Last week, Alabama Gov. Kay Ivey unveiled her fiscal year 2024 Education Trust Fund (ETF) and General Fund budget proposals. Two supplemental appropriation bills for the current year were included: $2.8 billion in additional ETF spending and $188.6 million for the general fund budget.
The $3 billion in new 2023 spending represents all of state government’s current record revenue surplus, money that came directly from taxing Alabamians more than necessary to carry out budgeted government activities last year.
The requests, particularly the massive ETF supplemental, raise questions about the priorities targeted by Ivey, as they include more funding for the beleaguered World Games, money to develop the area around a new whitewater rafting park in Montgomery, and additional funds for the Port of Mobile. They also raise questions about whether the spending is appropriate under the guise of “education” and if statewide taxpayers should be paying for projects that would primarily benefit only specific regions of the state. Now the state’s two education budget committee chairmen are joining the questioning.
Not all the spending in the ETF bill is wasteful or unrelated to education. Almost $1 billion is dedicated towards tax rebates for Alabamians, which would come from the ETF surplus revenues. Hundreds of millions of dollars would flow to Alabama’s K-12 schools, community colleges, and higher education institutions, primarily for capital improvement projects.
Are those the best ways to use the surplus? Not in my opinion, but that doesn’t mean they are an improper use of the funds.
Things get more questionable with some of the specific economic development projects Ivey chose. Take the $25 million appropriation to the Montgomery County Commission “for economic development.” As it turns out, the money would specifically be used to redevelop a blighted area near a new whitewater rafting center that the city and county are building. The project also just happens to be $25 million over budget.
You may be wondering how a whitewater park is related to education. There will be “engineering opportunities” for students, Montgomery County Commission chairman Doug Singleton explains. It’s a stretch at best.
A $5 million appropriation for the World Games is also included in the $2.8 billion additional ETF spending, presumably to pay off some of the games’ remaining debt. As of last August, the World Games still owed more than $15 million to vendors and individuals, though the city of Birmingham provided $5 million to reduce that amount. The games did not live up to the financial promises made to Alabamians and taxpayers are now footing the bill.
The supplemental appropriation bill also provides $25 million to the Port of Mobile for economic development and the purchase of coal loading and unloading equipment. Again, how is spending money from an education budget justified on such items? What’s more, the Rebuild Alabama Act of 2019, i.e., the $0.10 gas tax increase, already dedicates $11.7 million in annual revenue to the Port of Mobile. Why are taxpayers expected to contribute another $25 million?
Some of the ETF supplemental proposals have also left top lawmakers stumped.
“You probably have a lot of the same questions we have,” State Rep. Danny Garrett (R-Trussville), chairman of the House education budget committee, told AL.com. Garrett’s counterpart, State Sen. Arthur Orr (R-Decatur), said “there are a myriad of items in there, of which I’m not familiar or aware, I have no knowledge of.”
Orr noted that Ivey had better come clean. Apparently, she consulted neither chairman while developing her request.
Come clean she should. Again, this $2.8 billion ETF supplemental spending bill represents excess money taken directly from Alabamians. If most of the surplus is not getting returned to citizens, it should at least be used for legitimate educational purposes, not for pet economic development projects.
Garrett and Orr will have a chance to put their stamp on the supplemental bill in the coming weeks. They owe it to Alabamians to do better than what the governor presented.
Justin Bogie serves as Fiscal and Budget Reporter for 1819 News. The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to: Commentary@1819News.com.