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Astounding percentage of Alabama’s budget is automatically spent, leaving state little flexibility

Did you know that ninety-three percent of Alabama’s budget is earmarked? A recent report from the Alabama Policy Institute explores this little-known fact about Alabama’s budget. 

Originally, an “earmark” was a sign of ownership–a mark in the ear of a sheep or other animal.  Today, earmarks are the sign of bad fiscal policy.

Earmarking is the dedication of certain tax revenues to the financing of specific programs. Currently, 93 percent of Alabama’s tax dollars are earmarked, by far the highest of any state. To put this into perspective, the state with the second-highest percentage of earmarks is Michigan at 63 percent.

This means that state officials only have discretion over how to spend 7 percent of Alabama’s tax dollars.

The excessive amount of earmarking in Alabama’s budget denies our state the financial flexibility that is necessary for taxpayer money to be spent efficiently and effectively.

So, what can be done about the earmarking issue? The Alabama Policy Institute offers two recommendations to drastically reduce its excessive amount of earmarking: setting a target of 25 percent or less earmarking in Alabama’s budget, and eliminating all earmarks that do not align with Alabama’s needs and priorities.

By implementing the recommendations of this Guide, state officials would be able to shoulder the responsibility of Alabama’s budget—and start spending taxpayer money so that it best meets Alabama’s needs and priorities.

Click here to read the full report, Guide to the Issues: The State Budget: Earmarks.

Taylor Dawson is director of communications for the Alabama Policy Institute, an independent, nonpartisan, nonprofit research and educational organization dedicated to strengthening free enterprise, defending limited government, and championing strong families.