Legislators talk state budget, constitutional amendments at chamber luncheon

State Senator Jabo Waggoner and Representative David Faulkner gave their annual legislative update at the Homewood Chamber of Commerce luncheon on Sept. 20.

The discussion centered on the state’s budget for the 2017 fiscal year, upcoming constitutional amendments and proposals and questions from the audience. Faulkner noted that his priorities for his district are promoting education and a business-friendly climate.

“Jabo and I want to make it easier for businesses that are here to do business,” Faulkner said.

The 2017 state budget totals $11.93 billion, including $1.85 billion in the general fund, which covers everything from law enforcement and public health to legislative functions, and $6.32 billion in the Education Trust Fund. Increased revenue from sales, income and use tax has made the education budget larger than it has been ever before, Faulkner said, enabling a 4 percent cost-of-living raise for teachers.

On the other hand, revenue for the general fund is relatively flat and Faulkner said Medicaid and prison costs are now taking an estimated 65 percent of the general fund.

“How do we keep up when we have no growth money going in?” Faulkner said.

The recent $1 billion BP settlement enabled the state to cover Medicaid costs as well as road improvements in coastal counties and paying off some of the state’s debt. However, Waggoner pointed out that the settlement is a one-time deal, paid out over 18 years, and is not a long term solution to the roughly $700 million operating cost of Medicaid in the state.

“It is very, very expensive,” Waggoner said.

The estimated 25,000 inmates in the state, and their aging prison facilities, are another challenge to funding, Waggoner said, adding that the Department of Corrections commissioner has proposed borrowing $800 million in bond issue to build four new prisons in the state.

Waggoner and Faulkner also encouraged the chamber audience to vote ‘Yes’ on Amendment 14 in November. The amendment, Waggoner said, is a response to a recent Jefferson County judge’s ruling that more than 600 local bills were passed by the state using an unconstitutional manner of counting votes. The constitutional amendment would prevent those bills, many of which were passed years ago, from being declared unconstitutional.

If that happened, Waggoner said, the impact would be wide-reaching, from Birmingham Jefferson Convention Complex funding to Homewood city annexations and state sales tax allocations for Homewood schools.

“All I can say is this community and everybody in this state needs to vote ‘Yes’ on this amendment,” Waggoner said. “It’s huge for this county.”

The two legislators also took questions from the audience about other issues of concern, one of which was the historic building tax credit under discussion. Waggoner was one of the sponsors for the bill in the last session and he said a third-party study of all of Alabama’s tax credits is currently underway. Once that is complete, he expects the tax credit to be re-introduced, and likely passed, in the next regular session.

Waggoner also said the state is continuing to look at enforcing a sales tax for online retailers, adding that Amazon is on board and could bring around $12 million in new revenue to the state. A proposed lottery, which failed in the most recent session, could bring an estimated $225-300 million in its first year depending on which types of lottery, such as scratch tickets or Powerball, were introduced, Faulkner said. He added that most states see a decline in revenue after the first year, and that this year’s bill failed in part because it was missing important information needed to make a decision.

“You see a bounce at the beginning when the state first gets it, then it goes down,” Faulkner said.

After an audience member asked about raising the gas tax specifically to add more lanes to I-65 between Birmingham and Montgomery, Waggoner said there has been discussion at the state level to increase the tax not only for roads but for the roughly 500 bridges in Alabama that don’t meet safety codes, and other infrastructure needs.

The state legislature will reconvene in February 2017.

The chamber luncheon was sponsored by Southland International Trucks, which is headquartered in Homewood, and included a visit by Tom Hale of the Homewood Police Department Foundation and Banjo, one of the department’s K-9 officers. Hale was there to talk about the Foundation’s work and its upcoming fundraiser.

The 2016 Guardians Luncheon will be Oct. 25 from 11:30 a.m. to 1:30 p.m. at Rosewood Hall. The luncheon’s special guest is Rick Burgess from the “Rick and Bubba” radio show, and there will also be a raffle and color guard presentation. Contact the Foundation at 332-6227 or homewoodpolicefoundation@charter.net for more information.