Senators must work together to deal with economic shortfall

Published 10:31 pm Wednesday, March 5, 2008

By By Steve Flowers
We are four weeks into the 2008 Regular Session of the Legislature. The session is one-third of the way through. It has been a relatively quiet session, probably because nothing much has been accomplished. I guess you might say it has been more successful than last year’s considering no senators have slugged each other in the face. However, it has pretty much been the same song second verse.
There is a shutdown in the Senate which is in its second year. The partisan acrimony and stalemate continues to freeze the Senate’s progress towards discussion or action on a myriad of substantive issues. Although this bitter partisan divide exists, historically there is more bipartisan cooperation and harmony when there is a budget shortfall than in years where there is a surplus.
The primary focus of the session is how to deal with an $800 million shortfall in state revenues. The Education Trust Fund for public schools and colleges is down $575 million and the General Fund has about $230 million or 12.6 percent less to spend. The General Fund provides funds for Medicaid, prisons, public safety, and other areas.
Gov. Riley in his State of State address offered budget cuts with no new taxes or fee increases. The Legislature will not enact any tax increases unless Riley proposes or seeks them. Alabama Education Association head, Dr. Paul Hubbert, does not plan to ask for a pay raise for teachers because of the bleak budget outlook.
Hubbert has successfully garnered three straight pay increases for the 95,000 teachers and support workers he represents. Alabama’s public school employees received pay raises of 6 percent in 2005, 5 percent in 2006 and 7 percent last fall. Although AEA will forego a pay hike this year the costs for employees health insurance will increase by almost $60 million for kindergarten through 12th grade as well as two-year colleges and universities.
The General Fund will be bolstered by an influx of funds from royalties from companies pumping natural gas from our offshore oil reserves. These funds go into the Alabama Trust Fund and the interest can be used by the General Fund. The Finance Director will ask to borrow $45 million of interest money. This, coupled with $60 million from a lawsuit settlement from Exxon Mobil, will give the General Fund a $100 million shot in the arm that will help immensely. However, the Medicaid agency needs approximately $150 million more than last year just to maintain its existing programs.
A solution may be in the works to aid the ailing Medicaid agency. Currently there are six gaming facilities in the state that allow electronic bingo. Three of the six are the Indian gaming parlors in Montgomery, Elmore and Escambia counties. These Indian casinos pay no city, county or state taxes. However, three places in Macon, Greene and Lowndes counties have bingo and they do pay taxes. Currently there is a proposal moving through the Legislature to let the people of Alabama vote to expand electronic bingo in Jefferson and Mobile counties. If the proposal were to pass in a statewide referendum it would create $55 million in new revenue for Medicaid. This $55 million could be matched by federal dollars which would bring in a total of $172 million for our state Medicaid budget.
To accomplish this new stream of money all the Legislature must do is vote on whether to allow the people the right to vote. If the Legislature acts on the proposal to allow a vote of the people the constitutional amendment would be voted on the same day as the general and presidential elections on Nov. 4.
Allowing the states two largest counties to have the same privilege as six smaller counties seems like a fair plan. In addition, this privilege would parlay $172 million of new revenue into the state’s beleaguered General Fund. It is obvious to all concerned that the Indian casinos already have an inherent advantage by paying no taxes. It is also apparent that our Mobile facility would capture some patrons headed to the Mississippi coast casinos, which all have this form of bingo. Therefore, this proposal seems like a no-brainer. A current poll indicates that 69 percent of Alabamians approve this measure. Even the Chairman of the Christian Coalition, Dr. Randy Brinson, has endorsed the constitutional amendment. The only opposition to the proposal is coming from a host of high priced lobbyists who have been hired by Indian gambling interests and other entities who are seeking authorization of illegal gambling in places such as Walker County.
See you next week.
Steve Flowers is Alabama’s leading political columnist. His column appears weekly in 70 Alabama newspapers. Steve served 16 years in the State Legislature. He may be reached at

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