Alabama Special Legislative Session: Budget Solutions

Date: August 04, 2015

After failing to agree on a budget for the state’s General Fund for the next fiscal year, Alabama Gov. Bentley called a special legislative session to address the issue.

When the regular legislative session ended June 4 without a General Fund Budget for the next fiscal year,Alabama lawmakers knew there was more work to be done. Gov. Bentley called a special legislative session that began July 13.

“The date of the Special Session was a total surprise,” says NFIB/Alabama State Director Rosemary Elebash. The House and Senate leadership met with Gov. Bentley and they assumed the session would be called in August.  

Legislative committees were formed following the regular session, to study different proposals to address the financial situation of the General Fund budget including unearmarking, transferring monies from the education budget, changing the repayment schedule for the Alabama Trust fund, and reducing and consolidating state agencies.  The committees were preparing to have plans ready for a mid-August Special Session.

“One of the most serious issues we face in our state is the funding of the General Fund Budget,” Gov. Bentley said in a statement. “With no budget in place to fund state government following the Regular Legislative Session, the legislature must return for a special session.”

Legislators met on July 13 for only a few minutes, reported. The Legislature adjourned until August 3.

Alabama faces a budget hole estimated at $200 million for the fiscal year beginning Oct. 1. Gov. Bentley has suggested raising more revenue to cover this gap by increasing taxes on cigarettes, soft drinks, eliminating the deduction of FICA taxes, raising the threshold on the Business Privilege Tax are among the proposals. His proposed plan for the special session would raise taxes by $310 million, less than his original proposal of $541 million presented during the regular session.                                

Lawmakers brought forth a proposed budget for the General Fund during the regular legislative session, implementing deep cuts for a budget total of $1.6 billion, below the $1.8 billion of the General Fund’s current level. Gov. Bentley vetoed that budget.

Lawmakers have weighed in, expressing disappointment in Gov. Bentley’s plan. Many are unwilling to increase taxes on all fronts.

The Gov.’s tax package was not introduced on the opening day of the special session.  The Legislature recessed for three weeks to continue working on budget solutions within the committees formed to look at different proposals. The Special Session Proclamation agenda issued by Gov. Bentley included proposed taxes, passing a bond issue for improvements at the Gulf State Park, un-earmarking certain state taxes and more.

“As soon as the bills are released, we will be looking at how those bills affect small business and our members,” Elebash says.

Related Content: Small Business News | Alabama | Economy

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