State Sen. Slade Blackwell, R-Birmingham, held a town hall meeting to discuss the Sept. 18 referendum in Wilsonville Sept. 12 (Reporter photo/Christine Boatwright)

Archived Story

Blackwell addresses Sept. 18 referendum

Published 11:05am Wednesday, September 12, 2012

By CHRISTINE BOATWRIGHT / Staff Writer

WILSONVILLE – About 30 residents filled Wilsonville Town Hall during a community meeting held by state Sen. Slade Blackwell, R-Birmingham, Sept. 12.

Blackwell explained pros and cons of the Sept. 18 referendum, which would allow the state to take $437 million from the Alabama Trust Fund during the next three years to support the state’s diminished general fund budget.

Blackwell said the vote would not affect the Education Trust Fund, as the general fund is a separate budget. The Education Trust Fund did, however, borrow about $450 million from the Alabama Trust Fund previously to fund the rainy day trust fund.

Created in 1982, the Alabama Trust Fund is funded by taxes collected from the state’s oil and gas production. In 2008, the fund had about $3.2 billion, but the amount diminished to $2.3 billion in 2011 due to decreased interest rates and the money withdrawn to fund the Education Trust Fund’s rainy day fund, Blackwell said.

Voting “yes” to the referendum would allow the state to take about a fifth of the Alabama Trust Fund to fund the general budget.

Blackwell said the “pros” of the referendum are as follows: The state is using its own money from a “savings account;” Medicaid and corrections, which account for about 60 percent of the general budget, would be “taken care of;” and the budget would be balanced.

As for “cons,” Blackwell said the decision is only a “short-term fix” for the next three years.

“If in three years we still have a down economy, what are we going to do?” Blackwell said.

Additionally, the referendum does not require a repayment of the funds to the Alabama Trust Fund, Blackwell said.

If Alabama residents vote no, the legislator must “find another way to come up with the money,” Blackwell said. “The government will call a special session to talk about the general fund, but this doesn’t affect the education fund.”

Blackwell also said if the referendum fails, Gov. Robert Bentley could issue a proration order, which would take 10 percent of the budgets of all state agencies.

When asked how he would vote, Blackwell said he is struggling with the question because, “if you don’t do this, what’s the answer?”

  • Zakkath

    A “trust fund” is not a “savings account”. The trust fund is capital set aside to provide recurring income for the state for our children and grandchildren. It is not a savings account from which we borrow and return monies.

    In addition, Montgomery already raided the trust fund before and those monies were NOT REPAID. There is no reason to believe that this instance would be any different. Montgomery can continue with “short-term” fixes until all of the money is spent, and Alabamians will have nothing to show for it.

    I would also point out that a budget is not “balanced” if you have to borrow money in order to even out the books. Budgets are balanced when your expenditures are equal to your income. Use the interest income earned by the Trust Fund as that is why it exists, but borrowing has to stop, and we need a true balanced budget. Continuing to repeatedly borrow our way into the future is only ensuring that we are destroying Alabama’s future for our children and grandchildren.

    The real kicker is that this bill contains no requirement to repay the “borrowed” funds. In my opinion this bill is as ill-conceived as the recent piece of legislation which monkeyed around with the school calendar taking no consideration of what was best for our children’s educational needs. I’m starting to wonder what sort of cool-aid they are serving at the state house in Montgomery.

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