WEBVTT

NOTE Trapped in Fiscal Fantasy: The Alabama State Government Budget

1
00:00:00.000 --> 00:00:12.000
The website you see plugged here, I'm just going to start with a quick plug to it, that's a brand new website, started in December and it's nothing more than a collection of political news, political opinions from around the state, state politics.

2
00:00:12.000 --> 00:00:26.000
It's a good place to go find information, after I put it together I found myself using the links on it to go look at Allison and a bunch of other things, you know, my book market, I can just go out to this one and use it.

3
00:00:26.000 --> 00:00:31.000
Well, you may not know it, but there's this horrible creature that haunts the Alabama countryside.

4
00:00:31.000 --> 00:00:38.000
It's got long fangs, it's got sharp claws, and it's got a ravenous hunger.

5
00:00:38.000 --> 00:00:44.000
Left unchecked, it will destroy our prisons and it will allow violent criminals to wander our streets freely.

6
00:00:44.000 --> 00:00:48.000
It will deny medical treatment to thousands of Medicaid recipients.

7
00:00:48.000 --> 00:00:51.000
It will oppress our children in the tyranny of illiteracy,

8
00:00:51.000 --> 00:00:55.000
and it will allow corrupt officials to cheat and steal without limits.

9
00:00:55.000 --> 00:01:01.760
This evil creature is the budget shortfall beast.

10
00:01:01.760 --> 00:01:05.880
Now I know the rhetoric is a little much and it's a little tongue-in-cheek even, but that's

11
00:01:05.880 --> 00:01:12.120
the kind of thing you can expect to hear and a lot of people believe it, that kind of prediction

12
00:01:12.120 --> 00:01:16.880
because we hear it all the time.

13
00:01:16.880 --> 00:01:21.760
Every year we hear that we're going to have a budget shortfall or proration or massive

14
00:01:21.760 --> 00:01:23.040
spending cuts.

15
00:01:23.040 --> 00:01:30.440
Every single year there is not a single budget year that goes by without it, without these claims.

16
00:01:30.440 --> 00:01:33.280
Most agencies go along with that.

17
00:01:33.280 --> 00:01:37.880
As they make their requests for money, they also tell you all the bad things that are going to happen.

18
00:01:37.880 --> 00:01:41.360
For example, I'll give you one example in the current budget year.

19
00:01:41.360 --> 00:01:45.920
The Ethics Commission says that without a 20% increase in funding, they will not be

20
00:01:45.920 --> 00:01:49.040
able to maintain their current workload.

21
00:01:49.040 --> 00:01:50.740
Let me rephrase that a little bit.

22
00:01:50.740 --> 00:01:56.900
If you only increase our funding by 19%, we're going to do less work than we did yesterday.

23
00:01:56.900 --> 00:01:59.900
These are the kind of things that you hear.

24
00:01:59.900 --> 00:02:01.340
It's very common.

25
00:02:01.340 --> 00:02:06.180
So what we need to do is we need to look at these things a lot critically.

26
00:02:06.180 --> 00:02:08.780
Do you all remember the $1.2 billion tax increase?

27
00:02:08.780 --> 00:02:12.180
Do you all remember the claims about it?

28
00:02:12.180 --> 00:02:14.260
School systems will go bankrupt and then close.

29
00:02:14.260 --> 00:02:16.700
We'd lose sports programs.

30
00:02:16.700 --> 00:02:19.460
Violent prisoners would wander the streets because we couldn't have any place to keep

31
00:02:19.460 --> 00:02:20.460
them.

32
00:02:20.460 --> 00:02:30.660
What would happen if we didn't pass the tax? Well, we didn't pass the tax, and none of

33
00:02:30.660 --> 00:02:34.060
them happened. These are the kind of claims that we have to really look at. When they

34
00:02:34.060 --> 00:02:38.020
start telling you the doom and gloom, we've got to look at it real close. Let's start

35
00:02:38.020 --> 00:02:42.380
by looking at the claims behind the shortfall. What are the claims being made? Well, first

36
00:02:42.380 --> 00:02:48.180
off, we have a $250 million shortfall in our budget. This, of course, ignores the $500

37
00:03:18.180 --> 00:03:34.180
So what's our solution? Well, we either have to cut spending and then there's the horrible consequences about people without Medicaid will lose matching Federal funds and everything else, or we have to raise taxes, which is of course every legislator's favorite topic.

38
00:03:34.180 --> 00:03:47.180
And the one thing again I want to reiterate is that the legislature has claimed shortfalls for at least the past five years. Now, I only go back five years because that's as far as my memory goes. I don't remember what happened in the mid-90s.

39
00:03:47.180 --> 00:03:55.180
I'm pretty sure they did then too, but since I can't prove it, I'm not going to claim it.

40
00:03:55.180 --> 00:04:00.180
But that's what the thing looks like.

41
00:04:00.180 --> 00:04:06.180
I always think it's a good idea when people talk about a shortfall.

42
00:04:06.180 --> 00:04:09.180
There's two sides to a budget. Budget is an equation.

43
00:04:09.180 --> 00:04:14.180
There's two sides to that equation. There's the spending and there's the income.

44
00:04:14.180 --> 00:04:17.660
They're all saying that the shortfall is a shortfall in income.

45
00:04:17.660 --> 00:04:21.860
The equation is unbalanced because of too little money.

46
00:04:21.860 --> 00:04:25.380
But it's also possibly unbalanced if there's too much spending.

47
00:04:25.380 --> 00:04:30.520
And so we have to look and see if that's the kind of thing that's happening.

48
00:04:30.520 --> 00:04:35.180
This chart was pulled from the budget documents available online at the Executive Budget Office

49
00:04:35.180 --> 00:04:41.060
and it shows the Alabama spending since the year 2000.

50
00:04:41.060 --> 00:04:44.700
And you can see that we've had steady increases in spending.

51
00:04:44.700 --> 00:04:50.060
As a matter of fact, the state budget has increased by an average of 6.2% a year or

52
00:04:50.060 --> 00:04:54.220
$982 million since 1999.

53
00:04:54.220 --> 00:04:59.500
Now, you remember last year, the last budget, the governor said, we've cut everything to

54
00:04:59.500 --> 00:05:00.580
the bone.

55
00:05:00.580 --> 00:05:06.020
And you've heard legislators say it this year, we're cut to the bone, we can't cut anymore.

56
00:05:06.020 --> 00:05:09.180
Does that look like bone or fat?

57
00:05:09.180 --> 00:05:10.180
That's a lot of money.

58
00:05:10.180 --> 00:05:20.180
And you can see some years are better than others. 2004 was probably the smallest. It's $710 million, only $710 million.

59
00:05:20.180 --> 00:05:32.180
But 2003 was $1400 million, $1.4 billion increase in spending. That's a lot of money.

60
00:05:32.180 --> 00:05:38.180
If you go back to 1999, you'll see that we have increased by almost $6 billion a year.

61
00:05:38.180 --> 00:05:42.220
43% increase in spending since 1999.

62
00:05:42.220 --> 00:05:43.980
It's what, five, six years ago?

63
00:05:44.860 --> 00:05:45.920
That's a lot of money.

64
00:05:45.920 --> 00:05:47.240
That is a lot of money.

65
00:05:48.780 --> 00:05:50.820
Judging from this, we can't tell if there's

66
00:05:50.820 --> 00:05:52.700
excessive spending, but we can sure tell

67
00:05:52.700 --> 00:05:54.100
that there has been spending.

68
00:05:55.460 --> 00:05:59.020
And it does tend to hint that spending

69
00:05:59.020 --> 00:06:00.520
might be part of the problem.

70
00:06:06.500 --> 00:06:08.000
This is a total number.

71
00:06:08.180 --> 00:06:26.180
This is a total number. I could have broken it down by Education Trust Fund and General Fund and in fact I do have those figures broken down that way on politicsalabama.org and you'll find that they do, both of the funds increase steadily over the years.

72
00:06:26.180 --> 00:06:38.180
It toggles some years one way, some years the other. Two years ago, the General Fund grew a lot faster than the Education Trust Fund did.

73
00:06:38.180 --> 00:06:45.180
This year, there's no comparison. The Education Trust Fund is 10 times, you know, growing 10 times as fast as the General Fund.

74
00:06:45.180 --> 00:06:52.180
And I want to thank the Governor, by the way, for coming out with his budget last night, so I had time to incorporate it.

75
00:06:52.180 --> 00:07:22.180
The agencies have requested their money. Medicaid agency wants $127 million more, the Department of Public Health wants $48 million more, the Department of Human Resources wants $47 million more. The Department of Corrections is my favorite because they want to double their budget. That is literally double their budget. It's 100% increase in funding. It doesn't take much.

76
00:07:22.180 --> 00:07:29.180
The projection is we're going to have between 5 and 7 percent more revenue in the next budget year as we had this year.

77
00:07:29.180 --> 00:07:39.180
It doesn't take much intelligence to say, let's split the difference, with a 6 percent projected increase in funding, we can't afford 100 percent increases in spending.

78
00:07:39.180 --> 00:07:45.180
But you'll see agencies all throughout the budget requesting 20, 40, 50 percent.

79
00:07:45.180 --> 00:07:51.180
It just so happens that the Department of Corrections is the worst offender at 100 percent, but they're not the only ones.

80
00:07:51.180 --> 00:07:58.180
More evidence to show that, yeah, it could be overspending that's causing this budget problem that we're having.

81
00:07:58.180 --> 00:08:02.180
Well, the governor's come out with his proposed budget.

82
00:08:02.180 --> 00:08:09.180
And you'll see $10.2 billion for the general fund, $10.3 billion for the education trust fund.

83
00:08:09.180 --> 00:08:12.180
We broke $20 billion, ladies and gentlemen.

84
00:08:12.180 --> 00:08:18.180
That's a target we've been shooting at for years, but we broke $20 billion.

85
00:08:18.180 --> 00:08:24.180
Only a $174 million increase for General Fund. Wait a minute, I thought we had $250 million too little.

86
00:08:25.180 --> 00:08:29.180
But without a tax increase, he managed to find $174 million more.

87
00:08:35.180 --> 00:08:39.180
Remember, we're going to answer the question at the end, is the budget shortfall factor myth?

88
00:08:40.180 --> 00:08:42.180
I could stop now, but I won't.

89
00:08:43.180 --> 00:08:46.180
The Education Trust Fund got almost a billion dollars more.

90
00:08:46.180 --> 00:08:55.180
In his suggested budget, now this isn't what the legislature is going to pass, this is what he is presenting for them to build off of.

91
00:08:55.180 --> 00:09:03.180
Our total spending is more than 20 billion dollars. That's a 1.1 billion dollar increase, almost 1.2.

92
00:09:03.180 --> 00:09:15.180
And as I was telling Don Markwell, who is on WACV 1170, as a talk show host, I think the governor was thinking of him

93
00:09:15.180 --> 00:09:19.180
because he proposed an $11.70 million increase in spending.

94
00:09:22.180 --> 00:09:29.180
6% increase in spending, which is pretty much what the projections were for increase in funding.

95
00:09:29.180 --> 00:09:34.180
They projected between 5% and 7% increase in funding, pretty good.

96
00:09:37.180 --> 00:09:43.180
That's a lot of information, so let's look at this a little bit.

97
00:09:43.180 --> 00:09:51.180
A budget shortfall, as I said earlier, can be caused, like this is going to be a short presentation, the topic is not that complicated when you look at it.

98
00:09:51.180 --> 00:09:57.180
The newspapers and the politicians like to make it complicated, but it's just not that complicated.

99
00:09:57.180 --> 00:10:03.180
A budget shortfall can be caused by one of two things, too little money, too much spending.

100
00:10:03.180 --> 00:10:05.180
There have been claims that we had too little money.

101
00:10:05.180 --> 00:10:11.180
Well, the governor managed a $174 million spending increase in the general fund with no tax increases.

102
00:10:11.180 --> 00:10:18.340
The money was there. That's what that says. The money was there. The claims were false. They had to be.

103
00:10:18.340 --> 00:10:23.980
Both the General Fund and the Education Trust Fund show a spending increase.

104
00:10:23.980 --> 00:10:31.180
And you can see the General Fund is increasing by 1.7 percent, the education by 10.6.

105
00:10:31.180 --> 00:10:38.900
Dramatic growth in the Education Trust Fund, little growth in the General Fund, but they're both increasing.

106
00:10:38.900 --> 00:10:42.900
I think we can answer the question now. Budget shortfall, fact or myth?

107
00:10:42.900 --> 00:10:47.900
It's a myth. Yes, absolutely. There's no question about it.

108
00:10:47.900 --> 00:10:52.900
It's not caused by inadequate revenue, and to be honest, it's not caused by excessive spending.

109
00:10:52.900 --> 00:10:57.900
It just isn't there. There is no budget shortfall.

110
00:10:57.900 --> 00:11:02.900
It'd be real easy to live within it. You can't say there's a budget shortfall

111
00:11:02.900 --> 00:11:07.900
when you're spending an extra $1.1 billion this year. There's no budget shortfall.

112
00:11:07.900 --> 00:11:37.900
In my honest opinion, when you hear about budget shortfalls, when you hear about prorations, when you hear about all the horrible things, these are just tactics, political tactics, for no other reason than to create a panic, to create a crisis that the public can get behind and say, you're right, it's something that needs to be fixed, to justify their need for the extra money, and that's about all it is.

113
00:11:37.900 --> 00:11:44.900
Math, and if the budget continues to increase at the current rate, 6.2%, we'll break the

114
00:11:44.900 --> 00:11:52.140
$30 billion mark in five years. Five years. It took us a decade to get from 10 to 20.

115
00:11:52.140 --> 00:12:03.340
It's going to take us five years to get from 20 to 30. Told you it was a short one. The

116
00:12:03.340 --> 00:12:05.620
The budget shortfall doesn't exist.

117
00:12:05.620 --> 00:12:13.540
You can see from the charts that the problem may not be excessive spending this year.

118
00:12:13.540 --> 00:12:17.820
Probably was excessive spending on a long-term basis.

119
00:12:17.820 --> 00:12:33.820
Q. Since you brought out the credit key, or the proration, the quote from Alabama, you just say it, by bringing it across in front of the vampire, I think it's actually a badge of honor for Alabama, right?

120
00:12:33.820 --> 00:13:03.740
It's the real world. It's how every Alabama family lives with proration. You come up and you find, oops, we used a little too much electricity this month. It's an extra 50 bucks. We'll just cut off two nights out at the restaurants this month.

121
00:13:03.740 --> 00:13:08.740
You spent more money in one area? Guess what? That's proration. So you cut it elsewhere.

122
00:13:08.740 --> 00:13:12.740
That's the way Alabama families live every day. That's the way the state government should live.

123
00:13:12.740 --> 00:13:15.740
And it's not a bad thing. It's a good thing.

124
00:13:33.740 --> 00:13:54.740
Absolutely, and you'll see that a lot. When the budget hits the desk, the news media treats that as what the state government needs, must have, to function in the coming year.

125
00:13:54.740 --> 00:14:02.740
Well, it's not that. It's a request for spending increase. The Department of Corrections asked for $266 million. Where is it?

126
00:14:02.740 --> 00:14:10.740
There it is. They got three. They'll live. They won't be able to build the two prisons they wanted. They won't be able to do a lot of things they wanted to do.

127
00:14:10.740 --> 00:14:18.740
But they'll survive. They'll continue. They got an additional $3 million in the governor's proposed budget. I don't think that will survive the legislature, by the way.

128
00:14:18.740 --> 00:14:46.740
Budget shortfall. Well, again, I still say there is no budget shortfall. If there was an actual budget shortfall, you would spend $250 million less than the general fund than we did last year, and we're not. We're spending $174 million more. So there is no budget shortfall. It's a myth. It's a complete manufactured thing to put pressure on us to approve tax increases. That's it.

129
00:14:48.740 --> 00:15:00.460
There were some of those. I saw the breakdown last night. There were some of those. But

130
00:15:00.460 --> 00:15:08.180
there was another $140-some-odd million, which had nothing to do with federal mandates, had

131
00:15:08.180 --> 00:15:12.740
to do with opening a new building they wanted to open and some other things. It had nothing

132
00:15:12.740 --> 00:15:16.660
to do with federal mandates. Some of it did, yes. But again, they got something that sounds

133
00:15:16.660 --> 00:15:21.340
is good. They got a nice looking peg they can hang the hat on. Unfunded mandates. Yes,

134
00:15:21.340 --> 00:15:26.460
they did have some of that. There's the peg. We got $100 million in unfunded mandates.

135
00:15:26.460 --> 00:15:32.700
We can hang up there a $266 million request for spending, for funding increase. Nice peg,

136
00:15:32.700 --> 00:15:37.700
isn't it? It's hard to argue with Medicaid and unfunded mandates. If they're talking

137
00:15:37.700 --> 00:15:41.580
about the Sports Hall of Fame, we're going to double the budget for the Sports Hall.

138
00:15:41.580 --> 00:15:46.380
That's an easy target, you know. You're going to double the budget for what? But for Medicaid,

139
00:15:46.380 --> 00:15:55.380
It's hard to argue against the Medicaid increase, you know, people look at you like you're some kind of a monster, they eat babies, you know, you're that.

140
00:15:57.380 --> 00:15:58.380
Yes sir?

141
00:16:07.380 --> 00:16:09.380
Excellent question and not one I have the answer to.

142
00:16:16.380 --> 00:16:25.620
and well I'm sure there's some of that in there I don't have the answer that

143
00:16:25.620 --> 00:16:28.620
question there's a lot of state agencies and I just haven't gone to look to see

144
00:16:28.620 --> 00:16:31.780
which are appointed and which are merit rate and all that kind of stuff so I

145
00:16:31.780 --> 00:16:33.780
I don't know the answer.

146
00:17:01.780 --> 00:17:25.900
Well, now keep in mind, they requested $266 million, they only got $3 million, so that's

147
00:17:25.900 --> 00:17:30.380
not a huge increase in their budget, and I don't know what the politics are behind it,

148
00:17:30.380 --> 00:17:31.380
unfortunately.

149
00:17:31.380 --> 00:17:50.000
But we've got a private prison being built here in the state and the state government

150
00:17:50.000 --> 00:17:51.380
has said we will not use it.

151
00:17:51.380 --> 00:17:54.740
I think there's even a state law that says they can't, which can be changed this legislative

152
00:17:54.740 --> 00:17:55.740
session.

153
00:17:55.740 --> 00:17:57.740
Does this say, I don't know, people go to the budget?

154
00:17:57.740 --> 00:17:59.740
Is it the Barclay Correctional, number one,

155
00:17:59.740 --> 00:18:02.740
who are asking for more money than anybody else would?

156
00:18:02.740 --> 00:18:04.740
Actually, Medicaid is the biggie.

157
00:18:04.740 --> 00:18:11.740
It takes, what was the figure, I think, 34 or 35% of the general fund budget.

158
00:18:11.740 --> 00:18:15.740
And I think it's somewhere in the neighborhood of, hmm?

159
00:18:15.740 --> 00:18:19.740
Oh, oh, I thought you were disagreeing with me.

160
00:18:19.740 --> 00:18:23.740
And I think it takes somewhere in the neighborhood of 18 or 19% of the total state spending.

161
00:18:23.740 --> 00:18:26.980
What a huge chunk, just for one department, you know.

162
00:18:26.980 --> 00:18:30.540
But that's where I think that is the biggest agency.

163
00:18:30.540 --> 00:18:41.540
After that would probably have to be the schools, I'm guessing, the K through 12.

164
00:18:41.540 --> 00:18:46.820
A hundred percent increase in funding is always out of proportion.

165
00:18:46.820 --> 00:18:51.200
I don't care what agency you are, you know, doubling your budget in one year, that's always

166
00:18:51.200 --> 00:19:21.200
with Medicaid, they're actually pretty good at the budgetary shuffle themselves, I found this when I was working with the governor, the particularly amazing, what we do in the state of Alabama, you know, the Medicaid, the state has to match the spending by the federal government, and 90% of it comes from the federal government or something to that effect, and Alabama has to match the spending by the federal government, and 90% of it comes from the federal government or something to that effect,

167
00:19:51.200 --> 00:19:57.200
1500 or 2500 a bed?

168
00:19:57.200 --> 00:20:11.200
Isn't it lovely?

169
00:20:11.200 --> 00:20:36.200
I'm just curious, I mean, in different states tax different things, so you're going to visit Florida, and it's also secure to have a lot of tax exemptions for Florida taxing. And then, I'm not going to get into that, but it's just like the opposite person, how do they arrive at having to get into tax exemptions?

170
00:20:41.200 --> 00:20:48.320
There's a 10-cent tax on a deck of playing cards. I'm not kidding. There used to be something

171
00:20:48.320 --> 00:20:52.600
to fight gambling with. Obviously, a deck of playing cards isn't the big gambling demon

172
00:20:52.600 --> 00:20:56.400
anymore, so they don't use it for that, but it goes right into the general fund and have

173
00:20:56.400 --> 00:20:59.880
fun with it. But they'll tax anything they can get. There's a bill in front of the legislature

174
00:20:59.880 --> 00:21:07.880
right now that will actually not allow us to deduct our federal income tax from our

175
00:21:07.880 --> 00:21:09.080
and our state income tax.

176
00:21:09.080 --> 00:21:13.360
So that money we pay to the feds, we have to have that taxed and pay state taxes on

177
00:21:13.360 --> 00:21:14.360
it.

178
00:21:14.360 --> 00:21:15.360
Isn't that wonderful?

179
00:21:15.360 --> 00:21:18.160
You know, and these are the kind of things they do, you know, and they're talking now

180
00:21:18.160 --> 00:21:25.240
about what, a five percent tax on, or a nickel tax on soft drinks, or actually any bottled

181
00:21:25.240 --> 00:21:26.240
drink.

182
00:21:26.240 --> 00:21:29.600
So, you know, they'll tax anything they get their hands on, it has nothing to do with

183
00:21:29.600 --> 00:21:33.600
fiscal responsibility or what they need, it has to do with what they can get away with,

184
00:21:33.600 --> 00:21:34.600
you know.

185
00:21:34.600 --> 00:21:36.520
And that's exactly what we're looking at here.

186
00:21:36.520 --> 00:21:40.120
And that's what this whole thing with this budget shortfall is, you know, if the governor

187
00:21:40.120 --> 00:21:43.800
says we're not going to do taxes, you know, well, Hubbard, Paul Hubbard is complaining

188
00:21:43.800 --> 00:21:47.460
about almost every single thing the governor has proposed.

189
00:21:47.460 --> 00:21:52.440
And if Paul Hubbard gets his way, which he's got a lot of clout, then, you know, there's

190
00:21:52.440 --> 00:21:57.560
very little that the legislature is going to be able to do except raise taxes.

191
00:21:57.560 --> 00:22:01.980
The, you know, again, not because they need to spend the money, but because they want

192
00:22:01.980 --> 00:22:03.280
to spend the money.

193
00:22:03.280 --> 00:22:09.040
I don't think anybody that I've ever met can look at this kind of a spending increase in

194
00:22:09.040 --> 00:22:17.920
one year and say it's justified, you know, that's almost a $1.2 billion spending increase.

195
00:22:17.920 --> 00:22:24.440
And if you look at the year that the governor presented his $1.2 billion tax increase proposal,

196
00:22:24.440 --> 00:22:31.400
said we've got to spend this extra $1.2 billion, how much did our spending go up?

197
00:22:31.400 --> 00:22:33.040
A pretty good amount, right.

198
00:22:33.040 --> 00:22:37.640
So he wasn't talking about overall a $1.2 billion increase in spending, he's talking

199
00:22:37.640 --> 00:22:41.960
about that on top of what we normally would see, which would have put us at a $2 billion

200
00:22:41.960 --> 00:22:47.460
increase at least in one year. It's ridiculous, okay? These are overreaching legislators.

201
00:22:47.460 --> 00:22:50.800
These are people who see about spending money and want to spend it. That's how they get

202
00:22:50.800 --> 00:22:51.800
their power. Yes?

203
00:22:51.800 --> 00:23:02.800
Can you explain why the general fund is so much, there's so much less growth rather than the general fund and the education?

204
00:23:21.800 --> 00:23:28.800
And guess what? The kids don't have all the money they need to eat their hot meal and to work on their computer and surf out to all those websites.

205
00:23:28.800 --> 00:23:34.800
The general fund doesn't get that kind of, they don't have growth taxes to go to feed them.

206
00:23:34.800 --> 00:23:39.800
So an economic boom doesn't really help the state as we're seeing.

207
00:23:39.800 --> 00:23:46.800
You see that the sales tax collections has increased the education trust fund by almost a billion dollars this year.

208
00:23:46.800 --> 00:23:50.800
But because they don't have growth taxes behind the general fund.

209
00:23:50.800 --> 00:23:59.800
And, of course, you realize that the whole Education Trust Fund was created specifically to get around a constitutional limitation on spending, right?

210
00:23:59.800 --> 00:24:05.800
You can't make expense, or spend, how does this go? It's been a while since I've looked at it.

211
00:24:05.800 --> 00:24:15.800
There's a limitation on the spending increases you can make to education out of the general fund until, before your debt is paid off.

212
00:24:15.800 --> 00:24:20.800
Debt is paid off. As long as you have debt, you can't increase more to education out of the general fund.

213
00:24:20.800 --> 00:24:25.800
Simple answer, create a different fund, funnel all your education spending through that.

214
00:24:25.800 --> 00:24:30.800
Now you can have all the debt you want and still increase your spending at the education level.

215
00:24:30.800 --> 00:24:36.800
So the whole creation of the Education Trust Fund, well, okay, one way of looking at it,

216
00:24:36.800 --> 00:24:41.800
is that it was created as a dodge to get around spending limitations.

217
00:25:11.800 --> 00:25:16.460
But if you constructed via the Constitution, you actually need a constitution amendment

218
00:25:16.460 --> 00:25:18.300
in order to change the money going into it.

219
00:25:18.300 --> 00:25:23.500
So, we had $500 million extra going into Education Trust Fund.

220
00:25:23.500 --> 00:25:26.860
Because of the way the legislature set it up, they couldn't just transfer the money.

221
00:25:26.860 --> 00:25:28.080
Because that money is earmarked.

222
00:25:28.080 --> 00:25:38.960
The sales tax money is earmarked going into Education.

223
00:25:38.960 --> 00:25:39.960
I'm not sure.

224
00:25:39.960 --> 00:25:40.960
I'm not sure.

225
00:25:40.960 --> 00:25:44.460
I had the information last night, but I don't remember it.

226
00:25:44.460 --> 00:25:49.920
The governor printed up a, well, okay, the legislative fiscal office posted an entire

227
00:25:49.920 --> 00:25:53.960
document showing all the sources of revenue, how much they're going to get, where it's

228
00:25:53.960 --> 00:25:58.960
going to go, and it was 137 pages long, so I didn't memorize it.

229
00:25:58.960 --> 00:25:59.960
Sorry.

230
00:25:59.960 --> 00:26:14.640
I looked at that two years ago and found out that teachers were paid in the neighborhood

231
00:26:14.640 --> 00:26:20.240
of $35,000 as an average salary and that the average Alabamian salary was in the neighborhood

232
00:26:20.240 --> 00:26:21.240
of $29,000.

233
00:26:21.240 --> 00:26:26.840
So teachers are getting paid more than everybody else on average, you know, for nine months

234
00:26:26.840 --> 00:26:27.840
of work.

235
00:26:27.840 --> 00:26:36.440
three-month vacation and you know not have to worry about so so you know

236
00:26:36.440 --> 00:26:41.360
that's that's the kind of thing you're looking at

237
00:26:41.360 --> 00:27:00.680
well you have to deal with the legislators each legislator has their own

238
00:27:00.680 --> 00:27:08.080
pet program that they want to see increased and there it is and you have to

239
00:27:08.080 --> 00:27:11.040
deal with it because you can't just the governor can present anything he wants

240
00:27:11.040 --> 00:27:12.940
but the legislators are the ones that vote on it.

241
00:27:12.940 --> 00:27:14.840
As a matter of fact, as we all know,

242
00:27:14.840 --> 00:27:17.440
it often comes down to one legislator,

243
00:27:17.440 --> 00:27:20.000
the chairman of the committee that the bill goes to.

244
00:27:20.000 --> 00:27:21.840
And if the chairman of the committee doesn't like the bill,

245
00:27:21.840 --> 00:27:23.440
it never gets on that agenda.

246
00:27:23.440 --> 00:27:25.560
We've seen that, haven't we, John?

247
00:27:25.560 --> 00:27:26.400
Haven't we, Dick?

248
00:27:26.400 --> 00:27:28.040
Haven't we seen this with ballot access legislation?

249
00:27:28.040 --> 00:27:30.800
It goes to the Constitution and Elections Committee,

250
00:27:30.800 --> 00:27:33.360
Gwen doesn't like it, it never comes up.

251
00:27:33.360 --> 00:27:35.960
One legislator, the way we've got our system structured,

252
00:27:35.960 --> 00:27:37.680
can block anything they want,

253
00:27:37.680 --> 00:27:39.680
as long as they're on the right committee.

254
00:27:39.680 --> 00:27:43.260
and so when you get the spending increases for this or spending cuts or

255
00:27:43.260 --> 00:27:46.240
whatever for this agency or that agency it can be blocked

256
00:27:46.240 --> 00:27:47.440
real simple

257
00:27:47.440 --> 00:27:51.080
or they can turn around and uh... put in a special bill for a special

258
00:27:51.080 --> 00:27:52.480
appropriation

259
00:27:52.480 --> 00:27:56.400
and uh... put it that way there's already one bill in the legislature

260
00:27:56.400 --> 00:27:57.840
for another tax exemption

261
00:27:57.840 --> 00:28:00.320
it's not even a charity it's a thrift store

262
00:28:00.320 --> 00:28:03.500
well I understand that thrift stores do a good job but

263
00:28:03.500 --> 00:28:05.120
a sales tax exemption

264
00:28:05.120 --> 00:28:07.580
they're talking about we have a two hundred fifty million dollar shortfall and they

265
00:28:07.580 --> 00:28:12.700
They want to give a tax exemption? What is this? It doesn't make any sense, but that's

266
00:28:12.700 --> 00:28:17.980
because the source, there's not one source for these bills. There's 140 sources in the

267
00:28:17.980 --> 00:28:20.580
legislation, and that's why.

268
00:28:20.580 --> 00:28:25.860
We're talking about giving the exemption to thrift stores?

269
00:28:25.860 --> 00:28:30.420
One specific thrift store, not even all thrift stores, just one thrift store, and that's

270
00:28:30.420 --> 00:28:32.460
part of the craziness of our system.

271
00:28:32.460 --> 00:28:51.460
Well, it's like Montgomery earlier, or I was going to say earlier this year, but last year came up with a brilliant idea to have a sales tax holiday.

272
00:28:51.460 --> 00:28:57.460
Where the state or the city and the county would get together and they would charge no sales tax for one day so you could buy school supplies.

273
00:28:57.460 --> 00:29:01.460
It was a great idea. And I got up in front of them and I said, why don't you do it all year long?

274
00:29:01.460 --> 00:29:05.460
If it's a good idea for one day, why isn't it a good idea for the whole year?

275
00:29:05.460 --> 00:29:10.460
Instead of one day of no sales tax, why don't you chop a whole penny off permanently?

276
00:29:10.460 --> 00:29:15.460
I'll take it. Especially since we've got a 10% sales tax in Montgomery right now.

277
00:29:15.460 --> 00:29:20.460
But they don't like that. It's easier to say one day sales tax free.

278
00:29:20.460 --> 00:29:25.460
It's symbolism. That's exactly what you're seeing with this budget shortfall thing.

279
00:29:25.460 --> 00:29:28.460
Budget shortfall, it's a symbol. It's something that most people can get behind.

280
00:29:28.460 --> 00:29:33.460
Most people can get behind. They don't bother looking deep to see the claws of the beast.

281
00:29:33.460 --> 00:29:36.460
All they see is the pretty facade that's painted over them.

282
00:29:39.460 --> 00:29:40.460
Yes, sir?

283
00:29:42.460 --> 00:29:43.460
Sorry.

284
00:29:58.460 --> 00:30:09.460
Looking at those numbers, it screams at me the pressure for them to want to get rid of their money. How soon do you think they'll actually do it?

285
00:30:28.460 --> 00:30:31.460
What the legislators do, because we're the ones who elect them.

286
00:30:31.460 --> 00:30:36.460
But if you look at them, and if you go out to the Politics Alabama's website, you can see a chart.

287
00:30:36.460 --> 00:30:43.460
Half of the state house sitting, our representatives today, didn't have an opponent in the last general election.

288
00:30:43.460 --> 00:30:46.460
Half.

289
00:30:46.460 --> 00:30:51.460
What choice do we have? I mean, how can we change that half of the legislature?

290
00:30:51.460 --> 00:30:56.460
We don't have a choice, and they don't care what we say, because we're not going to get a chance to vote for them anyway.

291
00:30:56.460 --> 00:31:06.460
And as long as we have that kind of situation, the legislators are never going to care what we think because the ones that don't have an opponent this last time think, you know, hey, it'll happen again.

292
00:31:06.460 --> 00:31:12.460
And the ones that had an opponent this time say, maybe I won't have one next time and it'll be my turn at the gravy train, you know.

293
00:31:12.460 --> 00:31:16.460
We've got people out there who've had six terms with no opponent.

294
00:31:16.460 --> 00:31:22.460
Alvin Holmes had five terms with no opponent. That's the only name I remember. There's a good number of names on the list.

295
00:31:22.460 --> 00:31:43.460
What's happened in the U.S. so often? The guys down in the U.S. so often, you've been here for a while, and you can't possibly live under a constitution with no guys in the U.S.

296
00:31:43.460 --> 00:31:50.460
Obviously, we know why they don't change the constitution, but do they still acknowledge that it's a completely bad constitution?

297
00:31:52.460 --> 00:32:22.460
I think within the next two or three election cycles, you'll see it push back up, and you'll see the constitutional convention idea come about, which is probably the worst idea I can possibly think of, the same people who we complain about how bad a job they've done in the last couple of years, the same people who complain about how bad a job they've done in the last couple of years,

298
00:32:22.460 --> 00:32:29.460
The legislature would have some control over completely rewriting it in their own image, are you kidding? No, thank you.

299
00:32:52.460 --> 00:33:19.660
Well, there are actually a few amendments that have been introduced to the legislature

300
00:33:19.660 --> 00:33:21.740
this session that do exactly that.

301
00:33:21.740 --> 00:33:26.740
If this provision has been superseded, it's no longer valid, repeal it.

302
00:33:26.740 --> 00:33:28.740
Perfect. That's the kind of thing you need.

303
00:33:28.740 --> 00:33:39.740
The only type of constitutional rewrite I would support would be one that only compiled all of the amendments into a single document.

304
00:33:39.740 --> 00:33:43.740
Just removed them by applying them into the document itself.

305
00:33:43.740 --> 00:33:46.740
That would be the only constitutional rewrite I would support.

306
00:33:46.740 --> 00:34:16.700
The argument is that if you have none of the above situation, you do not have a legislature

307
00:34:16.700 --> 00:34:36.700
I suppose it could happen if nobody ran, then what do they do if nobody runs?

308
00:34:36.700 --> 00:34:40.140
Well, if nobody runs, they'll do essentially like Dick Brubaker did at the last minute.

309
00:34:40.140 --> 00:34:42.460
He'll file his papers and he'll get in.

310
00:34:42.460 --> 00:34:46.180
Dick Brubaker, by the way, is one of, in my opinion, one of the better legislators.

311
00:34:46.180 --> 00:34:50.900
I like what he does. He does a lot of good work. But he came in at the last minute without

312
00:34:50.900 --> 00:34:54.040
an opponent. He never faced an opponent in the general election and he never faced an

313
00:34:54.040 --> 00:34:59.680
opponent in the primary. Nobody has ever voted with a choice for Dick Brubaker. And that's

314
00:34:59.680 --> 00:35:05.460
bad. He's a good legislator. I think he is. I honestly do right now. But how he got in

315
00:35:05.460 --> 00:35:10.460
was bad. He needs an opponent. Everybody needs an opponent. At least one opponent. Two, three,

316
00:35:10.460 --> 00:35:14.540
four. Don't talk about crowded ballots. Hey, that's fine. When I go out to eat dinner,

317
00:35:14.540 --> 00:35:18.540
I don't choose between McDonald's and Burger King. I've got hundreds of restaurants to choose from.

318
00:35:18.540 --> 00:35:22.140
And that's why I can always pick the one that best suits my needs today.

319
00:35:22.140 --> 00:35:27.140
Because I've got a lot of choices. We don't need two choices. We don't need one choice. We need ten choices.

320
00:35:27.140 --> 00:35:44.940
There are a few bills that have been introduced to reduce the ballot access requirements.

321
00:35:44.940 --> 00:35:50.460
The most interesting, believe it or not, did not come from a third party.

322
00:35:50.460 --> 00:35:56.940
And its proposal is to take the state judgeships, make them nonpartisan.

323
00:35:56.940 --> 00:36:02.540
There is no signature requirement for this, only a filing fee, 2% of the salary.

324
00:36:02.540 --> 00:36:03.540
That's great.

325
00:36:03.540 --> 00:36:06.500
Nonpartisan, I don't care whether they're Democrats or Republicans, look at their case

326
00:36:06.500 --> 00:36:07.500
histories.

327
00:36:07.500 --> 00:36:10.900
That's how you judge a judge, what decisions have they made, right?

328
00:36:10.900 --> 00:36:11.900
No signatures.

329
00:36:11.900 --> 00:36:13.980
You don't need people to say, yes, I want you to be a judge.

330
00:36:13.980 --> 00:36:16.380
They do that at the ballot box anyway.

331
00:36:16.380 --> 00:36:19.380
You just pay that little filing fee and you're on the ballot.

332
00:36:19.380 --> 00:36:20.380
Now I'd love to see that.

333
00:36:20.380 --> 00:36:25.100
I'd love to see that for the governor and all the other statewide races and the legislature.

334
00:36:25.100 --> 00:36:28.780
Let's get the parties out of the legislature. That's great. And that's probably the most

335
00:36:28.780 --> 00:36:32.300
interesting bill. And because it's the most interesting and promising bill I've seen,

336
00:36:32.300 --> 00:36:39.420
it ain't going nowhere. My opinion. I could be wrong, but I don't think it's going to

337
00:36:39.420 --> 00:36:40.420
get passed.

338
00:36:40.420 --> 00:37:00.420
In your opinion, a lot of times their budget projections, of course, are long, they don't necessarily pay out, sometimes they over-project, over-spend, but then they have to come in with unexpected prorations, a lot of times they under-project and they end up with extra money.

339
00:37:00.420 --> 00:37:02.420
And they spend it.

340
00:37:02.420 --> 00:37:14.420
There's no doubt about that. They always find a way to burn every last dollar by the end of the year, by the end of the fiscal year, by the rainy day.

341
00:37:14.420 --> 00:37:16.420
Well, the budget has at its bottom.

342
00:37:16.420 --> 00:37:17.420
I don't think we have any.

343
00:37:17.420 --> 00:37:20.420
Certainly we do. We still have money to look at.

344
00:37:20.420 --> 00:37:31.420
Yes, yes. They dipped into it last time to pay off some of the budget, and that's one of the arguments, is with that kind of an increase in funding, we should completely rejuvenate the rainy day fund.

345
00:37:31.420 --> 00:37:37.500
and Money-day Fund. But Paul Hubbard is saying, no, 7% teacher pay increase. That's the kind

346
00:37:37.500 --> 00:37:40.700
of thing that's biting into us. But at the bottom of every budget, you've got a section

347
00:37:40.700 --> 00:37:47.300
of conditional appropriations, which is appropriations, money we can spend if we have it. Well, they

348
00:37:47.300 --> 00:37:52.560
don't have it, that's fine, but hey, income is now going, the state revenue is increasing

349
00:37:52.560 --> 00:37:55.580
more than we thought it would. Guess what? These conditional appropriations kick in one

350
00:37:55.580 --> 00:38:01.140
by one. Boom, boom, boom, boom, boom. And there's no way we actually come up in the

351
00:38:01.140 --> 00:38:05.900
We spent the whole year with more money, you know, with a surplus than we thought we would,

352
00:38:05.900 --> 00:38:09.220
because those conditional appropriations lead all up as quick as they can.

353
00:38:09.220 --> 00:38:15.460
And we actually saw it, there was some late disbursements of cash.

354
00:38:15.460 --> 00:38:18.140
When we knew we were going to have a surplus, there were some late disbursements of cash

355
00:38:18.140 --> 00:38:19.420
these last couple of months.

356
00:38:19.420 --> 00:38:20.420
You know, so, interesting.

357
00:38:20.420 --> 00:38:22.420
Interesting.

358
00:38:50.420 --> 00:39:11.420
Those are the primary sources of income. I would think, given the fact that oil and coal prices are so high, in fact that forest crop prices are so high, and that agricultural crops are pretty high in the continent,

359
00:39:11.420 --> 00:39:40.420
And don't ever doubt it. The income projections are also based on how much they want to spend. That gets in there.

360
00:39:40.420 --> 00:39:50.420
I've seen the figures. I've seen figures from one agency and another agency talking about how much revenue we'd have and there's like $200, $300 billion difference in between, or a million dollars difference.

361
00:39:50.420 --> 00:39:55.420
So, you know, it's not as scientific as we would like to believe.

362
00:39:55.420 --> 00:40:11.540
A little more, yeah. Spending always goes up. Always goes up. Unless we have a proration

363
00:40:11.540 --> 00:40:16.820
situation. The legislature, in my memory, has never budgeted less this year than they

364
00:40:16.820 --> 00:40:23.780
had last year. Never. Never. They may run into spending too much and have to cut back

365
00:40:23.780 --> 00:40:53.780
I've got some figures from, I don't know if y'all ever read The Governing Magazine, they come out with a yearly source book, the last one was June of 2004, and based on that information, Alabama still had a negative economic momentum, it was small, I think four-tenths of one percent, but our economy was still trending downward, a negative economic momentum, not growing. Now that's obviously changing.

366
00:40:53.780 --> 00:41:02.780
I've changed a little bit with the sales tax and the revenue we're seeing, but Alabama has not responded like a lot of the rest of the nation has.

367
00:41:02.780 --> 00:41:10.780
Our economy is not growing gangbusters. I want to see the new numbers they come out with in a couple of months to see how we changed over the last year.

368
00:41:10.780 --> 00:41:40.620
And when you look at our tax, if you look at the tax revenue and our tax burden it looks

369
00:41:40.620 --> 00:41:47.740
is really low, we're always down in the low 40s, the 47th lowest taxes in the nation.

370
00:41:47.740 --> 00:41:52.300
But when you look at it on a per capita basis as a percent of our personal income, we're

371
00:41:52.300 --> 00:41:57.820
about up in the 13 to 20 range, because our income is a lot lower than most other states

372
00:41:57.820 --> 00:42:02.820
as an average, and so therefore the same amount of money taken out of ours is a bigger bite

373
00:42:02.820 --> 00:42:04.820
percentage-wise.

374
00:42:04.820 --> 00:42:10.260
So we actually rank higher when you look at taxes as a percentage of our per capita personal

375
00:42:10.260 --> 00:42:14.780
and Financial Income. We're way up there in the text. And I've seen, like I said, over

376
00:42:14.780 --> 00:42:19.660
the time I've seen this range between 13 and 20 in the rankings. And it's ridiculous. It's

377
00:42:19.660 --> 00:42:24.100
like when you look at teacher's pay, for example. Teacher's pay, we saw the report a week ago.

378
00:42:24.100 --> 00:42:29.860
It said, what, we were 47th, 46th in the nation. So really low, okay? Lowest teacher's pay.

379
00:42:29.860 --> 00:42:33.700
They weren't taking into account any of the benefits that they get. You know, the vacation,

380
00:42:33.700 --> 00:42:38.220
the healthcare. You pay $1, you got healthcare. Good heavens. That's a wonderful benefit.

381
00:42:38.220 --> 00:42:42.820
I'd love it, you know, but they weren't taking any of that into account, and somebody actually

382
00:42:42.820 --> 00:42:46.140
went to them and talked to them, spent some time, figured it out, and if you took that

383
00:42:46.140 --> 00:42:52.260
into account, we were up in the 20s, the retirement, yeah, there's a bill in front of the legislature

384
00:42:52.260 --> 00:42:58.860
right now that will allow people who've had military service to buy in retirement time.

385
00:42:58.860 --> 00:43:02.740
If you've had four years of military service, you can then pay the premiums that you would

386
00:43:02.740 --> 00:43:06.940
normally pay, a dollar a month, a dollar, whatever, you know, pay your premiums that

387
00:43:06.940 --> 00:43:10.180
you normally pay and you get credit for that as just as if you've been employed by the

388
00:43:10.180 --> 00:43:13.740
state, but you weren't employed by the state, so you shouldn't get the retirement benefits

389
00:43:13.740 --> 00:43:14.740
for it, you know.

390
00:43:14.740 --> 00:43:21.100
This is just one more way to get additional expense, more benefits for the employees, more

391
00:43:21.100 --> 00:43:24.740
expense for the taxpayers, and it's one of the problems that we have, because the legislators

392
00:43:24.740 --> 00:43:25.740
still do that kind of thing.

393
00:43:25.740 --> 00:43:26.740
Yes?

394
00:43:26.740 --> 00:43:51.300
In California, in the late 90s, when the budgets were going up, revenues were going up, capital gains were at all, instead of saving some of that money, the legislative body went off and gave bimms to state bureaucrats who went off over, and now they're gonna have to pay the price,

395
00:43:51.300 --> 00:44:03.400
______.

396
00:44:03.400 --> 00:44:13.400
Pretty much and you saw the economic boon times, you know, if you look at all around the nation most states will increase their spending to match the revenue and it's a recurring expenditure.

397
00:44:13.400 --> 00:44:19.320
Well, we all know this, okay? Economies don't go straight up or straight down forever. You

398
00:44:19.320 --> 00:44:23.800
cycle, okay? You have good economic times and bad economic times. Good economic times,

399
00:44:23.800 --> 00:44:27.760
bad economic times. Well, the spending levels don't have anything to do with the economic

400
00:44:27.760 --> 00:44:32.120
times, you know? It's just when you get an increase in revenue, they increase the spending

401
00:44:32.120 --> 00:44:35.560
to match. And then when the revenue starts to drop, they start to panic. And the only

402
00:44:35.560 --> 00:44:39.400
way out of it is to raise taxes. So, yeah, that's exactly what happens. And it's not

403
00:44:39.400 --> 00:45:08.400
In the state government, there's so many automatic increases in spending, people get automatic raises, promotions, health care costs go up by so much, years of service, there's a whole series of things, the rental agreements that we agree to have automatic increases in spending.

404
00:45:08.400 --> 00:45:37.400
And you're exactly right, one of the big debates is how much of a raise to give teachers this year. The debate isn't should we give teachers a raise, it's how much.

405
00:45:37.400 --> 00:45:50.400
It's how much? It's how much because there's a state law that was passed a few years back that says if you get more than I think is a three or four percent increase in revenue to the education trust fund, you have to give teachers a pay raise.

406
00:45:50.400 --> 00:46:02.400
It's a mandatory pay raise. Well, look at that. We triggered it. They have to get a pay raise. So the question is how much? That's the only question we have. And you're right. That's a bad thing.

407
00:46:02.400 --> 00:46:12.400
Any time you're forced into giving a pay raise simply because you got the money, I was talking to a city council in Wetumka a few years back.

408
00:46:12.400 --> 00:46:15.400
They were considering dropping a one penny on the sales tax.

409
00:46:15.400 --> 00:46:18.400
And I was up there saying, yes, it's a good idea. You should do that.

410
00:46:18.400 --> 00:46:21.400
And as I left, one of the county commissioners corralled me.

411
00:46:21.400 --> 00:46:31.400
He says, I want you to be more persuasive because we could use that one penny sales tax that we're going to raise as soon as they drop it.

412
00:46:31.400 --> 00:46:38.400
City Councilman over in Montgomery once told me, we can always use more money, and that's true, they can always spend more money.

413
00:46:38.400 --> 00:46:43.400
There is no limit to it. You could double the budget today and they could spend it, okay?

414
00:46:43.400 --> 00:46:48.400
Department of Corrections, if you gave them their double budget, they'd be hollering for more within two years.

415
00:46:48.400 --> 00:46:50.400
They're never satisfied.

416
00:46:50.400 --> 00:47:12.400
Colorado has a good system that they implemented a few years ago, and what they do is they take last year's budget, multiply it by the increase in population, so the population went up by one percent, they would multiply last year's budget by a hundred and one percent.

417
00:47:12.400 --> 00:47:42.360
and then they adjust it to the cost of living so that in any one year, the budget can go up by that, by the contract, so you get a definite amount with 10 of these and if the revenues come in in excess of that, it has to be returned to the tax payers, it doesn't go into any of the funds or left over for some other project, it goes back to the tax payers,

418
00:47:42.400 --> 00:48:12.400
and they have to start all over again in the next two to three. Legislators and bureaucrats want to spend more money, but they're focused more on, you know, what can you cut so that you can spend on the paper projects and of course there's a lot of debate and public pressure to get rid of this amendment to the constitution and overspend those limits and things of that nature

419
00:48:12.400 --> 00:48:33.400
Also, you know, a lot of people think that the legislature does a much better job of managing resources because they drop programs and drop resources. They sell off those things in order to keep their products safe.

420
00:48:33.400 --> 00:48:39.400
Because they're more attentive to the general needs of the population.

421
00:48:39.400 --> 00:48:48.400
And that's a good idea. When Riley was elected, I sent a series of proposals and things he should think about when crafting his first budget.

422
00:48:48.400 --> 00:48:56.400
And one of them was that you had to have some way of examining programs, examining spending to see if it's accomplishing what you intended it to.

423
00:48:56.400 --> 00:49:01.400
And if it's not, cut it. Figure out another way to do it, and do it that way instead.

424
00:49:01.400 --> 00:49:06.400
And of course, I never heard back from him. He's not terribly interested in that kind of common sense.

425
00:49:06.400 --> 00:49:10.400
In a sense, that's the kind of wisdom you get when you talk to a business owner.

426
00:49:10.400 --> 00:49:14.400
Okay, the business owner says, is it paying, is what we're doing here paying for itself?

427
00:49:14.400 --> 00:49:15.400
No, stop it.

428
00:49:15.400 --> 00:49:20.400
Right, he has insisted on his performance-based budget.

429
00:49:20.400 --> 00:49:23.400
Which, I haven't seen its effects yet.

430
00:49:23.400 --> 00:49:24.400
Well, unfortunately...

431
00:49:24.400 --> 00:49:27.400
I haven't seen its effects yet.

432
00:49:27.400 --> 00:49:35.400
Unfortunately, it's, you know, here's your money, here's your duty, and did you accomplish your goal.

433
00:49:35.400 --> 00:49:41.400
But instead of saying, if you didn't, they're going to cut you. If you didn't, then you're going to get more money.

434
00:49:41.400 --> 00:49:46.400
So you didn't quite get the message. You didn't read all the way down to the bottom.

435
00:49:46.400 --> 00:49:51.400
Well, government actually, that is a common problem, and that is that the government rewards failure.

436
00:49:51.400 --> 00:49:55.400
They always view it as we didn't do it with enough money.

437
00:49:55.400 --> 00:49:59.400
And so therefore, increasing the funding for the next year will allow us to accomplish our goal.

438
00:49:59.400 --> 00:50:02.400
That is the way the government collective tends to think.

439
00:50:02.400 --> 00:50:10.400
There's individuals who are different, like I said Dick Brubaker doesn't seem to think that way when I talk to him, but as a collective that's the way they think.

440
00:50:10.400 --> 00:50:19.400
And so then when the schools are getting constant C's and D's on our performance and how they teach their students, well let's just funnel more money into them.

441
00:50:19.400 --> 00:50:28.400
That's the solution. It doesn't help because the same people are involved in spending the money and they're running the same programs that gave us the poor student education in the first place.

442
00:50:28.400 --> 00:50:33.400
But it's more money, therefore it must be good.

443
00:50:33.400 --> 00:50:38.400
That's one of the problems is the legislators tend to focus on money, not on performance.

444
00:50:38.400 --> 00:50:41.400
They don't care about performance.

445
00:50:41.400 --> 00:50:45.400
As long as they can hand money out, they've got power.

446
00:50:45.400 --> 00:50:47.400
They've got prestige.

447
00:50:47.400 --> 00:50:51.400
They can go on talk radio shows and TV shows and they can go to banquets

448
00:50:51.400 --> 00:50:57.400
and go to the GOP local meeting and be welcomed with open arms.

449
00:50:57.400 --> 00:51:03.160
Well, what happens to the legislators who don't do that, who don't put bills out, who don't bring money home?

450
00:51:04.640 --> 00:51:06.640
They get voted out the next election.

451
00:51:08.560 --> 00:51:10.560
So, yes sir.

452
00:51:27.400 --> 00:51:57.400
Yes. And that's why one of the problems I have with government competing in the private sector businesses, such as the ABC stores, okay? You've got government with their ability to just take in whatever money from the taxpayers they want, and there's no restrictions they have, really, effectively. They can under-price anybody they want, and they can do whatever they want.

453
00:51:57.400 --> 00:52:01.400
I want, fund it with taxpayer dollars, run anybody out of business they wanted to, if

454
00:52:01.400 --> 00:52:02.400
they chose to.

455
00:52:02.400 --> 00:52:03.400
Okay?

456
00:52:03.400 --> 00:52:06.160
That's the kind of power they have, running up against the privately owned package stores.

457
00:52:06.160 --> 00:52:08.200
I'd rather see privately owned package stores.

458
00:52:08.200 --> 00:52:11.200
It's not going to happen.

459
00:52:11.200 --> 00:52:16.960
Now, Fulmer, Emery Fulmer, former mayor of Montgomery, is now head of the ABC board,

460
00:52:16.960 --> 00:52:18.480
and he made the right noises at the beginning.

461
00:52:18.480 --> 00:52:21.840
Yeah, we're going to see about privatization, he said.

462
00:52:21.840 --> 00:52:24.240
Then he went in and came out and said, we can't.

463
00:52:24.240 --> 00:52:26.800
And I said, well, why can't you?

464
00:52:26.800 --> 00:52:31.800
Because we have leases with the buildings for like five or ten years down the road.

465
00:52:31.800 --> 00:52:34.800
Sell the leases to whoever buys the package store.

466
00:52:34.800 --> 00:52:37.800
No, no, we can't do that.

467
00:52:37.800 --> 00:52:40.800
Okay, yeah, phase them out one by one.

468
00:52:40.800 --> 00:52:42.800
Yeah, but see, it doesn't happen that way.

469
00:52:42.800 --> 00:52:49.800
So, the changes that we want to see are very hard to make simply because of the types of people that get up there.

470
00:52:49.800 --> 00:52:53.800
You know, I've had my disagreements and agreements with Mayor Fulmer,

471
00:52:53.800 --> 00:52:58.560
But I always gauged my opinion of him based on what he was doing.

472
00:52:58.560 --> 00:53:03.160
And it's lower now than it was before because of what he's not doing that he could do with

473
00:53:03.160 --> 00:53:04.160
the ABC board.

474
00:53:04.160 --> 00:53:05.160
Yes, sir?

475
00:53:05.160 --> 00:53:08.960
Would you say that the ABC store is pricing below the top?

476
00:53:08.960 --> 00:53:11.720
No, I said they could.

477
00:53:11.720 --> 00:53:15.000
If you want to look at it, though, there is a...

478
00:53:15.000 --> 00:53:17.320
Go to a package store, privately owned package store.

479
00:53:17.320 --> 00:53:20.400
Compare the price of the alcohol with what you'll find in an ABC store.

480
00:53:20.400 --> 00:53:21.400
It's higher.

481
00:53:21.400 --> 00:53:22.400
Why?

482
00:53:22.400 --> 00:53:29.400
The tech insurer has to buy from me the insurer has to retail fund me.

483
00:53:39.000 --> 00:53:46.000
The tech insurer has to buy from me the insurer has to retail fund me.

484
00:53:52.400 --> 00:53:55.900
You've got all the licenses and you're fine. You've got all the wine. You're ready to sell it.

485
00:53:55.900 --> 00:53:59.200
You can't sell it to somebody who walks in your door. You have to sell it to the state.

486
00:53:59.200 --> 00:54:03.840
The state can sell it back to you. You can sell it then to the customer.

487
00:54:03.840 --> 00:54:09.280
You can't sell your wine directly. You have to sell it to the state first.

488
00:54:09.280 --> 00:54:16.280
No, you can. There's two wineries, three wineries in Alabama.

489
00:54:16.280 --> 00:54:25.280
No. You can't make any alcohol for personal use unless you're licensed.

490
00:54:25.280 --> 00:54:32.280
Nothing. Federal losses you can make up to 200 gallons per year for personal consumption.

491
00:54:32.280 --> 00:54:39.280
100 gallons per adult with a two adult household, that's 200 gallons.

492
00:54:39.280 --> 00:54:44.280
I don't know about you, I can't drink 200 gallons worth of beer, wine or anything in a year,

493
00:54:44.280 --> 00:54:49.960
not and still keep my job and stay out of AA, but that's what federal law allows you

494
00:54:49.960 --> 00:54:55.680
to do. State law says you can't make any kind of alcoholic beverage without the tax

495
00:54:55.680 --> 00:55:03.000
stamps. Why? Without the tax stamps. That's why. They want their tax money. They don't

496
00:55:03.000 --> 00:55:08.880
want you making your wine or your beer and drinking it instead of buying from the ABC

497
00:55:08.880 --> 00:55:13.120
because again everything goes through the ABC store. In addition to the taxes they also

498
00:55:13.120 --> 00:55:19.120
You can also get the markups they do when the alcohol is sold to the ABC board and then they sell it to the retailer.

499
00:55:19.120 --> 00:55:23.120
There's a markup automatically. So they get a lot of profit.

500
00:55:23.120 --> 00:55:31.120
You can get a criminal charge for possession of marijuana without the tax stamps.

501
00:55:31.120 --> 00:55:34.120
Anybody want to bet that there's a cop down there waiting for the idiot?

502
00:55:34.120 --> 00:55:38.120
I want tax stamps for my marijuana.

503
00:55:38.120 --> 00:55:44.120
The whole point is to give another charge you can pile on them.

504
00:55:44.120 --> 00:55:50.120
And here's another interesting bill that's before the legislature.

505
00:55:50.120 --> 00:55:54.120
Anybody ever heard of pseudoephedrine? It's a decongestant.

506
00:55:54.120 --> 00:56:00.120
It's in maybe half the cough medicines that you'll find on the market, over the market.

507
00:56:00.120 --> 00:56:05.120
Pseudoephedrine is also a precursor drug for the making of methamphetamines.

508
00:56:05.120 --> 00:56:09.120
Don't nod so, we might think you might know this for our, you know.

509
00:56:09.120 --> 00:56:18.120
So, it's a precursor drug, so the new bill in front of the legislature says that any product, including cold medication,

510
00:56:18.120 --> 00:56:22.120
over the counter cold medication, that has pseudoephedrine above a certain concentration,

511
00:56:22.120 --> 00:56:28.120
you have to show a photo ID and sign a register in order to buy it, and you're limited to three packages at a time.

512
00:56:28.120 --> 00:56:34.120
I'm trying to stop the dreaded production of methamphetamines, but I got to show a driver's ID, a driver's license now,

513
00:56:34.120 --> 00:57:04.120
I don't know. Dick, can you tell us? I'm sorry. You just nodded so quickly when I said it before. I just couldn't resist. I don't know how much it would take, but the point is, you know, they're moving over into a lot of things. They've got their one goal, that's the goal they're after, and they've got their second goal, and they've got their third goal, and they've got their fourth goal, and they've got their fifth goal, and they've got their sixth goal, and they've got their seventh goal.

514
00:57:04.120 --> 00:57:06.720
and the heck with everything else.

515
00:57:06.720 --> 00:57:07.720
So what?

516
00:57:07.720 --> 00:57:10.920
You've got to show a driver's license and sign a form when you buy your cold meds.

517
00:57:10.920 --> 00:57:15.000
We have an important goal we're trying to reach, and you're just going to have to be

518
00:57:15.000 --> 00:57:19.920
inconvenient.

519
00:57:19.920 --> 00:57:23.720
There's a lot of things you can learn by looking at what the legislator tries to do.

520
00:57:23.720 --> 00:57:26.620
The ones that fail are more interesting than the ones that succeed sometimes.

521
00:57:26.620 --> 00:57:28.640
What are they trying to do?

522
00:57:28.640 --> 00:57:31.640
Everybody knows what they did do, but what did they try to do?

523
00:57:31.640 --> 00:57:32.640
It's fascinating sometimes.

524
00:57:32.640 --> 00:57:39.640
Thank you, we're out of time. I want to thank you for a great presentation coming down from Montgomery and liking it.