A few nights ago I watched in tense disbelief as a man jumped from an airplane at 25,000 feet without a parachute! As an Army Paratrooper, I never exited a plane without both a main chute and a reserve. This man jumped from almost five miles high into a net without either. It was an incredible feat of skill and daring with no chance of a do-over. The jumper had to get it right the first time. Let me use that as an analogy to discuss the coming special session of the Alabama Legislature: we need to come in the door of the Statehouse and stick the landing. Let’s nail the net the first time.
Our state is one of only three in the nation that bears the self-imposed load of having two budgets (Education and General). Every year we find ourselves in the throes of an annual political Kabuki dance called budget negotiations that usually involve the tense discussions of surplus funds in the Education budget versus shortfalls in the General Fund.
By law, nearly all of the growth revenues that go up with a good economy benefit only the Education budget, while generally flat revenues go to the General Fund. Too often, the General Fund is like Oliver Twist, an orphan child forced to beg for more or go hungry. Yet, I recognize the valid concern that if the budgets were combined, the two runaway expenditures in the General Fund (Medicaid and Corrections) could eat education alive.
It does not need to be this way. Each budget is vital to our state’s interests. Public education is the backbone of our economy and a vital link between Alabamians being free of dependency on the state and able to thrive in the workforce. Likewise, the General Fund supports vital services like State Troopers, Mental Health, Medicaid, Prisons, the National Guard, and thousands of state employees. Neither budget can survive in a state that does not care for both.
I recently met with the leadership of both the House and the Senate to propose what I simply call “the Two-Step Plan”. This plan combines fiscal reform with the potential for increased revenues gained by a lottery. And the entire plan engages the people of this great state by giving them the final say in the form of a vote.
To be clear, I have never been a fan of lotteries. I don’t think it is wise stewardship to see games of chance as an all-encompassing solution to our budget woes. But if a solid lottery bill came before me that was tightly governed, expressly disallowed the expansion of casino gaming, benefited the General Fund, and was voted on by the people, then I would not work against it. I am a fiscal hawk, and firmly believe that we must fix the broken manner in which revenues are distributed within our multi-budget structure.
The Two-Step plan proposes to pass separate but linked pieces of legislation. The first is a version of what was proposed by my colleague Senator Paul Sanford during the 2015 Regular Session that establishes one fund into which all revenues are deposited. From that fund the revenues would be allocated to the two budgets, 76% to the Education Trust Fund and 24% to the General Fund. The second bill would be a lottery whose revenues are collected and deposited into the same fund and divided in a like manner. Each of the two bills must first pass the Legislature, and then both must also pass a majority vote of the people. If one bill fails, they both fail. Those who want fiscal reform must engage the lottery issue, and those who advocate for a lottery must accept long-term budget reform. In the end, the people of this State will decide the ultimate outcome.
Budget analysts have indicated that enactment of the Two-Step Plan could see a net increase of over $200 million to the General Fund and almost $100 million to the Education Trust Fund. At that point, discussions of moving revenues between the budgets would be unnecessary. Likewise, any concerns that purists have of a future consolidation of the two budgets would also be over.
As the Chair of the Senate Committee on Fiscal Responsibility, I believe that this plan is very doable. It allows everyone to have a say in the process, achieves true budget reform, and ends the lottery debate forever. If this budget plan fails at the polls, then the people will have spoken, and we will return to austerity measures and face the inevitable debate of future taxes. This proposal is bold, audacious, and its time has come. The special session is upon us. Let’s stick the landing!
Phil Williams represents Etowah, Cherokee, Dekalb and St. Clair counties in the Alabama Senate. Follow him on Twitter for the latest legislative updates: @SenPhilWilliams.