Inside the Statehouse

State Revenues Up as Legislature Prepares for Session and Crafting of State Budgets

March 6, 2019

The Governor has been inaugurated and the Legislature has had its organizational session. The quadrennium has begun. Therefore, it is time for our state officials to get to work.

Among the three branches of government, Legislative, Executive and Judicial, our 1901 Alabama Constitution renders our Legislative Branch as the most powerful.

Some of you who witnessed the Wallace Era may disagree and point to the Executive Branch. That was a unique Era. Wallace had basically become “King” of Alabama politics from 1963 through 1986 with a couple of interlopers taking four-year residency in Wallace’s Governor’s Home on Perry Street. They left all of the wheelchair accessibility aspects and Wallace features designed for his paralysis and his cigar smoking bedroom in the Mansion alone. They probably assumed he would return after his constitutionally mandated hiatus. There will never be another politician that will control the reins of state government for five terms like Wallace did. He essentially established himself as “King of Alabama” in pretty much the same way as Franklin Delano Roosevelt did as President from 1932 until his death in 1945. Ironically and coincidentally, both ruled from wheelchairs.

Wallace simply owned the State Legislature. He was like a dictator and legislators were his puppets. As a young legislator, I watched as Wallace’s lieutenants simply sent the Agenda for the day down from the Governor’s office, bypassing the Rules Committee completely. The Governor’s budget became the budget. If there was any pork in the budget, it went to Wallace’s loyal legislators. Thankfully, I represented Wallace’s home county of Barbour.

Therefore, my district was on the pork list. In essence during that 20-year Wallace reign, the Legislature was simply an appendage of the Governor’s office.

That is not the case today. The Legislature has assumed its inherent power. That power is derived from the power of the purse. The Legislature controls the appropriation of the state’s dollars, the ways and means of State Government if you will. It is the most powerful branch because it controls the purse strings. Thus the old political Golden Rule, “Those that control the gold make the rules.”

Governor Kay Ivey and the State Legislature have a golden opportunity to have a successful four years. They are all of the same party and have a close working relationship. As Lt. Governor and presiding officer of the Senate for over six years, Kay built an excellent rapport with the Republican leadership in the State Senate. She understands the workings and machinations of the Legislature and she has built excellent relationships with members of both the House and Senate. She is especially close to the Senate leaders like Del Marsh, Jabo Waggoner and Greg Reed.

The Legislature is overwhelmingly Republican. The Senate has 27 Republicans and only eight Democrats. There is an equally supermajority in the House. The numbers there are 77 to 28.

The Legislature and Governor are also the recipients of outstanding financial news as they begin their first regular legislative session this week. Alabama is seeing the strongest tax growth since the Great Recession a decade ago.

The tax dollars that makeup the Educational Trust Fund have grown by 6.9 percent over 2017. That is a whopping $428 million more dollars to work with in the crafting of the next fiscal year’s budget. The primary sources for funding the Education Budget are income and sales tax. Income taxes, the biggest source of school funding, grew by more than $300 million this past year.

It appears that President Trump and the Republican Congress’ passage of a tax cut package last year has been the stimulus for the growth in revenue for Alabama’s tax coffers. Even the beleaguered General Fund Budget is in better shape than was first thought. Our General Fund reaps its revenues from different taxes and tends to grow much more slowly than the Education Fund revenues. However, it grew by $76 million. This is a 2% gain, which puts the General Fund Projection close to $2 billion.

The good news for Legislators as they prepare the budgets for next year is that both fund’s revenues have exceeded projections.