Email Insights: Sen. Clyde Chambliss proposes budget plan

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After the failed first special session lawmakers are looking to make sure the second on isn’t a failure as well. Here’s a proposal made by Senator Clyde Chambliss this afternoon.

Today, State Senator Clyde Chambliss (R-Prattville) unveiled a comprehensive state budget proposal that will avoid a cut budget for Fiscal Year 2016. Senator Chambliss’ plan also includes long-term, structural reforms to Alabama’s budgeting system that will help stabilize state finances and spur economic growth.

“This plan accomplishes two important goals. It will achieve long-term financial stability for the state of Alabama and solve the budget crisis we face this year,” Chambliss said. “Financial stability will lead to more jobs. Alabama’s GDP growth has lagged behind the national average partly because companies are hesitant to locate to a state where there is a budget crisis every single year.”

Senator Chambliss proposes solving the immediate problem of the FY2016 budget shortfall by moving the entire use tax from the Education Trust Fund to the State General Fund, which would mean an additional $225 million for the SGF budget. It also includes a permanent removal of the sales tax on certain groceries – raw meat, fruit, and vegetables – saving consumers $70 million annually.

To backfill the revenue lost to the ETF, his plan includes new revenue of $226 million to the ETF in the form of taxes on cigarettes, soft drinks, and a change to the business privilege tax. The cigarette and soft drink taxes will immediately sunset after three years to give legislators time to accomplish structural budget reform.

Alabama’s chronic fiscal challenges can be solved by Chambliss’ long-term, four-step plan to modernize the budgeting process:

  • Isolate the budgets in the legislative process by splitting the annual legislative session into two, 60 calendar-day sessions. The first session will be for the budgets only.
  • Study and evaluate the spending ineach government department in detail by breaking the SGF budget into parts that fit the existing committee structure. Each committee would be responsible for specific departments and would make a detailed recommendation of necessary funding levels for each department every year.
  • Transfer the use tax to the SGF budget in FY16 so the SGF has a growth tax. Starting with FY19, each year one-third of the use tax’s obligations currently in the ETF would move to the SGF until all obligations have been transferred.
  • Combine revenues beginning with FY17 by splitting only the growth between the two budgets, with 78% going to the ETF and 22% to the SGF, which is the historical split between the budgets over the past 15 years.

“It is imperative that we modernize our antiquated budgeting system, and requiring legislators to deal first with the budgets means we won’t tiptoe up to the fiscal cliff every year,” remarked Chambliss.

“Providing growth taxes to the General Fund will solve its chronic shortfalls, and revamping our appropriations process will put every state agency under the microscope,” said Chambliss. “If an agency can’t justify every single expense request, there will be cuts in that department to make government more efficient and save taxpayer dollars.”

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