We urge Alabamians to vote "yes" today on a constitutional amendment transferring money from the Alabama Trust Fund to the General Fund.
The prevalent sentiment among those indicating they will vote "no" is that the Legislature has failed to cut enough from the state budget, and that the amendment's passage will ease the pressure on it to make the hard decisions.
We see two problems with this argument.
First, state budgetary cuts do not take effect immediately. Gov. Robert Bentley says the state already has made cuts that will save the state $674 million annually, but most of these reductions necessarily have a delayed impact. Some additional tightening may be possible — such as consolidation of technology services and police services — but they will involve complex legislation and restructuring. Even when accomplished, the savings will not show up in the budget for several years.
Second, those who want a minimalist state government are ignoring evidence that they already have one. The per-capita tax burden on Alabama residents is 49th in the nation; only South Carolinians pay less.
When an economy struggles with a recession and its aftermath, two things happen to a state budget. One, tax revenue goes down. Two, expenses — especially in Medicaid — go up.
Thus, a state government that is as streamlined as it possibly can be in normal economic conditions necessarily will have a shortfall when the economy turns sour.
Alabama, along with every other state, is in its fourth year of a lousy economy. One-time windfalls, mainly from the federal government, made up for the budget deficits in the previous years. In fiscal 2013, no windfalls are expected.
While many opponents are interpreting the shortfall as evidence that the state is spending beyond its means, a more reasonable interpretation is that it is spending as little as it can, with the least possible tax revenue, during normal economic conditions.
In a surge of anti-government frustration, Alabama voters in 2010 successfully elected candidates who want to minimize the extent to which the state takes care of its own. We think this was a mistake, but we see no evidence that elected officials have broken their promises.
In order to maintain taxes that are near the lowest in the nation, lawmakers need a revenue supplement when the economy falters. The Alabama Trust Fund is the only option available if voters continue to resist tax reform.
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