No one likes to pay taxes, and Bentley and the Republicans who control both the state House and Senate are committed to a “no new taxes” policy. Instead the referendum, if passed, would take $146 million from the Alabama Trust Fund each year for the next three years to shore up the General Fund, which funds all state government operations except education. For fiscal year 2013, which takes effect October 1, is currently a $1.67 billion budget.
The Alabama Trust Fund receives the royalty payments from oil and gas leases in the state, and was recently valued at $2.48 billion. Income from the fund goes to the General Fund, cities and counties and Forever Wild, and a portion of the trust fund can be used as a rainy day account.
To bail out the General Fund this year, more money is needed and that’s what this referendum is about.
The consequences of not passing it are mind-boggling.
The General Fund for this year is already in proration, and a number of state employees have already lost their jobs. State Commissioner of Agriculture and Industries John McMillan reminded Talladega Countians Tuesday that his department lost a fourth of its workforce — going from about 400 to 300 employees — in one fell swoop, and it could get worse.
We’re told state prison budgets could be cut to the point where prisoners would have to be released, and since Medicaid is about as big a part of the state budget as education, the impact on health care providers and nursing homes could be devastating. In a worst case scenario the state could see hospital closures and nursing home patients discharged. Other state agencies could also see very serious cuts in funding.
Tax collections are actually up this year statewide, but over the past few years taxes only accounted for about 37 percent of state revenue. More than half of Alabama’s revenue came from grants and contributions, almost all of it from the federal government, and that’s not filling the gaps as much as it has in the past.
The September referendum appears to be a stop-gap measure, but one that is very serious and deserves voters’ attention this year. A long-term solution is needed, and there doesn’t seem to be any easy answers, or pleasant ones on the horizon.
At this point, a “Yes” vote in September looks like the best we can hope for in the short term.