Looming amendment will be key for several state services

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July 29, 2012

Looming amendment will be key for several state services

By David Palmer The Cullman Times The Cullman Times Sun Jul 29, 2012, 01:08 PM CDT

CULLMAN — One of the key steps of the Alabama Legislature to prop up the General Fund budget is a constitutional amendment that voters must confront on Sept. 18.

The amendment proposes to allow the state to transfer funds from the Alabama Trust Fund to the General Fund, beginning with the 2012-2013 fiscal year and concluding in the 2014-2015 budget years.

Putting the amendment forward to the voters was one of the last acts of the legislature before the regular session drew to a close. Going into the session lawmakers and Gov. Robert Bentley had warned that projected shortfalls in the General Fund could lead to drastic reductions for prisons and medical services for children and the elderly.

The Alabama Trust was created in 1982 under Gov. Fob James, who pitched the idea to voters to create the massive reserve fund, which receives about two-thirds of revenues from offshore oil and gas drilling in Mobile Bay and other coastal areas. The trust fund reached a peak of $3.3 billion in 2007, but has declined to about $2.3 billion because of investment losses and borrowing by state government during the recession.

State Rep. Mac Buttram, R-Cullman, said he has reservations about the constitutional amendment because it was passed without a measure to repay the fund. He said lawmakers are expected to attempt to remedy that shortcoming in the next session.

“This was done late in the session,” Buttram said. “I was not particularly happy with it, but we were facing a situation concerning our prisons and healthcare that is important to so many people.”

Buttram said he is not going to publicly campaign for or against the amendment at this time. He wants to learn more about the chance that a repayment requirement to the fund can be added during the new legislative session.

“If we don’t see the amendment pass, the governor has two options: he can prorate the General Fund or call us into special session to try to find some other revenue. And apparently there is no other revenue,” Buttram said.

State Sen. Paul Bussman, R-Cullman, said he believes the legislature can require a repayment into the fund and that support should be in place to make that happen in the new session.

He also said the governor is not expected to call a special session if the amendment fails on a statewide vote.

“That’s our state’s savings account. It’s supposed to be there as a rainy day fund. But just like a family may need to borrow from its savings during lean times, you pay it back at the appropriate time. That’s what we need to make sure happens, to have that provision in place when we return to session,” Bussman said.

The senator said the prospects of turning loose state inmates and losing health services are troubling, but passage of the amendment would provide vital funding while the state’s economy attempts to regain strength.

“The truth is that we’re in a financial crisis in Alabama,” Bussman said. “If the amendment doesn’t pass there is a likelihood that a large number of state prisoner will be released. That’s not how you want to do it; you want to release them on the appropriate schedules and maintain the checks that go with that system.”

* David Palmer may be contacted at dpalmer@cullmantimes.com or 256-734-2131, ext. 213.

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Looming amendment will be key for several state services

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