State Sen. Clyde Chambliss (R-Prattville) joined Mobile radio's FM Talk 106.5 this week to discuss the budgetary challenges facing the state of Alabama and financial strategies for navigating expected difficulties.
"Budgets are always the big issue," Chambliss said on "The Jeff Poor Show." "And you know right now, we're still okay on budgets, but we went through this sugar high, right? And we're coming down off that sugar high."
"Fortunately, it has lingered a little bit longer than I thought it was going to," he continued. "I thought it was going to be a sharp drop off. But due to the deposits that we have, interest rates staying up a little bit, things are okay budget-wise. But due to the deposits that we have, interest rates staying up a little bit, things are okay, budget-wise. I think next year they're going to be pretty rough."
Chambliss explained that the state legislature has been "adamant" about not using "one-time monies" to increase the size of government, while noting that interest on deposits could significantly harm the general fund.
"I won't say that we've done 100% of that, but that's been our goal, and we're right up there and doing that, so things shouldn't be so bad," he outlined. "What is really going to hurt us is the interest on deposits that's become a big portion of the general fund, that's going away as the money is being spent, the ARPA money, all that's going away by the bank anymore."
"But to put this in perspective, in 2014, we had a $250 million hole in the general fund that would equate to a five or $600 million number today, right? We have $150 million in the reserve. So we're still not where I would like us to be, but we're way better off than we've ever been," Chambliss added.
According to Chambliss, the education fund is in a better financial position than others.
"We do have a reserve for the first time in the history of the state of Alabama," acknowledged Chambliss. "We do have $150 million in it. We do have triggers on that that you can't just take that money out. You have to make some hard decisions to take the money out."
The legislator was asked whether a push for gambling in Alabama could occur if state funding improves.
"I would love to tell you no, but I wouldn't be honest if I did," Chambliss admitted. "But from my perspective, we have gambling in a lot of areas of the state, some regulated. We need to deal with it. However, gambling money is one of the worst ways to fund our government."
He added, "So if we get to that point, I'll be looking at key things like, let's put all this money into an account and we'll spend it the year after we collect it, instead of rejecting what we're going to like we do with every other, but let's do this a year in arrears."
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