I have thought long and hard about where I stand on the proposed Constitutional Amendment 1 (CA) coming up for a vote tomorrow. For those who have been living under a rock, the governor and legislature are proposing we take over $400 million from the Alabama Trust Fund over the next three years to make up for the massive shortfall in the state’s General Fund Budget. Proponents say they are tapping our rainy day fund in the middle of an economic monsoon. Opponents say they are doing little more than plugging a hole in the Titanic with tissue paper. “Don’t Bust the Trust!” has become their mantra.
Let me start by saying that these truly are desperate times for Alabama’s budgets. In the past, massive shortfalls were patched with one-time fixes — federal stimulus dollars for instance. These short-term fixes created a false sense that our budgets were sustainable. This year there were simply no more one-time fixes available and our elected leaders had to scramble to find a way to fund state government.
I would also like to point out that what is being proposed is indeed constitutional, in spite of a recent lawsuit that claims otherwise. Alabama, like every other state, is mandated to balance its budgets. The lawsuit claims the general fund budget is unconstitutional because it only balances if the CA passes. But whether the CA passes or not, proration always ensures our budgets balance. Nobody wants proration; but strictly speaking on the issue of constitutionality, the budgets are balanced when proration is enacted. Furthermore, Alabama’s fiscal year begins Oct. 1 and the proposed CA comes well before that deadline — so a special session would allow legislators to make cuts to balance the budget ahead of the next fiscal year. Either way, the lawsuit is without merit.
The legislature should also be commended for the avalanche of conservative reforms they have enacted that are beginning to put Alabama on a sustainable path.
We’ve seen positive steps on public pension reform. The Rolling Reserve Budget Act will go a long way toward ending the need for proration in the education budget. Governor Bentley’s “Road to a Billion Dollars in Savings” and the joint effort between his office and legislative leadership to “right-size” government are exactly the kind of small government initiatives Alabama needs. And on top of all that, our GOP leaders have stuck to their pledge not to raise taxes where some in the past would have caved.
These are just a few of the many examples I could point to of the Governor and the GOP-controlled legislature putting Alabama on the right track.
Because of those past successes I believe our leaders have the ability to dig in and continue making the tough decisions necessary to bring lasting reform to our state. We could save over $80 million per year by offering early retirement to 1,500 state workers of the roughly 11,000 who are eligible. We could save almost $50 million per year if all state checks were electronic transfers instead of paper. That’s almost the full amount needed to cover our shortfall before even getting into cutting down on Medicaid fraud and abuse and other cost-saving measures.
Finally, The Alabama Trust Fund is one of the few reliable revenue generators for our beleaguered General Fund Budget. Eating into the principle of the Trust will hurt our ability to stabilize the General Fund in the longterm.
I believe Amendment 1 is a sincere effort by our elected leaders to buy a little more time to figure out how to solve the longterm structural problems in our budgets. Unfortunately, I cannot support the way the proposed amendment seeks to achieve this goal — and I will be voting “no.”
Cliff Sims is the founder of Yellowhammer Strategies, a political and communications consulting firm, and the Publisher of Yellowhammer Politics. He is also an opinion contributor to numerous local and national publications — including The Daily Caller and POLITICO — and can be heard on 100WAPI, Birmingham’s Talk FM, where he is a frequent guest host. You can follow Cliff on Twitter @Cliff_Sims.
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