Fulfilling a resolute commitment made to taxpayers, the Alabama Senate passed Senate Bill 1 (33-0) Tuesday, which transfers $59.9 million from the State’s General Fund budget to the Alabama Trust Fund.
The Alabama Trust Fund (ATF) was created as a “rainy day” account to be used only in times of fiscal crisis and is funded by royalty payments that are received monthly from oil and gas companies. In 2012, the ATF transferred $437 million to the State’s General Fund to help with proration and the financial crisis that the Alabama Legislature found itself in.
“During those years, amid a national recession, we had a significant shortfall in funds. It was the Legislature’s responsibility to fill the gap of the General Fund and keep Alabama operational,” said Sen. Greg Albritton (R-Atmore). “To overcome these critical shortfalls, the Legislature went to the Alabama taxpayers to seek their approval through a constitutional amendment to authorize the use of monies from the Alabama Trust Fund.”
In 2013, the Legislature took action to repay the debts with The People’s Trust Act which implemented a schedule of repayments of the amounts transferred from the ATF. With the assistance of the Deepwater Horizon BP Settlement Funds and the state of Alabama’s annual disbursements, the total amount repaid to the ATF to date is $377.3 million.
“This final payment to the Alabama Trust will make us ‘debt-free’ and fulfills our obligation to the citizens we represent,” Albritton said. “When this money was initially borrowed, we made a promise and commitment to pay it back. I am glad to say that due to our fiscal conservative nature, repayment is final and complete.”
Senate President Pro Tempore Greg Reed said it was the Legislature’s responsibility to “pay off our bills.”
“In the early years of my Senate tenure, Alabama was in a critical place. We borrowed nearly half a billion dollars just to sustain government function,” he said. “It was then up to the Legislature to execute hard-working and conservative fiscal measures to dig ourselves out of this hole.
“Now that we have the available funds in our budget surplus, it is our responsibility and duty to pay off our bills and I want to thank my legislative colleagues for their effort in accomplishing this task.”
This $59 million from the State’s General Fund is separate from the $1.05 billion in American Rescue Plan Act (ARPA) funds also being appropriated during this special session. Senate Bill 1 will advance to the House of Representatives for its first reading today.
