The reality about budget challenges

Published 11:33 am Tuesday, July 22, 2014

By SLADE BLACKWELL / Guest Columnist

Even with the next legislative session several months away, Alabamians are already hearing rumblings about the state facing significant budgetary challenges next year. While we have time to consider our options, we first need to understand the issues creating the concern.
During the 2009 fiscal year, the state of Alabama transferred $437.4 million from the Rainy Day Account to shore up the Education Trust Fund. While Governor Bentley and Republican Legislators have paid down the majority of that debt, $163 million remains to be repaid by next year.
This should not be confused with the $473.4 million Alabama’s voters approved to shore up the state’s budget in September 2012. That amount is scheduled to repaid by 2026, and Alabama’s cumulative repayment obligation for next year is a comparatively small $15 million.
The hope was that revenues this year would enable the State to reduce the $163 million down to a more manageable $63 million. Unfortunately, revenues are not growing at a pace necessary to make the $35 million budgeted payment plus a conditional $65 million payment if revenues were sufficient.
The bottom line is that the state potentially has millions in debt repayment to address on top of our normal budget obligations.
Adding more tax revenue to an environment with opportunity to improve puts the cost of inefficiency directly on the backs of Alabama’s taxpayers rather requiring those of us in office to make tough decisions.
Right-sizing government is truly a challenge. As any government payroll grows, so do the number of people and organizations with a real interest in maintaining spending to protect their livelihood. We need to be mindful of those realities, but the majority of Alabamians simply do not want to bear the burden of tax increases or be any more beholden to the Federal government for financial support.
If we are going to build a government in Alabama that effectively meets the needs of our citizens while continuing to keep taxes low, we have some real challenges ahead of us, but I believe we are up to that task.