By By Connie Nowlin Managing editor
"Alabama demands excellence in only one thing," Gov. Bob Riley said from the stage at Flomaton High School Thursday night. "Who can tell me what it is?"
The crowd of about 300 responded with one voice, 'Football.'
Riley agreed, saying that in pee-wee league to college, every team wanted to go undefeated.
But why was it, he wanted to know, were the people willing to accept being 'close to last in things that are good, and first in things that are bad?'
Then he unrolled his plan, the plan his team and other supporters believe will change all that.
His state finance director, Drayton Nabers, had set the stage for his discussion by addressing arguments made against the plan.
Nabers said the state faces a $675 million shortfall. Part of it is in the general fund, where $222 million of the current budget is from a non-recurring resources, or one-time dollars.
Medicaid, a program that provides health care, nutritional support and day care funding for poor or low income residents, will go up in cost to the state by $50 million next year. Corrections, which Nabers called the cheapest prison system in the nation, must have an additional $50 million or risk being taken over by the federal authorities. Additional, smaller holes in the general fund raise its shortage to $340 million.
In the education fund, past budgets have borrowed $185 million from the Alabama Trust Fund, and benefits for school system employees are going up $150 million.
The shortages in the two funds equal $670 million.
Unlike the federal government, Alabama cannot, by its constitution, operate with a deficit. Each budget must be balanced.
If the shortfall is not made up, the state faces some difficult realities, Nabers said.
"If we do nothing, the constitution requires slashing $340 million from the school fund and $340 from the general fund," Nabers said.
Riley then took the stage. He said he had inherited the problem, that the systems in place no longer worked for Alabama, and the people could either fix it once and for all and move ahead, or put a bandage on the current system and live with mediocrity.
"If we cut $670 million, it will hurt people in ways you can't even imagine. Folks are going to be sent home from nursing homes, state troopers will be cut even further, 6,000 felons will be released from our prisons.
"If we raise just the $675 million, we just maintain the status quo," he said. "Do you want to continue to do what we've done for the last 50 years, or do you want to fix it?" he asked.
He pointed out that North Carolina had made the same type of sweeping change 12 years ago, and now ranks near the top of the nation in education and both economic investment and per capita incomes were on the rise.
"If they can do it, we can do it," Riley said.
He said the proposed amendment creates a third fund, the Alabama Excellence Initiative Fund.
It has almost no earmarks for its money, whereas currently more than 90 percent of dollars are earmarked.
Riley said that allows for flexibility. He recounted a conversation with a school superintendent who told him that he had funds for school bus replacements that he did not need, but no dollars for new math textbooks that he did need.
An additional caveat of the third fund, Riley said, is that if the economy rebounds enough to refill the general fund and the education fund, the Excellence Initiative Fund would either be directed toward improving education further or returned to the taxpayers. Money from that fund is allocated on a one-year basis.
Riley said the new system is more fair to the poor, with income taxes being waived for those who make less than $10,000 per year.
"If you make less, you will pay less," Riley said. "This will move the income tax from regressive to fair. It is immoral to charge someone who earns $4,600 an income tax."
Riley said the changed tax rate would still make Alabama's rate one of the lowest in the nation, moving the state from last to 44th.
He addressed the complaints that he is trying to kill off farming and timber as industries by saying he was reared on a small farm and still raises cattle on a farm today.
He indicated the change in current use taxation would impact less than 2 percent of landowners and that the changes would raise the tax on timberland from $1.25 per acre to $2.50 an acre. The national average is $7.
"They say it will cost Alabama jobs. Where are they going to go? Even with the changes, this is still the lowest tax in the nation," he said.
When it came to questions and answers, the crowd was predominately pro-amendment.
But Flomaton Mayor Kay Wagner was not going to let Riley off the hook.
"We'll work for you, but we are going to hold your feet to the fire. We need $21 million worth of asphalt," she said, referring to completion of the highway construction in the area.
Others wanted to know how small counties would be able to compete for their piece of the pie, since 'pass-through pork' is outlawed in the amendment.
Riley said that the state would take a more active role in economic development in rural counties, using the support plants for the Hyundai manufacturing plant as an example.
"The state should provide a counter balance, do for the small counties what they cannot do for themselves," Riley said.