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.”