back in this session.
Sen. Chambliss said, “I am already on record stating that I would not block the peoples right to vote on a gambling bill if it had proper checks and balances in it and prohibited gambling interests from contributing to campaigns.”
The Alabama Media Group’s Chuck Dean reported, “Multiple sources say that Bentley and House of Representatives leaders led by Speaker Mike Hubbard have been in active discussions about what a budget-fixing package of bills will look like in the House and as part of those discussions has been a proposal to seek a lottery.”
House Minority Leader Craig Ford (D-Gadsden) wrote in his column, “This special legislative session gives us one more chance to create a state lottery, and we cannot waste this opportunity. Why? Because our state’s budget crisis is not going away, and we have no other real solutions for the long-term that will help our revenue problems. But most importantly, we must pass a state lottery to protect our children’s educations.”
Any lottery would have to be approved by a vote of the people; but lottery proponents have suggested that they move the use tax to deal with the SGF problem and then send an education lotter to the people after the ETF has lost the use tax to backfill the hole in education because voters are more likely to vote for an education lottery than they are a prisons and Medicaid lottery.
Many have suggested simply moving the use tax from Education to the General Fund without backfilling the education budget with anything. Growth in the ETF means that there is expected to be $260 million in the stabilization fund next year so education would not be harmed by the loss of the use taxes. Education proponents are not so sure and are reluctant to support any transfer of fund from the ETF to the SGF.
Meanwhile many sources have suggested that the leadership is close to announcing some sort of a deal to their caucuses.
Sen. President Del Marsh said in a statement on Facebook, “In the weeks since the last special session the Senate and House leadership have been working together on budgetary solutions. I believe that all parties are committed to passing a General Fund which ensures that we continue to provide the essential services of Government.”
Tuberville calls for term limits, balanced budget and lobbying reform
Tuberville has also made a major media buy across the state to trumpet this message.
Senate candidate Tommy Tuberville’s campaign began emphasizing key structural reforms that the Republican nominee hopes to advance if elected to the U.S. Senate including congressional term limits, withholding lawmakers’ paychecks unless a balanced budget is passed and a ban on former officials becoming lobbyists.
“Only an outsider like me can help President Trump drain the Swamp, and any of the proposals outlined in this ad will begin the process of pulling the plug,” Tuberville said in a statement. “Doug Jones has had his chance, and he failed our state, so now it’s time to elect a senator who will work to fundamentally change the way that Washington operates.”
Tuberville has also made a major media buy across the state to trumpet this message.
“You know Washington politicians could learn a lot from the folks in small town Alabama, but Doug Jones … he’s too liberal to teach them,” Tuberville added.
Polls consistently show that term limits are popular with people across both political parties, but the U.S. Supreme Court has ruled that imposing term limits would be adding a qualification to be a member of Congress and that can only be done by constitutional amendment.
It is an unspoken truth that when Americans send someone to Congress they never come back. They either keep getting re-elected like Alabama’s own Sen. Richard Shelby, who is in his sixth term in the Senate after four terms in the U.S. House of Representatives. On the other hand, they may become lobbyists getting paid to influence their colleagues on behalf of corporations, foreign governments or some well funded non-government organization.
Tuberville said he would ban that practice.
A balanced budget amendment almost passed in the 1980s and again in the 1990s.
Since that failure, Congress has increasingly passed bigger and bigger budget deficits. The U.S. government borrowed more money during the eight years of President George W. Bush’s presidency than the government had borrowed in the first 224 years of the country combined.
President Barack Obama followed and the TARP program propped up the post-Great Recession economy. Rather than cutting the deficit, President Donald Trump invested billions in the military and a tax cut without cutting domestic spending. The 2020 coronavirus crisis has further grown the budget.
The government has borrowed trillions to prop up the economy and provide stimulus while investing billions into medical research and treating the virus victims. Congress is currently debating a fifth stimulus package that would add more to the deficit.
Both a balanced budget amendment and a term limits amendment would have to be ratified by the states if passed by Congress. Tuberville is challenging incumbent Sen. Doug Jones, D-Alabama.
House passes General Fund Budget
By Brandon Moseley
Alabama Political Reporter
The Alabama House of Representatives passed the state General Fund Budget on Tuesday.
The General Fund Budget for the 2019 fiscal year is Senate Bill 178. It is sponsored by Sen. Trip Pittman, R-Montrose. State Rep. Steve Clouse, R-Ozark, carried the budget on the House floor. Clouse chairs the House Ways and Means General Fund Committee.
Clouse said, “Last year we monetized the BP settlement money and held over $97 million to this year.”
Clouse said that the state is still trying to come up with a solution to the federal lawsuit over the state prisons. The Governor’s Office has made some progress after she took over from Gov. Robert Bentley. The supplemental we just passed added $30 million to prisons.
The budget adds $50 million to the Department of Corrections.
Clouse said that the budget increased the money for prisons by $55,680,000 and includes $4.8 million to buy the privately-owned prison facility in Perry County.
Clouse said that the budget raises funding for the judicial system and raises the appropriation for the Forensic Sciences to $11.7 million.
The House passed a committee substitute so the Senate is either going to have to concur with the changes made by the House or a conference committee will have to be appointed. Clouse told reporters that he hoped that it did not have to go to conference.
Clouse said that the budget had added $860,000 to hire more Juvenile Probation Officers. After talking to officials with the court system that was cut in half in the amendment. The amendment also includes some wording the arbiters in the court lawsuit think we need.
The state General Fund Budget, SB178, passed 98-1.
Both budgets have now passed the Alabama House of Representatives.
The 2019 fiscal year begins on Oct. 1, 2018.
In addition to the SGF, the House also passed a supplemental appropriation for the current 2018 budget year. SB175 is also sponsored by Pittman and was carried by Clouse on the floor of the House.
SB175 includes $30 million in additional 2018 money for the Department of Corrections. The Departmental Emergency Fund, the Examiners of Public Accounts, the Insurance Department and Forensic Sciences received additional money.
Clouse said, “We knew dealing with the federal lawsuit was going to be expensive. We are adding $80 million to the Department of Corrections.”
State Representative Johnny Mack Morrow, R-Red Bay, said that state Department of Forensics was cut from $14 million to $9 million. “Why are we adding money for DA and courts if we don’t have money for forensics to provide evidence? if there is any agency in law enforcement or the court system that should be funded it is Forensics.”
The supplemental 2018 appropriation passed 80 to 1.
The House also passed SB203. It was sponsored by Pittman and was carried in the House by State Rep. Ken Johnson, R-Moulton. It raises securities and registration fees for agents and investment advisors. It increases the filing fees for certain management investment companies. Johnson said that those fees had not been adjusted since 2009.
The House also passed SB176, which is an annual appropriation for the Coalition Against Domestic Violence. The bill requires that the agency have an operations plan, audited financial statement, and quarterly and end of year reports. SB176 is sponsored by Pittman and was carried on the House floor by State Rep. Elaine Beech, D-Chatham.
The House passed Senate Bill 185 which gives state employees a cost of living increase in the 2019 budget beginning on October 1. It was sponsored by Sen. Clyde Chambliss, R-Prattville and was being carried on the House floor by state Rep. Dimitri Polizos, R-Montgomery.
Polizos said that this was the first raise for non-education state employees in nine years. It is a 3 percent raise.
SB185 passed 101-0.
Senate Bill 215 gives retired state employees a one time bonus check. SB215 is sponsored by Senator Gerald Dial, R-Lineville, and was carried on the House floor by state Rep. Kerry Rich, R-Guntersville.
Rich said that retired employees will get a bonus $1 for every month that they worked for the state. For employees who retired with 25 years of service that will be a $300 one time bonus. A 20-year retiree would get $240 and a 35-year employee would get $420.
SB215 passed the House 87-0.
The House passed Senate Bill 231, which is the appropriation bill increase amount to the Emergency Forest Fire and Insect and Disease Fund. SB231 is sponsored by Sen. Steve Livingston, R-Scottsboro, and was carried on the House floor by state Rep. Kyle South, R-Fayette.
State Rep. Elaine Beech, D-Chathom, said, “Thank you for bringing this bill my district is full of trees and you never know when a forest fire will hit.
SB231 passed 87-2.
The state of Alabama is unique among the states in that most of the money is earmarked for specific purposes allowing the Legislature little year-to-year flexibility in moving funds around.
The SGF includes appropriations for the Alabama Medicaid Agency, the courts, the Alabama Law Enforcement Agency, the Alabama Department of Corrections, mental health, and most state agencies that are no education related. The Alabama Department of Transportation gets their funding mostly from state fuel taxes.
The Legislature also gives ALEA a portion of the gas taxes. K-12 education, the two year college system, and all the universities get their state support from the education trust fund (ETF) budget. There are also billions of dollars in revenue that are earmarked for a variety of purposes that does not show up in the SGF or ETF budgets.
Examples of that include the Public Service Commission, which collects utility taxes from the industries that it regulates. The PSC is supported entirely by its own revenue streams and contributes $13 million to the SGF. The Secretary of State’s Office is entirely funded by its corporate filing and other fees and gets no SGF appropriation.
Clouse warned reporters that part of the reason this budget had so much money was due to the BP oil spill settlement that provided money for the 2018 budget and $97 million for the 2019 budget. Clouse said they elected to make a $13 million repayment to the Alabama Trust fund that was not due until 2020 but that is all that was held over for 2020.
Clouse predicted that the Legislature will have to make some hard decisions about revenue in next year’s session.
Day Care bill delayed for second time on Senate floor, may be back Thursday
By Samuel Mattison
Alabama Political Reporter
The day care bill, which would license certain day care centers in Alabama, was once again delayed on the state Senate floor after one lawmaker requested more information.
Its brief appearance Tuesday ended with state Sen. Gerald Dial, R-Lineville, saying a compromise had not yet been worked out with the bill’s detractors.
Alabama’s Senate has been hesitant to act on the legislation because of complaints of state Sen. Shay Shelnutt, R-Trussville, who has been an opponent of the bill since its introduction last year. The bill’s delay on Tuesday marks the second time its been taken off the Senate’s agenda.
The bill has had a rocky time in this year’s session, but the bill’s sponsor state Rep. Pebblin Warren, D-Tuskegee, said she is still confident about its passage out of the Legislature.
Warren, D-Tuskegee, filed the bill this session with the support of influential lawmakers including Gov. Kay Ivey, who told reporters last year that she though all day cares should be licensed.
Mainly sparked by the death of 5-year-old boy in the care of a unlicensed day care worker, the bill had great momentum coming into this year’ session.
Despite the growing support from lawmakers, Religious groups had concerns that the bill would increase state-sponsored reach into religious day cares in churches and non-profit groups.
Spearheading the dissenters was Alabama Citizens Action Program, a conservative religious-based PAC.
Warren, proponents, and ALCAP announced a compromise to the bill while it was still in the Alabama House.
Announced by ALCAP originally, the new bill was a weaker version in that it did not require that all day cares in the state be regulated. Instead, religious-based day cares would only need to be registered if they received federal funds. At a Senate committee meeting in February, Warren said a similar requirement was about to come from federal law in Congress.
The bill moved through the House in a overwhelming vote in favor of the proposal and passed unanimously out of a Senate committee a few weeks ago.
Warren, speaking to reporters after its passage from the House, said she was unsure if the bill would encounter resistance in the upper chamber.
It was the Senate that killed the daycare bill last year amid a cramped last day where senators took the bill off the floor. The bill may face similar complications this year, as lawmakers seem to be preparing to adjourn within a few weeks.
Fantasy sports bill fails on Senate floor
By Samuel Mattison
Alabama Political Reporter
Would-be Fantasy Sports players in Alabama will have to wait to legally play in the state following a Senate vote on Tuesday.
The Alabama Senate decisively killed a bill to exempt fantasy sports from the state’s prohibition on gambling.
Not even entertaining a debate on the Senate floor, the proposal was killed during a vote for the Budget Isolation Resolution, which is usually a formality vote preluding a debate.
Fantasy sports are contests where participants select players from real teams to compete on fantasy teams using the real-world players’ stats.
Since 2016, the practice has been illegal in Alabama following a legal decision by the Attorney General’s Office that categorized it as gambling.
The bill’s sponsor, state Sen. Paul Sanford, R-Huntsville, predicted the bill’s failure during a committee meeting two weeks ago, where the bill passed unanimously.
- Sen. Paul Sanford speaks to reporters after a Senate Committee meeting on Feb. 28, 2018. (Samuel Mattison/APR)
Speaking to reporter’s after the committee meeting, Sanford said the decision to file the bill was mainly a philosophical belief that the practice shouldn’t be illegal.
Sanford, a fantasy sports player before its ban, said that fantasy sports are a way to bring people closer together and not a means to win money. The Huntsville senator is not seeking re-election.
The bill’s failure in the Senate follows its trajectory last year too. A similar version of the bill, also sponsored by Sanford, failed in the Senate during the final days of the 2017 Legislative Session.
Since Sanford is retiring, it is unclear if the bill will even come back next session, or if it will even have a Senate sponsor.