The Alabama House of Representatives took the first official steps Thursday to pay back $437 million that it withdrew from the Alabama Trust Fund to balance funding for agencies like Medicaid and the Department of Corrections.
"We promised it would be the first bill passed and we did that today" Rep. Jay Love (R – Montgomery) said. Love sponsored the legislation.
Voters approved tapping the Alabama Trust Fund during a special election in September 18, 2012. House and Senate Republicans crafted the proposed constitutional amendment in the waning hours of the 2012 Regular Session earlier in the year. They neglected to add a pay-back provision.
The Alabama Trust Fund is a massive state savings account that collects royalties from the state's off-shore drilling sources in the Gulf of Mexico. The interest accrued by the ATF is a main source of revenue for the General Fund Budget which is the source of funds for all non-education agencies.
Under the proposal the General Fund would provide payments to the ATF over the next thirteen years, in growing increments each year. The first payment will be $5 million, the second $15 million. The bill stipulates that the entire balance will be settled by September 30, 2026.
"It eases us into it" Love said.
House Democrats proposed their own pay-back bill that Republicans voted down. It would have paid back the ATF over six years with interest.
Democrats accused Republicans of being irresponsible stewards of taxpayer dollars, calling the move to borrow money, the equivalent of using a credit card to keep paying bills the state can't afford.
"You say you have a balanced budget and you tell the taxpayers of this state that we're spending within our means" Rep. John Knight (D – Montgomery) said. "If you borrow money from the trust fund, you're not spending within your means."
Democrats also railed against the notion that Republican leadership in the legislature bragged about bringing conservative spending values to the legislative branch.
Rep. Knight said on the House floor, "In this conservative state, that we want everybody to pay attention to us, we borrow money to pay debt service."
The bill passed by a wide margin. The Senate could approve the bill as early as Thursday of next week. Gov. Robert Bentley pledged to sign the pay-back bill during his State of the State Address and that he expected it to be the first bill passed by both chambers of the legislature.
Copyright 2013 WSFA. All rights reserved.
On Your Side
Weather & Traffic