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Legislature

Gas tax takes effect Sept. 1.

Eddie Burkhalter

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Sherwood Sparks sure would like to see some of Alabama’s new gas tax increase, set to hit the pumps on Sept. 1,  go toward improving safety on the roads leading to his hometown of Piedmont. 

“Paying the tax doesn’t bother me,” Sparks said. “As long as I can see some results from my taxes for my city.” 

Lawmakers charged with providing oversight for how that money is spent are working to address just how the Alabama Department of Transportation makes those decisions, and that they’re made with transparency. 

The last time Alabama passed a gas tax increase the Cold War between the U.S. and the Soviet Union had just ended,  and starting Sept. 1 drivers will pay an additional 6 cents a gallon. 

Gov. Kay Ivey in March signed the new 10-cent-a-gallon gas tax into law. The initial increase will be followed by another 2 cents increase in 2020 and 2 cents in 2021. The state currently taxes gas at 18 cents per gallon and diesel at 19 cents. 

The tax is also tied to the National Highway Construction Cost Index, meaning that beginning in 2023 the tax could change by no more than a penny every two years to match possible increases in road construction costs. 

The National Highway Construction Cost Index varies from year to year, but the index grew 4.4 percent from 2003 to 2015, according to U.S. Department of Transportation estimates.  

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According to the bill signed into law, 67 percent of additional funds generated from the tax will go to the state, 25 percent to counties and 8 percent to cities. 

All of the money is to be placed into a separate Rebuild Alabama Fund, and ALDOT is to provide the Joint Transportation Committee with an annual audit report. 

Along with that gas tax increase, lawmakers approved an amendment by Rep. Margie Wilcox, R-Mobile, that strengthened oversight of the Alabama Department of Transportation by requiring ALDOT to submit a report on long-range plans to the state’s Joint Transportation Committee. 

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The amendment also allows the Joint Transportation Committee to make changes, with the governor’s approval,  of those ALDOT plans. 

Sarah Stokes, senior attorney at the Southern Environmental Law Center, told APR on Wednesday that she attended the Joint Transportation Committee’s meeting with ALDOT on July 24 and that lawmakers asked ALDOT how the department prioritizes projects. 

“ALDOT responded that the law sets out these general categories. Safety, maintenance, etcetera,” Stokes said, adding that ADOT told lawmakers that the department prioritizes projects based upon those categories. “And the legislators pushed back and said, no, exactly how do you prioritize?” 

Stokes said many other states rank projects based on objective criteria, grading projects on safety, maintenance, economic development and environmental impact, and that those measurements are quantified and listed to determine which projects need to be tackled first. 

“Virginia does this. North Carolina does this. Georgia does this,” Stokes said. 

Rep. Wilcox told APR by phone on Wednesday that the fact that the amendment that strengthened oversight of ALDOT was approved before the gas tax is a signal of how important the state believes that oversight to be. 

Wilcox is working on a plan to develop ALDOT’s website to make it easier to see what the department is doing with taxpayer money and how those decisions are made. 

“They don’t give us the transparency, and we are the responsible agency to fund DOT,” Wilcox said. “So this committee, if we don’t get the answers and the transparency that we and the voters want, then that is on the table. There’s no law that we have to fund them at the levels they request.” 

Wilcox said ALDOT discussed with the committee much of the department’s funding plans, but members pressed the department on details about the processes used to make those decisions. 

“It’s very important that they spread it around in a manner and with priorities that we can understand,” Wilcox said. 

Tony Harris, a spokesman for ALDOT, told APR on Wednesday that the department will discuss with committee members at the next meeting in October the agency’s views on the criteria used to select projects. Harris said the hope is that ALDOT and committee members will come to a shared view of the definitions of that criteria. 

Stokes said that the danger of not using objective criteria to rank projects is that those decisions can instead be based on “political motivation.” 

“And I think it would be helpful for ALDOT in the end, so that they could show their work,” Stokes said.

Eddie Burkhalter is a reporter at the Alabama Political Reporter. You can email him at [email protected] or reach him via Twitter.

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Legislature told budgets are in good shape despite pandemic and economic downturn

Brandon Moseley

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(STOCK PHOTO)

Members of the Alabama Senate were in Montgomery Thursday for hearings on the budget, where Senators were told that both of the budgets are in good shape looking forward to 2021.

The meeting was chaired by Senate Finance & Taxation Committee Chairman Greg Albritton.

Kirk Fulford is the Deputy Director for the Fiscal Division of the Legislative Services Agency.

“I don’t know a better time to do this than in the middle of the biggest health emergency we have ever see and a recession,” Fulford said of the Senate decision to hold a budget hearing in July while the legislature is not in session. “I hope you hold more of these between now and the start of the next legislative session.”

“Both budgets you passed are in good shape looking forward to 2021,” Fulford said predicting that both the State General Fund (SGF) and education trust fund (ETF) would be able to avoid proration even if the economic downturn is protracted and state revenues experience no growth at all in fiscal year 2021, which starts October 1.

The state of Alabama uses a very arcane budgeting system where over 93 percent of revenues are earmarked and all the money goes into two budgets set by the Legislature (the ETF and SGF). There are also $billion of dollars in revenues to state agencies not included in the budgeting process. The state also collects another roughly $7.5 billion in federal dollars in a typical year, most of it in matching funds.

Despite the economic crash that occurred in March due to the forced economic shutdown and the lingering economic costs to fight the spread of the coronavirus, Fulford said that he expected that both budgets will finish 2020 with growth. Much of that was due to the robust economy the state experienced from Oct. 1 to Feb. 28 before the coronavirus crisis and Fulford broke the state’s fiscal performance down for both budgets into separate income statements for the Oct. 1 to Feb. 29 period and the Mar. 1 to June 30 period.

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The SGF, which funds non-education state agencies, budget was $2,151,954,704.

“Things were growing great through February,” Fulford said.

Since then the state’s lodging tax receipts have experienced a decrease of $7,4 million and oil and gas revenues are down $4.4 million; however the new Simplified Sellers USE Tax grew by $51 million thru June. More people are buying more of their stuff online and SSUT allows the state to collect much more taxes on those online sales.

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“The General Fund’s strength is built on several changes that have been made by the legislature,” Fulford said. “The state has not prorated the general fund budget since 2012.”

Fulford predicted that the state will not need to prorate the general fund, “Even if there is a recurrent COVID situation and even if there is another shutdown.”

Fulford praised the legislators for moving that growth revenue to the general fund. Prior to the redistribution of use taxes from the ETF to the SGF, use taxes brought in less than $one million to the general fund. The Simplified Sellers Use Tax and the Supreme Court ruling in Wayfair vs South Dakota changed all of that. In FY2019 the SSUT brought in $70 million. Fulford anticipates that it will bring in $125 million in FY2020 is complete.

In addition to the SSUT Fulford credited legislators for their conservative budgeting and for in 2012 the legislature changed how the Alabama Trust Fund pays out its oil and gas trust fund moneys from a market fluctuating model to a fixed payment model. The Alabama Trust Fund will pay $104 million for the SGF in the current year and $116 million for the next year.

Fulford predicted that the SGF will have 2021 receipts of $2.406,000 receipts with $46 million in growth in FY2021. Fulford said that the FY2021 SGF budget passed by the legislature is $170 million more than the FY2020, but $170 million less than the Governor had predicted in February. “It is still the highest general fund in state history.”

Fulford next broke down the ETF, the education budget.

“We were anticipating above average growth rate in 2020,” Fulford said.

The 2020 ETF budget estimated receipts of $7,582,260.

Fulford said that thru February the ETF receipts were up 8.04 percent primarily due to increase in income and sales tax revenues. From March 1 to June 30 revenues have declined by 17.83 percent versus the same period in 2019. ETF revenues in that period have declined by $405,862,551.

Fulford said that part of that is due to moving the payment dates back, both the income tax deadline of April 15 to July and the quarterly estimated payments.

“We will know more by the end of the month,” Fulford predicted, “We anticipate that a lot of that money will come in in July. We will know by the end of the month what those numbers look like.”

Despite the economic collapse total ETF growth for 2020 is 1.09 percent. Net receipts are $5,473,075 by the end of June. $58,980,858 in growth due to the large annual growth before the COVID-19 impact of $224.5 million.

Fulford said that a provision in the Rolling Reserve Act allowed the state Finance Director to transfer $301.6 million from the budget Stabilization Fund to alleviate cash flow problems in the ETF. The state may not need that money anymore by the end of July, depending on July receipts.

Citing the Rolling Reserve Act and the conservative budget passed by the legislature, Fulford predicted that the state an cover ETF next year even at zero growth in revenue.

State Finance Director Kelly Butler explained to the Senators how the CARES Act was being appropriated to the state. The estimated total allocation to Alabama was $4.100,738,000 for COVID-19 expenses. $1.9 billion was appropriated to the state to spend. $115 million had to go to Jefferson County leaving state government with $1.789 billion to appropriate. Butler explained that the money is very limited in what it can be spent on and the state has had to have guidance from federal officials on their latest interpretations of the CARES Act rules.

Fulford explained that the Payroll Protection Program has greatly benefitted state finances.

Alabama businesses received 7,878 loans thru the closing of the PPP program deadline on June 30.

“408,803 jobs were retained because of the loan program,” Fulford said. “The situation with our economy would be vastly different if that program had not been established.”

State Senator Jim McClendon (R-Springville) said that a record over 2000 people tested positive for coronavirus just today. If everyone follows the health protocols, that person and everyone in that household have to self quarantine for 14 days if they don’t have it and if they do get COVID-19 or have to care for someone with COVID-19 they could be out from work for over a month.

Fulford acknowledged that there was a “Trickle down effect to everyone in that household,” and that “Has an impact going forward and one that you have to pay attention to.”

“I am concerned about the long lasting effects of this virus,” Butler said. “We are going to have to learn to live with this virus until it is cured, an effective therapy is developed or a vaccine.”

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Legislature

State senators briefed on prison construction plans

Brandon Moseley

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(STOCK PHOTO)

Alabama Department of Corrections Commissioner Jeff Dunn told members of the Senate budget committees Thursday that the department is moving forward with the process of seeking bids on three new state prisons.

Among other topics addressed was the status of the Alabama Prison Program.

Dunn said that because of the long neglected maintenance of the existing prisons, “We are being required to decommission a facility every 23 months.”

Dunn said that they have already decommissioned Draper and the main facility at Holman, and there could be another prison that has to be decommissioned in the next year.

“This issue is due to 30 years of neglect and is beginning to have a direct and measurable impact on our ability to do our jobs,” Dunn told the senators. “We likely will have to decommission another one.”

Dunn explained that ADOC had requested corporations and consortiums to prepare proposals on building the mega-prisons in Spring 2019. By Fall, ADOC had been able to ask four groups to make proposals to the state.

“Two have self-eliminated,” Dunn told senators. Two groups submitted proposals to the state in May, and now ADOC is in the process of studying the financials of the two remaining bidders. “The financial evaluation could be finished by the end of July.”

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Dunn said that ADOC will be able to identify the bidder that has been invited to negotiate with the state as soon as August or perhaps in early September. There will be three bids, one for each of the three new facilities. The Governor will then negotiate with the bidder on the three contracts for the three facilities.

Dunn said he hoped that the contracts will be finalized by January. “The lease payments will come out of the general fund.”

State Sen. Jim McClendon, R-Springville, asked: “Does the Legislature have any role in this at all?”

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Dunn said that one of the benefits of building the new facilities is that they will be, “Considerably more staff efficient than our facilities now. There will be staff savings, consolidation savings, and energy savings. It is not our intent to come to the legislature and ask for a bump up to pay for this.”

“We have requested to have facilities with a 50 year expected life,” Dunn said. “The maintenance is included in the contract.”

Dunn explained that the lease contracts will be for 30 years. “Something will have to occur after 30 years.”

Sen. Linda Coleman-Madison, D-Birmingham, asked if the state will own the three mega-prisons at the end of the thirty-year contracts.

“I do not know at this point what exactly will happen at the end of the lease,” Dunn answered. “We will not own the buildings.”

State Sen. Bobby Singleton, D-Greensboro, said, “We are going to spend $2 billion and never own it!”

“I can’t speak to what will or will not happen in the future,” Dunn responded.

State Sen. Cam Ward, R-Alabaster, said, “We have not built a new facility in 30 years. Facilities built 30 years ago are pretty worthless.”

The state is facing lawsuits in federal court over its chronic prison overcrowding.

“We will not completely extinguish the overcrowding problem by building these new facilities,” Dunn told the senators.

“The purpose of these three new facilities is to more from warehousing criminals to rehabilitating citizens,” Dunn said. “These new facilities are built with that vision in mind. 95 percent of our inmate community will eventually return to the community.”

It is in our best interests to prepare those inmates for their return to society, Dunn said. “Right now our facilities fight against that, they don’t support that.”

“These are huge projects,” Dunn said when asked to provide estimates of when the new prisons would open. There will be a six month stagger between the opening of each of the three facilities. The construction time for each facility is ranged from 28 to 36 months. The third facility is bigger than the other two and it will take more time. “We will be negotiating all of that.”

“Currently we are at 155 percent capacity,” Dunn said. “Once we get these facilities built we will be somewhere between 120 and 125 percent capacity.”

“137.5 percent was the number used in the California case,” Dunn explained. “We wanted a number below that. We felt the need to build in a buffer to protect the state.”

Sen. Bill Beasley, D-Clayton, said, “I am concerned about the local governments, the water and sewer boards who have entered into debt to support current facilities. How are they going to be compensated for if they have indebtedness?”

“We are working on an infrastructure masterplan,” Dunn answered. “Did it stay in inventory? Could it be repurposed? Could it be re-missioned for another purpose? Could it be a lite industrial site? We have had talked with the Department of Commerce and Secretary Canfield about that.”

“Nothing is going to close or change for two or three years when we open the first facility and they are staggered after this.” Dunn said. “Those concerns will all be vetted. I do not have the ability to make any commitment at this time.”

Dunn said that the main facility at Holman prison has been closed taking their population down from 1,000 prisoners to 314.

“Death row has been moved,” Dunn added. That staff has been decreased. “28 members have been reassigned from Holman to Fountain Correctional Facilities a mile and a half away.”

Dunn said that ADOC is currently in negotiations with a corporate owned prison in Perry County to purchase that facility and convert it into a transitional reentry center.

“We are in active negotiations with then and hope to have some news soon,” Dunn said.

Dunn also briefed the senators on the COVID-19 impact on ADOC at the same committee meeting.

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Alabama lawmaker pre-files legislation to allow removal of Confederate monuments

If passed, the measure would permit counties and cities to relocate historic monuments currently located on public property.

Brandon Moseley

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A Confederate monument in Birmingham's Linn Park was removed. As have monuments and memorials in Mobile and on the campus of the University of Alabama.

Alabama State Rep. Juandalynn Givan, D-Birmingham, introduced legislation this week in advance of the 2021 legislative session that, if passed, would permit counties and cities to relocate historic monuments currently located on public property. Givan’s bill, HB8, would also provide for the relocation of historic memorials to sites appropriate for public display.

“Across the state of Alabama, citizens are calling for the removal of prominently placed statues and monuments that are insensitive or offensive to the communities that surround them,” Givan said. “City and county governments must be able to address the demands of their citizens. This legislation provides a tool for local governments to safely remove these artifacts so that they can be moved to a site more appropriate for preserving or displaying the historical monument.”

Removing the monuments and historical markers is currently illegal under Alabama’s Memorial Preservation Act, which the state Legislature passed in 2017. Givan has been an outspoken opponent of that Republican-sponsored legislation. In 2018, Givan introduced a measure to repeal the bill that barred the removal of monuments.

“I believe HB8 can achieve bipartisan support,” Givan said. “My bill seeks to balance the wishes of the people. It respects the will of communities that want the monuments removed. It also respects those who wish to preserve history. With this legislation, Confederate monuments could be relocated to a public site, like Confederate Memorial Park, whose purpose and mission is to interpret and tell these stories. When the Legislature convenes, I hope to have the support of both the House of Representatives and the Senate.”

If enacted, HB8 would permit county and municipal governments to remove memorial monuments, including permanent statues, portraits and markers, located on public property in their jurisdictions. It would require a transfer of ownership of the removed monuments to the Alabama Department of Archives and History or the Alabama Historical Commission. Finally, the bill would instruct Archives and History or the Historical Commission to maintain and display monuments removed by local authorities in a location accessible for public display.

The Southern Poverty Law Center, which keeps track of Confederate monuments and memorials across the country, released an update to its Whose Heritage report, which tracks symbols of the Confederacy on public land across the United States. They report at least 30 Confederate symbols have been removed or relocated since George Floyd’s death on May 25, 2020.

These include 24 monuments removed, 5 monuments relocated and the Mississippi state flag replaced. Since the Charleston church shooting in 2015, 115 total symbols have been removed from public spaces. These include 87 monuments that have been removed or relocated from public spaces. At least 78 monuments were removed and nine were relocated.

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SPLC says there are still nearly 1,800 Confederate symbols on public land, and 739 of those symbols are monuments. The SPLC has prepared an “action guide” to help community activists target Confederate historical markers and memorials for removal.

President Donald Trump has denounced what he calls “cancel culture” that seeks to remove historical monuments and statutes.

“There is a growing danger that threatens every blessing our ancestors fought so hard for, struggled, they bled to secure,” Trump said. “Our nation is witnessing a merciless campaign to wipe out our history, defame our heroes, erase our values, and indoctrinate our children.”

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Marsh’s budget hearing compared to revenge porn

Bill Britt

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Senate President Pro Tem Del Marsh, R-Anniston, has scheduled a general fund budget hearing for early July — purportedly to prepare for the 2021 Legislative Session that begins in February.

But that is not the real reason for the budget hearing, according to Senate insiders who spoke on the condition of anonymity to avoid provoking Marsh. The actual purpose of public hearings, according to multiple sources, is to try to find a way to embarrass Gov. Kay Ivey.

In a press release from his office, Marsh says the budget meetings will focus on funding prison reform and rural broadband.

However, an agenda circulated for a July 9 budget committee meeting obtained by APR makes no mention of broadband and focuses entirely on the Ivey administration’s spending.

In the press release, Marsh said that the budget hearing is needed to address “a potential $2 billion-dollar prison reform proposal.”

But according to the Governor’s Office and published reports about Ivey’s prison reform plan, there is no mention of a $2 billion proposal as Marsh claims.

He also states that the other reason for the hearings is to address “a stunning lack of rural broadband investment.” However, broadband is not an item on the agenda.

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Marsh’s enmity toward Ivey was on full display in the days after the governor revealed his “Wish list” in May, to spend federal relief money on a variety of projects only vaguely related to the economic crisis caused by the COVID-19 pandemic.

According to those who regularly interact with the Senate, he is still angry that Ivey exposed his plan to appropriate nearly $1.9 billion in federal relief money to finance pet projects, which included spending $200 million on a new State House.

The money the state received under the CARES Act was to be allocated to shore up business, citizens’ interests and institutions ravage by the shutdown due to the spread of COVID-19.

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First, Marsh denied the existence of a “wish list,” then he said Ivey asked for it, and finally, he took ownership of the list and said he thought $200 million for a new State House is a “good idea.”

For weeks after the debacle, Marsh aided by some Senate Republicans tried to spin what happened without success.

Marsh had also wanted to use $800 million in CARES Act funds to build out rural broadband and had reportedly hoped to use the budget meeting to push his broadband plan forward.

Ivey blocked his plan to use CARES Act funds for pork projects and convinced the Legislature to reject Marsh’s preferred budget in favor of Ivey’s executive amendment.

“First Ivey made him look greedy and foolish and then she turned most of the Legislature against him,” said one of APR‘s sources.

Recently, Ivey was once again a step ahead of Marsh when just days after he announced his July budget hearings to consider broadband expansion, Ivey released her plan to spend $300 million on rural broadband, stealing his thunder.

According to APR‘s Senate sources, Ivey’s latest move was another blow to Marsh’s ego.

“Del, [Marsh] has power, but he’s never had to deal with a governor who knows how to counter him,” said another Senate insider.

Another regular observer of Marsh said, his latest move to hold budget hearings is akin to “revenge porn.”

“She dumped him, and now he wants to get even, sounds a lot like revenge porn to me,” the source said.

At the July hearing, Ivey Administration officials will be questioned on CARES Act spending, budgets for the department of corrections and pardons and parole.

Finance Director, Kelly Butler, will testify to what CARES funds have been spent and what remains.

ADOC Commissioner Jeff Dunn will be queried on several issues, including hiring, overtime pay, prison construction, and Holman prison’s status and personnel.

Pardons and Paroles Commissioner, Charles Graddick, will face the committee to discuss personnel costs, equipment purchases with an “emphasis upon computers, software, vehicles, office furniture and other substantial expenditures,” according to the document.

Lastly, the committee will question Personnel Department Director, Jackie Graham, to give an account for DOC and ABP&P personnel growth plans.

While it is wholly within the Legislature’s purview to approve and exercise oversight of government spending, this is not what the budget hearings are about according to APR’s sources.

According to several Senate insiders and others with knowledge of Marsh’s thinking, this is a move to paint Ivey’s administration as “out of control on spending.”

“This is a trap Marsh hopes to use for PR, but what if there’s nothing to see, how does he spin it,” asked an individual with close ties to the administration. “She’s kicked his tail before; she’ll likely do it again,” the source said.

 

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