Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
An informative thread/post (by BamaSailor) recently appeared on the Mobile forum about this topic, but it really is a statewide question. So I'm bringing it up here on the more general state forum.
The amendment would authorize the state to transfer to the General Fund $145.8 million per year (over the next 3 years) from the Alabama Trust Fund. This fund contains most of the royalties paid to the state by companies that pump natural gas offshore. It was set up by a Democratic Legislature some years ago as a state savings accounts to support very specific things (I believe the Education Fund is one if the recipients) and currently contains $2.3 billion. The withdrawals of this amendment would be (supposedly temporary) additional ones to support other things funded by the General Fund (such as Medicaid and prisons).
The current Republican Legislature passed a FY2013 budget in May that assumed this amendment would pass (the only way, evidently, that they were willing to balance the budget, as required by law).
This thing has caused a real brouhaha in this state. Already a former state senator has sued to declare the budget illegal. He contends that the law requires the budget to be balanced when it is passed, and that balancing it on the basis of future approval by voters to take money out of the Trust Fund does not meet this requirement. Right now it looks rather iffy as to whether the amendment will pass.
The wording of the amendment is atrocious (see BamaSailor's thread to read it). It contains a long and threatening preamble about the dire things these new withdrawals will prevent. Such things as the devastation of Medicaid funding and the mass release of convicted felons from prisons. These words are superfluous and have nothing to do with the constitutional question at hand.
The opponents (which include many Democrats and some Republicans) say this is just the legislators "kicking the can down the road" for the next 3 years and putting the onus on the voters to prevent a budget disaster. They maintain the governor and legislators lack the guts to make the spending and tax reforms necessary to put state budgeting on an even keel. They fear it will open the door to future raids on the Trust Fund. And there are no provisions in the amendment to ever pay the money back.
Bentley and his crew must be getting worried because there is now a lot of talk in Montgomery that the intention was always to pay the money back. The legislators just "forgot" to put a payback provision in the amendment. Now they're making noises about passing a law in the next session that requires payback over the period from 2015 to 2025. Opponents scoff that there is absolutely no guarantee that the money will ever be available for paying the Trust Fund back.
So on the main question. What's a voter to do? I am still undecided, torn between the possibility of real problems arising if the amendment is turned down and resentment about the way the whole thing has been handled by the governor and legislature. It almost seems they are trying to blackmail us into approving it. How do you intend to vote and why? Thanks for your input.
Simple....vote no. Any time they want to raid special funds and put them in the general fund, I vote no. The reason being is because they will use specific reasons to try to get the amendment passed and get access to the funds but then if it passes, guess what.....the programs they used as reasons still get neglected and the money gets squandered away after all the political battling is finally over with. I would rather it sit there, not get used and collect interest in case we ever really need it than it be put in the general fund and wasted. If they don't have enough money for the budget, then do like businesses do and cut waste and increase efficiency.
I don't have a problem with tapping into the special fund, given the economic urgency of matters. That's really why it's there, after all. What I do have a problem with is non-specific wording on how long this will be in effect, how the money will be repaid, and how it will be used. After all, Lyndon Johnson ensured that Social Security would eventually bankrupt when he broke the piggy bank for pet projects.
Based on this information, I would definitely vote NO. The law requires the legislature to balance the budget -- robbing the piggy bank to do that does not, in my opinion, balance anything but simply postpone the inevitable.
I won't buy into their scare stories either. The legislature and powers-that-be need to learn from the economic mess facing Alabama and the country. They need to adjust their spending, if that means cuts, then so be it. You can never know when a "true emergency" will surface that will necessitate using that fund, but certainly not a run-of-the-mill requirement to balance the budget.
The "Alabama Medicaid Amendment" will appear on ballots September 18, 2012, providing for "Transfer of $145.8 million from an oil and gas trust fund to the General Fund for Medicaid budget."
Here's the text of the Proposed Amendment (from ALISON, Regular Session 2012, search for SB 147):
Quote:
PROPOSED AMENDMENT
Section 1. (a) Notwithstanding any other provision of this constitution, beginning with the state's 2012-2013 fiscal year, the following distributions shall be made annually from the Alabama Trust Fund in lieu of any other distributions of trust income, realized capital gains, or unrealized capital gains provided by law:
(1) An amount equal to thirty-three percent (33%) of the oil and gas capital payments paid into the Alabama Trust Fund for the fiscal year ending one year prior to the beginning of the fiscal year for which the distribution is being made plus five percent (5%) of the average market value of invested assets of the Alabama Trust Fund as of the end of the three fiscal years ending one, two, and three years prior to the beginning of the fiscal year for which the distribution is being made shall be distributed as follows:
a. Ten percent (10%) of the amount distributed shall be paid to the County Government Capital Improvement Fund and shall be distributed pursuant to Section 11-29-6, Code of Alabama 1975, as amended.
b. Ten percent (10%) of the amount distributed shall be paid to the Municipal Government Capital Improvement Fund and shall be distributed pursuant to Section 11-66-6, Code of Alabama 1975, as amended.
c. If the constitutional amendment proposed by Act 2011-315 is ratified, then ten percent (10%) of the amount distributed, but not more than fifteen million dollars ($15,000,000) in any one fiscal year, shall be paid to the Forever Wild Land Trust. This distribution shall continue through the fiscal year ending September 30, 2032, and shall not be made after the end of that fiscal year. If the constitutional amendment proposed by Act 2011-315 is not ratified, then one percent (1%) of the amount distributed, but not more than one million dollars ($1,000,000) in any one fiscal year, shall be paid to the Forever Wild Land Trust Stewardship Account.
d. One percent (1%) of the amount distributed, but not more than five million dollars ($5,000,000) in any one fiscal year, shall be paid to the Alabama Senior Services Trust Fund.
e. The remainder of the amount distributed shall be paid to the State General Fund.
(b) Beginning with the state's 2012-2013 fiscal year, an amount equal to five percent (5%) of the average market value of invested assets of the County and Municipal Government Capital Improvement Trust Fund as of the end of the three fiscal years ending one, two, and three years prior to the beginning of the fiscal year for which the distribution is being made shall be distributed as follows:
(1) Fifty percent (50%) of the amount distributed shall be paid to the County Government Capital Improvement Fund and shall be distributed pursuant to Section 11-29-6, Code of Alabama 1975, as amended.
(2) Fifty percent (50%) of the amount distributed shall be paid to the Municipal Government Capital Improvement Fund and shall be distributed pursuant to Section 11-66-6, Code of Alabama 1975, as amended.
(c) Notwithstanding the provisions of subsections (a) and (b) of this Section, if market or financial conditions dictate that distributing the entire amounts authorized by this amendment would be detrimental to the preservation of the invested assets of the Alabama Trust Fund, the preservation of the invested assets of the County and Municipal Government Capital Improvement Trust Fund, or both, the Board of Trustees of the Alabama Trust Fund in its sole discretion may, by a two-thirds recorded vote of the entire membership of the Board, elect to distribute a smaller percentage of the oil and gas capital payments, a smaller percentage of the average amount of invested assets, or both. The Board shall make this election at least six months prior to the beginning of the fiscal year for which the distributions will be made.
(d) For purposes of this amendment, "invested assets" means all assets which are invested in accordance with the investment policy statement adopted by the Board of Trustees of the Alabama Trust Fund. Invested assets shall not include investments in land or properties acquired for the Forever Wild Land Trust and vested in the Alabama Trust Fund and shall not include any outstanding and unpaid amounts due to the Education Trust Fund Rainy Day Account or to the General Fund Rainy Day Account.
Section 2. A County and Municipal Government Capital Improvement Trust Fund Advisory Committee is created. The Committee shall be composed of three members appointed by the Alabama League of Municipalities and three members appointed by the Association of County Commissions of Alabama. The Committee shall serve in an advisory role, and the Board of Trustees of the Alabama Trust Fund shall define the duties of the Committee.
Section 3. Beginning with the state's 2012-2013 fiscal year, whenever funds are withdrawn from the Education Trust Fund Rainy Day Account or the General Fund Rainy Day Account, there shall not be any additional transfer of funds into the County and Municipal Government Capital Improvement Trust Fund, and investment income earned on amounts repaid to the Education Trust Fund Rainy Day Account and the General Fund Rainy Day Account shall not be distributed to the State General Fund.
Section 4. Beginning with the state's 2012-2013 fiscal year and continuing through the state's 2014-2015 fiscal year, there is hereby transferred $145,796,943 annually to the State General Fund from the Alabama Trust Fund.
Section 5. All laws or parts of laws in conflict with this amendment are repealed, including, but not limited to: Those portions of Amendments 450, 543, and 666 to the Constitution of Alabama of 1901, relating to the distribution of trust income, realized capital gains, and unrealized capital gains; Amendment 668 to the Constitution of Alabama of 1901, relating to the distribution of trust income; those portions of Amendment 803 to the Constitution of Alabama of 1901, relating to additional transfers to the County and Municipal Government Capital Improvement Fund and the distribution of investment income on repayments to the Education Trust Fund and State General Fund Rainy Day Accounts; and Sections 11-66-5 and 11-29-5 of the Code of Alabama 1975, as amended, relating to appropriations of trust income to the County and Municipal Government Capital Improvement Trust Funds.
Here are some articles with quotes from Governor Bentley:
Quote:
"I'm not sure there will be a Plan B other than the cuts," Bentley said.
The governor said that he would have to likely make 17 percent across-the-board cuts to state agencies which would have devastating consequences for Medicaid and state prisons. "But I can tell you this. We go back into special session and have to deal with this issue, everything is on the table. Everything," Bentley said.
"That includes tax breaks. That includes fees. That includes taking away incentives that some of these companies have right now that they are currently enjoying," Bentley said.
...The governor said he believes Alabama should shift to a single budget instead of one for education and one for other state agencies.
"It's ridiculous Alabama is one of only three states that has two budgets and one of those budgets has no growth taxes," the governor said.
Bentley said people like to say, 'Well, we don't trust politicians.'"
"I say why don't you elect politicians who are trustworthy," Bentley said.
At Bentley’s urging, legislators in the 2012 regular session approved a constitutional amendment that asks voters to take $146 million a year from the oil and gas-backed Alabama Trust Fund for three years — a total of $437 million — and transfer it to the General Fund that pays for non-education services such as Medicaid and prisons.
The issue will be on statewide ballots Sept. 18.
Bentley proposes shifting the $146 million a year for three years to get the General Fund over rough periods in order to prevent cuts in services like Medicaid and releasing prisoners.
Another $50 million in one-time money would go to the General Fund for the new fiscal year beginning Oct. 1. The amendment originally was tied to Medicaid, but that was changed and now if voters approve the money simply will go to the General Fund. The new fiscal year’s General Fund budget is $1.68 billion.
...“For first time ever, we have some growth money that’s going into the General Fund, we have 25 percent of all use taxes going into the General Fund and 75 percent of Internet sales taxes that will continue to grow,” Bentley said. “I believe in three years as those grow, we will not have to take any more money out of the Alabama Trust Fund.”
I respect Governor Bentley and his deep knowledge of the State budget; before he was elected Governor, he was THE most knowledgeable legislator regarding the budget. Bentley has made serious cuts to the budget for the past couple of years and has made some reforms to the operations of the budget office and State government to improve efficiency. I also like the guy.
However, there are many who oppose the Amendment:
Quote:
“I’m against the amendment,” said (Huntsville State Senator Paul) Sanford, who endorses an alternative budget plan that aims to erase the deficit by cutting millions in government pork. “I and the people I talk to don’t see the willingness to trust that the government is going to do the responsible thing…One of my bills that passed this year consolidated two agencies: Department of Labor and Department of Industrial Relations. I think we need to do more measures like that and curtail some cost. A lot of these suggestions have been put on the desk and are collecting dust.”
“I’m not voting for it,” former state senator and 2010 GOP gubernatorial candidate Bradley Byrne said last week. “I was surprised something at the last minute like this was pushed without more thinking.”
Byrne advocated attacking General Fund spending, especially Medicaid that unless reformed, he said, according to Legislative Fiscal Office predictions will eat up the entire General Fund by the end of the decade.
“I don’t think it is wise for us to borrow, take over $400 million out of the Alabama Trust Fund, to plug a problem with an operating expenditure,” Byrne said. “Medicaid has been a problem for 10 years and we have done nothing to take care of costs.”
I know that a lot of fat has been trimmed from the State budget (like State support for festivals and non-profits), however I think that those cuts don't address the long term budget problems. IMO this amendment is on the ballot to give the legislature political cover to make hard choices when it fails.
I'm of two minds. On the one hand, I do buy into the idea that a lot of worthy programs (Medicaid, etc...), including possibly my own employer, will be greatly hurt. However, this is the gov't the people of Alabama want. It is pointless to push it off (I don't see a large economic change in 3 years) and both the politicians and the people need to be forced to deal with it sooner rather than later. I'm personally voting no, but I understand the rationale for voting yes, since its likely those that immediately pay will be those who can least afford it. But I do agree its to give the legislature political cover and avoid making hard choices and public positions. People need to accept that you can't have the tax structure we have and decent services, so the choices must be made and realities faced.
I'm progressive in my general values on economic policies, but fiscally conservative in the true sense of the word when it comes to budgeting.
Last edited by bluebeard; 09-17-2012 at 07:14 AM..
Reason: 2s`
State Senator Paul Sanford says "a "no" vote on the Sept. 18 constitutional amendment will force the debate on this much-needed change in the way Alabama makes budgets for our future generations":
"...Alabamians are being told the state General Fund budget hinges on the passage of the Sept. 18 constitutional amendment. Doom and gloom are being served up like turkey and dressing around the Thanksgiving dinner table. We have once again been offered a one-time solution to a multigenerational problem -- take from future generations in order to pay for our current expenditures...
In order to really fix the underlying problem, we must rethink the paradigm of compartmentalizing specific revenues for specific projects or agencies. Instead, we should budget based on priorities, needs and impact. Vital functions of government should be identified and our citizens assured that those vital services will be funded first. It is past time that we have some form of a unified budget that offers growth potential for these vital functions of government."
Dale Jackson of WVNN collected comments from legislators:
State Senator Paul Bussman (NO) - "I am a NO vote. For the last 4-5 years we have propped up the budget with one time money, either federal stimulus money, capital gains decision by the AG, and now a transfer from the Trust fund."
State Representative Dan Williams (NO) - "I feel that this referendum does not need to pass. The Alabama Trust Fund wasn’t set up to be a rainy day fund, but one to draw interest which can be used as a source of revenue to the state general fund, and some portion to be passed on down to our county and city government budgets. The Sept. 18 referendum should have included a responsible payback but did not include it... I would assume that the Governor will have other plans to deal with the budget shortfall if the referendum doesn’t pass. This referendum is just one option, not the only option."
State Representative Terri Collins (YES) - "I believe the 3 years use of the ATF, the state savings account, will allow us time to make permanent changes in the funding of the General Fund and continue to make improvements in efficiency and effectiveness within government... I voted for this bill in the House and plan to support it in the September 18th election for these reasons."
State Representative Phil Williams (NO) - "I am a NO vote on September 18th because raiding our last solid revenue stream that currently enjoys a positive balance does not solve the greater problem we face as a state. I am a NO because there is no plan to repay the borrowed funds, and the state has a history of borrowing and NOT aggressively repaying incurred debts." (Read the whole thing, Williams provides a lot of information)
What part of the word "balanced" in balanced budget do these people not understand?
If this is "economic hard times" when it is absolutely necessary to tap into this - what happens if the Euro totally crashes and the Fed is out of "stimulus" options???
(Teen daughter)- "DaddY!!! My dress is old and I don't have enough money for Starbucks. Can I P_L_E_A_S_E dip into that money you are saving for my college education?"
Make no mistake, when government wants more money, the FIRST things that are cut are popular programs and ones where people fear the cuts.
I'm of two minds. On the one hand, I do buy into the idea that a lot of worthy programs (Medicaid, etc...), including possibly my own employer, will be greatly hurt. However, this is the gov't the people of Alabama want. It is pointless to push it off (I don't see a large economic change in 3 years) and both the politicians and the people need to be forced to deal with it sooner rather than later. I'm personally voting no, but I understand the rationale for voting yes, since its likely those that immediately pay will be those who can least afford it. But I do agree its to give the legislature political cover and avoid making hard choices and public positions. People need to accept that you can't have the tax structure we have and decent services, so the choices must be made and realities faced.
I'm progressive in my general values on economic policies, but fiscally conservative in the true sense of the word when it comes to budgeting.
This mirrors my thoughts. But I'll go a step further. This bunch swept into the legislature and governor's office (and appeals courts, as some part of this mess will eventually land there) in a landslide in 2010 preaching no new taxes and clamoring to cut all the "waste and fraud", etc. that Dems and lesser GOPers had failed to handle in the past. And now the new bunch fails to handle it. I want them to handle it -- to do what they were elected to do.
There has been some grumbling about the AEA holding up the issue of redesigning the two budgets into one. And I'm sure there is something to that. But the AEA has never been weaker than it is right now, or there would have been more hay made over this. I can't think of any more favorable conditions for a GOP legislature/governor to go conservative with a capital "C". So, what are they waiting for? Are they afraid the AEA is going to back a candidate farther to the right?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
