Holley: State budgets toughest in 30 years

Published 12:24 am Wednesday, July 18, 2012

Formulating this year’s budgets was tougher than that task has been in his 30-something years in the legislature, Sen. Jimmy Holley (R-Elba) told Andalusia Rotarians Tuesday.

Alabama’s 2013 General Fund budget is $190 million less than the 2012 one, while the 2013 Education Trust Fund budget is $100 million less than the current year.

And those numbers will be far worse if Alabama voters don’t approve a Constitutional Amendment during a September special election allowing the state to “borrow” $197 million from the state’s oil and gas lease trust fund to balance the 2013 budget, with an additional $145 million to be taken from that fund in 2014 and again in 2015.

“If it’s disapproved, major cuts will be necessary,” he said.

Holley said that there is no provision for repaying the “loans” from the trust fund.

There is approximately $2.1 billion in the trust fund. Interest from those funds is pledged to state budgets, and low interest rates are affecting revenue the trust fund normally generates.

The legislation is written to automatically put the 2013 General Fund budget in proration if the Constitutional Amendment doesn’t pass, although the governor could call a special session of the legislature and have the 2013 budgets amended.

“We feel like there are no more cuts to be made in the Department of Corrections,” Holley said. “If we do, we are inviting the federal government to take over the prison system.”

He said the state also cannot cut Medicaid, which is funded in part by the General Fund, because so many people depend upon it for health care. Costs are increasing, he said, because of policy changes being made in Washington.

The federal government matches state funds for Medicaid.

The special election to consider the Consitutional Amendment is set for Sept. 18.