Smart Budget Reforms Necessary for Economic Growth

By Clyde Chambliss

 

Rep. Danny Garrett and Sen. Clyde Chambliss meet with Governor Kay Ivey on May 10 to discuss the work of the Joint Task Force on Budget Reform.  

The 2017 session of the Alabama Legislature is coming to a close, and as I reflect on the challenges we faced over the past year, I am proud of the way the Legislature has worked through many difficult issues: preparing for the possible impeachment of a sitting Governor, maintaining focus by passing balanced budgets that did not raise taxes on the hard-working families of Alabama, and developing a prison construction plan, to name just a few. I am thankful, too, for the steady leadership of our new Governor, Kay Ivey, and I trust she will continue to lead our state with dignity.

Looking forward, for Alabama to prosper, it is essential that conservatives continue to press for reforms in our state’s finances.  A key challenge in dealing with state budgets is that over 90% of tax revenues are earmarked for specific programs and departments, a level far higher than the average of 30% for the other forty-nine states.

Further, tax collections for both budgets are reduced by approximately $4.5 billion annually via hundreds of tax credits, exemptions, and deductions. The goal of many of these credits and exemptions is to promote economic growth and encourage certain market behaviors: for example, there are credits to encourage young dentists, doctors, and nurses to practice in rural areas, which is commendable – but I suspect many other credits and deductions have outlived their usefulness and should be revisited.

For the past six months, I have led a team of Republican and Democratic legislators who are attempting to find innovative solutions to our state’s budget challenges. Like many government committees, the team has a bland name (The Joint Task Force on Budget Reform), but our mission is serious and our work has been deep.

On May 16, our team finished a 33-page interim report that examines the state’s fiscal challenges and offers some tentative recommendations. For one, we recommend that every new tax deduction or exemption contain a sunset clause. Further, our committee believes spending on state services must be prioritized. Similar to other states, Alabama should identify spending priorities on an A-B-C scale.

Governor Ivey has indicated strong support for our team’s mission, and I am excited to implement some of our ideas in the 2018 legislative session. The full report can be viewed on the Legislative Fiscal Office’s website, www.lfo.state.al.us, under the Special Reports tab.

Ultimately, the financial success of our state will occur via a combination of prioritizing the services needed by our citizens and preparing for lean years by building financial reserves during expanding economic times.  Working together, we will make this happen!

Clyde Chambliss represents all or parts of Autauga, Elmore, Chilton, Coosa, and Tallapoosa Counties in the Alabama Senate. Follow him on Twitter for the latest legislative updates: @Clyde_SD30