Corporate welfare... aka... legalized blackmail.... is alive and well in North Alabama. Here's the latest sorry chapter: three businesses at the swanky Bridge Street development in Huntsville are now closed and owe more than ten thousand in back taxes.
The city isn't the only entity left high and dry:
Bayer Properties, the company that manages Bridge Street, refused to comment on the closings or the taxes owed to the county, but Madison County Tax Collector Lynda Hall says this is the first time in over a decade her office may be forced to seize property from the businesses and hold a public auction.
Watercress closed overnight leaving patrons with gift cards wondering how they will get a refund. The answering machine inside the darkened restaurant does not give any indication the business is closed. Tax collectors have attempted for over a week to reach the business owner who has not returned their calls or ours.
No doubt Bayer Properties is just too busy managing the $4 million the city handed over last fall to help it "lure" the Belk department store to Bridge Street from its current location a mile and a half away.
Hey, $4 million is peanuts considering what they wanted from the city in 2010. You see, the developers wanted to attract a "high end department store," but those were all demanding blackmail money. Macy's wanted $20 million and Nordstrom offered to locate here for the bargain price of $12 million. That's no joke, campers. It's also no laughing matter that some in city government thought it was a good idea!
What a deal... collect sales taxes from customers - and keep them:
The plan under consideration calls for the city to give O&S Holdings 50 percent of any growth in sales taxes at Bridge Street. [...] (Mayor Tommy) Battle, though, said Huntsville has never before agreed to share sales tax proceeds with a developer. He pointed out that Valley Bend at Jones Farm and many other large retail projects have been successful without local government subsidies. [...]
But Councilman Will Culver, whose district includes Bridge Street, said he supports the financing plan and hopes the city can find a way to make it happen. "We have to step outside the box and get a little creative," Culver said.
Culver had to wait a couple of years to "get creative" again, but he was the driving force behind the "Belk Department Store blackmail caper" last fall.
Meanwhile, neighboring counties are wrestling with their own corporate welfare projects. For years, Decatur Mayor Don Kyle has been working to attract a huge retail development called "Sweetwater" that will be partially funded with $40 million in sales tax rebates. Many question the wisdom of this folly, asking the obvious question:
What makes them think the people of Madison will flock west toward Decatur when they have places galore to shop and when the Lollapalooza of upscale shopping districts in north Alabama, Bridge Street, lies just east of Madison on the western edge of Huntsville? You don't even have to get on I-565 to get there.
Why would people in Huntsville make the trek to Decatur to pay 9 percent sales tax on what they can buy cheaper in their hometown?
That's right. If Mayor Kyle has his way, we'll have two corporate welfare developments fighting over the same wallets. Heavens, it's scary to think how "creative" Councilman Culver might get if that happened.
It's time to stop this never-ending cycle. Surely the next developer asking for a hand-out will be CBL & Associates, owner of Madison Square Mall. That's the development that Belk is leaving to move to Bridge Street. The aging complex is losing quite a few tenants and wondering how to revitalize:
Less clear is what the loss of Belk two years from now will mean for Madison Square. Davis said owner CBL & Associates recently hired a consultant who specializes in the revitalization of large shopping centers. Open since 1984, Madison Square has about 1 million square feet of retail space.
Davis said he and Battle have had multiple conversations about the mall's future with Michael Lebovitz, CBL's executive vice president for development. Efforts to reach Lebovitz for an interview were not successful.
Who can doubt that the consultant will first suggest that CBL ask for a nice, fat check from the city? After all, they have some outstanding examples to go by.
But how long before our local governments stop playing along with these scams?
For decades, North Alabama's been getting a pretty sweet deal on electricity rates, courtesy of the Tennessee Valley Authority. But President Obama's budget proposal released yesterday may change that. The budget suggests that debt concerns make make it necessary to sell TVA to private businesses.
The privatizing of TVA "can help put the nation on a sustainable fiscal path," according to Obama's budget. The passage addressing TVA closes by saying his administration intends to review options for TVA, "including the possible divestiture of TVA, in part or as a whole."
You have to wonder if this is an actual proposal, or a shot across the bow of the Republican deficit hawks who hate all federal expending - that doesn't directly affect their districts.
Take AL-05 Congressman Mo Brooks (please!), for example. Fresh off his assertion that President Obama is a "Socialist" who is "in denial" about the nation's debt, Brooks quickly changed his tune yesterday and defended this New Deal legacy program:
Brooks said that assertion is "unsupportable and inexplicable," pointing out that TVA is self-sustaining and receives no tax subsidies. Brooks also questioned if TVA's assets could be sold for a profit.
But he's willing to "consider it," only if "...President can make that case to Tennessee Valley citizens that doing so will lower the costs of electricity to TVA consumers and is in America's interests."
Um.... isn't it written somewhere in the Conservative Bible that private industry is always more efficient than the government? We hear that talking point all the time even though it's patently false: private businesses have the resources to stack the deck in their favor via lobbying for tax breaks and even getting guaranteed profits.
Alabama Power executives no doubt already have their accountants busily calculating the financial windfall should the company be allowed to snap up even a portion of TVA's assets and customer base. Unlike private utilities, TVA isn't looking to turn a profit: compare that to Alabama Power's guarantees profit margin courtesy of the so-called Alabama "Public Service" Commission.
Hold on to your wallets, campers! This could be costly.
The chickens may be able to come home to roost, but it's going to get a bit harder for airplanes to land in Alabama in the coming months. The FAA has issued its list of airports slated to lose their control towers due to sequestration budget cuts. You can almost say that we're getting off easy in Alabama: Mississippi is losing 5 control towers and West Virginia loses 3.
The Federal Aviation Administration said on Friday it will close 149 air traffic control towers at small airports across the country beginning on April 7 as it copes with automatic federal spending cuts.
The White House and transportation leaders have warned for weeks that the $85 billion in federal cuts known as "sequestration" would force smaller airports across the country to curtail operations. [...] The targeted towers all have fewer than 150,000 takeoffs and landings or 10,000 commercial flights a year. They cater to corporate jets and individuals with private planes. Many also house flight schools, serve as hubs for smaller airlines, or provide relief capacity for larger airports nearby.
While I don't have a whole lot of sympathy for people flitting about on their corporate jets, I do have a lot of sympathy for small communities as they desperately try to keep their economies afloat.
Anything that raises prices and reduces flights is bad news for them. That's been true for a long time: in 1998, the AP was writing about the impact of high airfares on smaller communities - and the economy was booming then! A decade later, the main issue hasn't changed: the cost to fly to/from the local airport balanced against the time cost to travel hours to a larger, cheaper airport.
The White House Council on Economic Advisors lists strengthening rural infrastructure as one of the key ways to strengthen rural communities. However, the transportation component of the plan talks mainly about highways. That's important: most of us use roads every day. But air travel is also important to building local industry and recruiting outside employers.
Many parts of south Alabama desperately need more economic development and local leaders are working hard on the problem. Reduced airport services won't stop their efforts, but it certainly won't help at all.
The Decatur City Council is offering a private developer $40 million in sales tax rebates and infrastructure incentives to build a retail development in Limestone County - and asking the Limestone County schools to kick in even more by giving up some expected sales tax income.
To make the Sweetwater development a reality, though, other government entities much pitch in, Hammon said. [...] "According to the developer, it's still a little bit short. That's where Limestone County is going to have to come in. (Decatur) can't do anything else."
Note that Decatur is the county seat of Morgan County, so we have the interesting situation of the city council in one county asking a neighboring county to fork over some corporate welfare cash.
So here's the plan they've come up with for Limestone County. They want the county to contribute some portion of the 2% sales tax that will be collected:
The 2 percent Limestone County sales tax that would be collected from the businesses in the Decatur-annexed area at Interstate 65 and I-565 is allocated for Limestone County Schools. [...]
Dr. Tom Sisk, superintendent of Limestone County Schools, was on his way this morning to meet with unknown representatives of the deal when he stopped to make a comment.
"I have never been in a situation where a school system has been asked to help with this kind of economic development," Sisk said. [...]
He did say, however, that the school system "does not have a lot of discretionary revenue."
"We are 108th in funding (statewide) and 13th in size," he said. For Fiscal year 2011-2012, the last one reported, sales tax revenue for Limestone County Schools totaled $14.67 million, according to County Administrator Pam Ball.
Shockingly, at least one County Commissioner thinks this plan is a good idea:
Limestone County Commissioner Gary Daly said the school system is likely to see an additional $1 million per year from the development and should "ante up."
Is this what we've come to? Handing money away to out-of-state companies to lure them here and then asking our already strapped local school systems to help fund it?
This is even worse than it looks. Alabama has no system to track whether taxpayers benefit from these subsidies and no mechanism in place to recoup the money if the businesses don't follow through on the agreement. Thyssen Krupp anyone?
[Recently] The Wall Street Journal reported that ThyssenKrupp, a German manufacturer, decided to sell the largest, and newest, steel plant in America. It cost $5 billion to build and has been open for less than two years. The state of Alabama gave the company $1 billion in subsidies — most of which is now gone for good. That’s a lot of money. That’s crazy money. Which raises the question: How much crazy will it take for this kind of silliness to stop?
Still waiting on Mitt Romney's "You Didn't Build That" tour to swing by all these taxpayer-subsidized developments that spread across North Alabama like poison ivy.
This looks like a sweet deal for the so-called Sweetwater development and a sucker bet for local government.
AL-05 Congressman Mo Brooks & Senators Sessions & Shelby won't listen to reason most of the time, but will they listen to Alabama clergy about the harm that "Sequestration" will cause? Possibly not, since this group of Christians, Unitarians, and Rabbis is talking about helping the poor and vulnerable - not nosing about in other people's private lives.
But at least they tried. In an open letter to Brooks, Sessions, & Shelby, ten Huntsville-area religious leaders are pleading for compromise and a solution that helps the poor and middle class instead of hurting them.
I received a copy from Rabbi Bahar, who authored the letter with input from her fellow ministers. AL.com has the entire text, but here are a few excerpts:
This crisis does not simply affect people in Washington. Families who are members of our congregations will face significant salary cuts. Some of these people are already living on the edge and cannot afford to have a reduction in their compensation. The Bipartisan Policy Center estimates that as a result of this act, 1 million people will lose their jobs, including not only government employees, but also small business owners whose clientele are government workers.
We are not arguing about the need to reduce the deficit, but simply that the use of sequestration -- a blind, massive spending cut which would hurt not only families who work as contractors but also programs affecting the poor and impoverished members of our community -- is not a responsible way of addressing the deficit situation.
Our approach to these serious problems needs to be rooted in our values of compassion and justice. We need to be good stewards of what we have. Compromise should prevail as the method to solve problems; grandstanding and the need to be correct fails to recognize the possibility that multiple approaches to problem-solving exist.
[...]
Please realize that you, as our elected officials, have been given power and a responsibility.
[...]
So we ask you, those whom we have sent to speak on our behalf, to speak loudly and clearly for the citizens of Alabama and work to resolve this impending crisis before the March 1st deadline in a responsible manner, a manner that considers the well-being of not only the citizens of Alabama, but also our entire nation.
Well said, but sadly, it will probably fall on deaf ears.
President Clinton was right: Republicans don't seem to understand even simple arithmetic - like counting votes. The House of Representatives had a meltdown last night when Republicans refused to support Speaker Boehner's "Plan B" budget proposal.
Not that any of this should bother Democrats: "Plan B" was a lousy proposal that protected the wealthy at the expense of the Middle Class. Even loading it up with bright shiny objects like
GOP intransigence has just given President Obama an even stronger negotiating hand: let's hope he plays to win.
The point of the Boehner effort was to secure passage of a Republican plan, then demand that the president and the Senate to take up that measure and pass it, putting off the major fights until early next year when Republicans would conceivably have more leverage because of the need to increase the federal debt limit. [...] That strategy lay in tatters after the Republican implosion.“Some people don’t know how to take yea for an answer,” said Representative Charlie Dent of Pennsylvania, a Republican who supported the measure and was open about his disappointment with his colleagues.
Kelly, who finally came around to supporting the plan, was incredulous, according to Republicans in the room. As others headed for the door, Kelly raced to the front of the room and grabbed the microphone.
“Really,” he screamed, according to Republicans. “We can’t support our speaker?”
Any compromise will need substantial Democratic support. Although the president needs the speaker to allow legislation to come to a vote in the GOP-controlled House, Boehner emerges in a weakened position and has little leverage to demand further concessions. His Senate counterpart, Mitch McConnell (R-Ky.), will need to decide whether to become a final line of defense against Obama or step aside for a Democratic-led plan. [...] The Boehner bill excluded other expiring provisions, including college and child tax credits, first approved under Obama in 2009. That meant that Plan B would have raised taxes on low- and moderate-income households that claim those credits.
It's looking more and more likely that there will be a leadership fight when the House reconvenes - assuming Boehner even wants the job of Speaker again.
If nothing else, this is going to be fun to watch.
This summer, I had the honor and privilege to attend Boy's State, put on by the American Legion. While I was there, I successfully ran for Governor. Right after my race, Judge Pete Johnson handed me a "Governor's Challenge". This year, the challenge was to rescue the struggling Alabamian economy and fix the structural deficit in 48 hours, while passing the plan through the AL House and Senate.
Now that the state is already buzzing about bills that could hit the floor in Montgomery in this coming session, I am anxious and excited to send our plan to leaders in Montgomery. I know that this is a very ambitious plan with some populistic/progressive highlights to it, but it passed under a Governor that posts on LIA, despite having a heavy Republican electorate (over 2/3).
Soon and very soon, the leaders of Alabama's today will have to answer the same questions that the leaders of Alabama's tomorrow (75th Boys State Delegates). "Will we divide our state's citizens socially first? or will we decide to unite them economically first?" "Will we be contempt with ranking 49th in everything other than football, obesity, and childhood illiteracy, thus spriniging 'Thank God for Mississippi'? or will we work together to bring so much good change and progress for ALL Alabamians that when all is said and done, that motto will be transformed to 'Thank God for California, New York, Texas, and Ohio' for being such great sports when they come in second behind Alabama.
Here is the link to the plan my cabinet and I passed:
Please let me know what you think. Maybe all of it can't pass in Montgomery, but any of it passing would be a win for my generation and a win for the brotherhood of the 75th AL Boys State.
Are public subsidies to corporations a smart way to encourage development (and jobs) or just taxpayer-funded corporate welfare? Louise Story has addressed this question in an excellent three part series for the New York Times, "The United States of Subsidies."
A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.
The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created.
So much for accountability. States (including Alabama) don't have information on how many jobs these subsidies bring in and how much new tax revenue they generate. And of course, the corporations aren't about to answer the basic question of would you have created these jobs here even without the subsidies?
The NYT has created a searchable database of all the subsidies they were able to identify. For Alabama, that amounts to at least $277 million -- $58 per Alabamian or 4% of the state budget. The biggest recipient of our largesse is Airbus (EADS) at $158 million. The company is locating a new assembly plant in Mobile. Would they have come to Alabama without the subsidy or with a lesser amount?
[Recently] The Wall Street Journal reported that ThyssenKrupp, a German manufacturer, decided to sell the largest, and newest, steel plant in America. It cost $5 billion to build and has been open for less than two years. The state of Alabama gave the company $1 billion in subsidies — most of which is now gone for good. That’s a lot of money. That’s crazy money. Which raises the question: How much crazy will it take for this kind of silliness to stop?
Concern over out of control subsidies is not a liberal or conservative, Democrat or Republican issue. For instance, the preceeding paragraph was penned by John E. Sununu, a former Republican Senator from New Hampshire. This is a common sense, pragmatic, taxpayer issue, not a partisan one.
Are the jobs worth the cost to taxpayers? We'll never know because Alabama has no evaluation program in place to show what we get in exchange for $277 million in corporate gifts. A recent Pew Research Center report indicates that most states, like Alabama, don't properly evaluate the effectiveness of tax incentives and other "job creation" giveaways. Our public officials are blindly throwing money at corporations and thankful to get any crumb of economic development in return ... plus a photo-op at the groundbreaking ceremony.
This is important. Every dollar spent on tax incentives, infrastructure or other giveaways to attract business and jobs is a dollar local and state governments can't spend on education, health care, transportation for the rest of us and critical government services. As the recent Medicaid funding crisis illustrated, Alabama doesn't have any dollars to spare. Incentive programs ought to be monitored to make sure taxpayers are getting a good deal, not just giving free money to corporations.
Instituting a monitoring/evaluation system to track corporate giveaways would be a much better use of our Legislature's time in the next few months than another legislative session devoted to probing ladyparts and making life miserable for immigrants.
David Lightman at McClatchy newspapers has done actual journalism and added some context to the "fiscal cliff" debate. We could paraphrase, cut and paste, but the best thing to do is for y'all to read the whole thing yourselves.
Here's a taste:
Blame them or thank them, it was the Republicans who forced a series of budget moves over the last decade that now are bringing the government to a breaking point that threatens sweeping tax increases and indiscriminate spending cuts that could plunge the country back into recession.
Part of it was a political gimmick, working the rules of the Senate to push through sweeping tax cuts in a way Republicans later would lambaste when President Barack Obama’s Democrats used the same tactic to enact the new health care law. The legislative gimmick got the tax cuts through Congress, but it made them the first such tax cuts with an expiration date. Those temporary tax cuts are expiring.
Read more here: http://www.mcclatchydc.com/2012/11/29/175922/fiscal-cliff-crisis-made-in-the.html#storylink=cpy
Surely the GOP will hate such a frank discussion of actual historical data, but it's important for the "reality based community" to have the facts.
Please read and share this whole article. Sadly, it's remarkable only because it's the context and reporting we used to expect of journalists.
The GOP propensity for denial is, well, undeniably clear and their "proposals" for avoiding the "fiscal cliff" (of their own creation) are just plain laughable. Democratic consultant Bob Shrum put it best: "You lost the election, buddy."
In this video clip, Shrum answers Senator Ron Johnson (WI-TEA Party) who had suggested the best way to save money is to "repeal Obamacare." Which mystifies those of us in the "reality based community" since the CBO concluded that repealing the law will increase the deficit:
But it did estimate that Republican legislation to repeal the overhaul — passed recently by the House — would itself boost the deficit by $109 billion from 2013 to 2022.
"Repealing the (health care law) will lead to an increase in budget deficits over the coming decade, though a smaller one than previously reported," budget office director Douglas Elmendorf said in a letter to House Speaker John Boehner, R-Ohio.
Yet, Johnson and others - including Senate Minority Leader Mitch McConnell continue to insist that Obamacare should be "on the table" during negotiations with the White House.
McCONNELL: And as Congress looks for savings, we need to look at the new health care entitlements too. While Democrats and Republicans may disagree on Obamacare, it’s ridiculous to suggest that we make changes to Medicare and Medicaid, while leaving $1.6 trillion in Obamacare spending untouched.
Is McConnell actually the Senator from Fantasyland? Could be: in 2011 his home state - Kentucky - cut spending on education, health care, and more but found an extra $37 million to fund a Biblical theme park with a 500 ft Noah's Ark replica.
Note that the Affordable Care Act isn't the only thing on the GOP chopping block. They're coming after Medicare too - just a few short months after GOP nominee Mitt Romney & Paul Ryan barnstormed the swing states continually repeating the "Pants on Fire" lie that the President "gutted Medicare to pay for Obamacare."
Republicans are proposing a “fiscal cliff” plan that revives ideas from failed budget talks with President Barack Obama last year, calling for raising the eligibility age for Medicare, lowering cost-of-living hikes for Social Security benefits and bringing in $800 billion in higher tax revenue.
That $800 billion in higher tax revenue contains "unspecified" closures to loopholes and deductions, but it at least represents a tiny, baby step toward reality. In October, the GOP was insisting that any increases in tax revenue come from "dynamic scoring:"
Boehner signaled in discussions with Obama in 2011 that he was willing to accept up to $800 billion in higher tax revenues, but his aides maintained that much of that money would have come from so-called dynamic scoring — a conservative approach in which economic growth would have accounted for much of the revenue. Now, Boehner is willing to accept the estimates of official scorekeepers like the Congressional Budget Office, whose models reject dynamic scoring.
Just so we're all clear on what's going on here....
The GOP lost the election, garnering only Mitt Romney's famous 47% of the popular vote. The public voted NO yet again on a "protect the wealthy" budget plan. Thurston Howell Romney may be home now pumping his own gas into his new Croatian-made Audi luxury SUV, but the GOP leadership is still carrying the water for their dark money masters.
So Obama is trying out a new negotiating approach. Back during the debates on the stimulus, health care and the debt ceiling, he tried to find common ground by making concessions to the Republicans upfront.
This time, Obama is trying a new tack. He opened the fiscal cliff negotiations with a maximalist bid — and a public campaign to voters outside Washington.
Predictably, the GOP whines about that. After all, why should ordinary Americans have a say in their future?
The Party of No has shown over and over that President Obama's only reward for a good faith reach across the aisle is a slap in the face. John Edwards warned about this in 2008 during the primary when he criticized candidate Obama for his "give everyone a seat at the table" plan. "I've worked with these people," Edwards said. "And if you give them a seat at the table, the first thing they'll do is eat all the food."
Here's hoping that the Democratic leadership has finally earned this lesson. It's time to let the TEA Party tiger go hungry and get on with the business of moving this country forward.
Bentley said he hopes a federal Internet tax law will be approved by 2015 so Alabama can start getting millions of dollars a year from Internet sales taxes and end the need to seek more funds from the ATF. The Internet tax is not a sure thing, however.
It certainly isn't a "sure thing" because Alabama's GOP representatives are just as deluded as the Governor. The whole group is more concerned about Grover Norquist than the citizens who elected them.
Bentley said he believes the hold-up in Alabama's congressional delegation has been a lack of education and a belief that their support of the legislation would be spun to say they're backing new taxes.
But they are softening, he said.
"I believe we have most of our House members on board. We need to encourage our senators to get on board. I think they're getting there. They need encouragement from local people," he said.
Alabama law already requires citizens to pay state taxes on their Internet purchases. There's a line item on the state income tax form for it, but Bentley admits that "few people" pay the tax. And those who don't will almost certainly view the change as a "tax increase."
So why call this a "bailout?" Because if Bentley were really serious about collecting what he says is "a tax that's already owed," then he could call the legislature into session and do it himself. California did it just a few weeks ago! This UAB study estimates the state could collect $1 billion over 5 years. Although that seems a bit optimistic, Bentley is using the study to make his case.
Let's remember the constant "gloom & doom" refrain from Bentley & the GOP supermajority prior to the September 18 vote. There was just no money, they told voters, and the only way to keep Grandma in the nursing home was to loot the Alabama Trust Fund. And now, they're touting this UAB study that shows the money was available all along - as much as $200 million/year, far more than we're sucking out of the state's savings account.
Why didn't they tap the Internet sales resource first? Political cowardice and continued dependency on the Federal government to bail out the state because our leaders can't behave like grownups.
Looks like the Alabama GOP legislative supermajority may cost the state even more money. Their inability to balance the #$$%$ budget without a voter bailout is going to cost us in more ways than one. Not only are we pulling a huge chunk out of the state savings account and thereby decreasing future revenue going into the General Fund, we may end up paying higher interest on state bonds:
Hampton said, "The state is essentially planning, at least for the next several years, to be subsidizing its General Fund operations with these funds that are not part of its normal revenues."
"It shows the state is not in structural balance. Its ongoing revenues are not supporting its normal ongoing expenses," he said.
"Obviously, if you're out of balance like that, that's a sign of budgetary stress and weakness and potentially weak management practices that are allowing that to continue," Hampton said. [...] The article said, "The state's planned multi-year use of those funds signals that its structural budget imbalance will make it difficult to implement the intended repayment. Inability to adopt a plan to return to structurally balanced General Fund operations could negatively affect the state's rating."
Credit ratings affect the state's pocketbook and, therefore, taxpayers' pocketbooks. The lower the rating, the higher the interest rate a state must pay when it borrows money by selling bonds.
"The rating matters," said John Sinsheimer, director of capital markets in Gov. Pat Quinn's budget office. "If we save money on interest rates, then we can put more money into services." [...] But financial analysts said that compared to top-rated states, Illinois is paying somewhere between 1.2 percent and 1.5 percent more in annual interest on long-term bonds.
That suggests an additional cost in the ballpark of $25 million to $30 million annually in the early years of a $2 billion bond issue. The amount would decline as the bonds are gradually paid off. That's a lot of money but not enough to have a major effect on the state budget.
Now let's remember.... the legislators asked voters to pull over $400 million out of the Alabama Trust Fund. Interest from the ATF supports the General Fund. Huge withdrawals from the AFT reduces the principal, meaning less money transferred into the General Fund. Lower General Fund revenues make it much harder to repay the "loan" from the ATF - perhaps that's why the Constitutional amendment approved by voters didn't include any repayment options....
More & more budget stress makes it harder for the state to repay its obligations, cover current needs, and borrow money for infrastructure & other vital economic development projects.
Moody's just fired a warning shot over the Alabama statehouse & governor's mansion. Will the GOP supermajority pay attention?
Well, it seems GOP nominee Mitt Romney has nothing on Alabama's own Governor Bentley when it comes to flip-flopping. If it's another day, it's a new position on Alabama's looming fiscal crisis. Bentley now says he will not raise taxes if the Sept. 18 constitutional vote fails. But just a few months ago, he said that "everything's on the table" if the amendment fails.
We go back into special session and have to deal with this issue, everything is on the table. Everything," Bentley said.
"That includes tax breaks. That includes fees. That includes taking away incentives that some of these companies have right now that they are currently enjoying," Bentley said.
Asked after his luncheon speech if "everything" would include tax increases -- something the governor has previously said he opposed -- Bentley replied, "I think the statement speaks for itself."
"I have made a promise to the people of this state that I'm not going to increase taxes on the families of this state. And I'm going to live up to my word," Bentley said in an interview.
Bentley also said he would oppose any broad-based taxes proposed in coming months and veto them if they're passed by the Legislature. The next regular legislative session starts Feb. 5. He also said his opposition to new taxes would include any proposed tax increases on tobacco or soft drinks.
You got that, voters? Bentley's going to "live up to his word" and we know what that means. Just look at recent history:
Gov. Bentley vowed to veto the "tweak" to the immigration bill. That was before he signed it.
Gov. Bentley promised to veto the budget unless Medicaid was funded. That was before he signed a budget that relies on voters to do the funding.
Gov. Bentley said that Mitt Romney should release his taxes to remove any suspension that Romney has "anything to hide." Just a day or so later, Bentley ate his words.
Gov. Bentley told us that "all options" are on the table if the 9/18 vote fails. But now it's not.
Here's a great gift suggestion for the governor & his wife. If you ever get invited to supper at their home, consider a tasteful bottle of "Flip Flop" wine. It's the gift for GOP politicians this year.
Bentley could be looking at a $184 million shortfall in the budget starting on October 1 of this year, but he has irresponsibly declared that any and all tax increases are off the table.
Democratic leaders in the Legislature are critical of Bentley's decision to tie the hands of legislators should the referendum fail.
State Sen. Roger Bedford, D-Russellville, said he believes harmful cuts in Medicaid and mental health services would follow if the referendum fails and no taxes are raised by Bentley, a Republican, and the Republican-controlled Legislature.
"They don't understand that in tough times leaders have to step forward or the taxpayers suffer," Bedford said.
...
"I'm shocked that the governor has taken such an intransigent position, and frankly, such a short-sighted and irresponsible position," [Rep. Joe] Hubbard said.
The root of this problem is that Robert Bentley, and many other Alabama Republicans, have signed Grover Norquist's no tax increase of any kind, ever, no matter the consequences pledge. And they place more importance on that pledge than they don on their pledge to serve the people of Alabama. The Republican in charge of the Alabama Senate admits the pledge to Norquist is the barrier to dealing with Alabama's dysfunctional tax structure:
Sen. Del Marsh, R-Anniston, the top-ranking state senator, said some legislators have signed a no-tax pledge. "I don't see any appetite for any type of tax increases," Marsh said.
Even Republicans are calling the Norquist pledge "irresponsible." Governor Bentley and Republican leaders in the Legislature should reconsider their priorities. Alabama is a not-very-wealthy state with declining tax revenues and an outdated tax structure inadequate for funding even a minimum level of services. In thrall to Norquist, their only plan for dealing with the shortfall is to eat our seed corn -- and let the devil take the future. Republicans are afraid to put forth any ideas for dealing with the structural deficiencies at the root of this and other budget crises.
If voters refuse to allow them to raid the Alabama Trust Fund next month, Bentley and the other Grover Norquist disciples in Alabama should resign and make way for leaders who have the courage, will and freedom to deal with the problem. Literally, lives are at stake in the state budget. It's irresponsible to delegate those decisions to Norquist, who is a lobbyist, not a public servant.
Well, this is pretty bushy-tailed, even for a deficit hawk like Mo Brooks (R, AL-05) ... especially if your district's economy runs on federal defense $$$$.
"Everything has to be cut, including defense."
Redstone Arsenal gets about $7 billion in federal defense spending and 36,000 Huntsville workers manage a whopping $100 billion in annual defense spending.
Mo is putting it all on the chopping block.
Why? So millionaires can keep their historically low tax rates ... a small fact he neglected to mention at his town hall meeting.
That's when Alabamians -- probably very few Alabamians -- will go to the polls and yes or no on whether the Legislature can raid the Alabama Trust Fund to pay the state's operating expenses.
I haven't decided how I'll vote on this question and I suspect many other progressives are conflicted as well. The Alabama Democratic Party advises a "YES" vote. One of the best progressive organizations in the state, Alabama Arise, has put together a fact sheet on the $437.4 million transfer request. Arise members will meet in Birmingham this Saturday to hammer out a recommendation on this question.
I'd much rather be voting on changes to the tax structure and am tempted to vote "NO" on principle -- after all, this is nothing more than a short-term band-aid and definitely not the right way to shore up the general fund. But the September 18th vote is a game of chicken with the extremists controlling our legislature.
Will our GOP supermajorities really hurt little children and their mothers if we don't give them the money now?
An awesome op/ed in the Montgomery Advertiser last weekend tries to remind us that being poor isn't a character flaw. It's often pure bad luck - or a result of economic policies pursued and celebrated by (overseas) "job creators" running companies like Bain Capital...
Last week, Sen. Jeff Sessions proposed a new asset test before allowing families to participate in the Supplemental Nutrition Assistance Program — food stamps, that is. Sessions tried to insert an amendment requiring the test into the new farm bill, but Democrats, thankfully, defeated the measure.
It was a stupid, mean-spirited amendment.
Because, as Sessions surely knows, many of the people who are now qualifying for food stamps are newly poor. They’ve recently lost their jobs and burned through their savings. They’re desperately trying to find work, buried under a mortgage payment and car payment they can’t make for a house and car they can’t sell.
Their homes hold assets that total more than $2,000, the federal limit for qualifying for food stamps, but those items are essentially worthless if they tried to sell them. Not to mention, there might be a burial fund or some other small savings that would prevent them from qualifying.
Just yesterday, I was talking with a friend who was trying to liquidate his mother-in-law's estate because she was having to move into assisted living. An inveterate reader and artist, the woman has literally thousands of books - with "book value" of over $10k. But when the family tried to sell them? A local used bookstore offered $100. The library said "no thanks." They finally disposed of many of the books on eBay for about $1000.
According to Senator Sessions, her books alone would have almost disqualified her for Food Stamps. Heaven forbid if she also had an old car and a flat screen TV that her grandkids had given her. OVER THE LIMIT, LADY.... hit the pawn shop & hope for the best!
That's the 2012 version of "compassionate conservatism." God help us all.
According to Governor Robert Bentley, if the GOP constitutional amendment to raid the Alabama Trust Fund fails on Sept. 18, then "... everything is on the table. Everything." That includes corporate tax breaks. So why would progressives vote yes?
The governor said that he would have to likely make 17 percent across-the-board cuts to state agencies which would have devastating consequences for Medicaid and state prisons. "But I can tell you this. We go back into special session and have to deal with this issue, everything is on the table. Everything," Bentley said.
"That includes tax breaks. That includes fees. That includes taking away incentives that some of these companies have right now that they are currently enjoying," Bentley said.
Asked after his luncheon speech if "everything" would include tax increases -- something the governor has previously said he opposed -- Bentley replied, "I think the statement speaks for itself."
Well duh.... does the Governor support tax reform or not? Is he willing to ask those who benefit the most from the state's outdated tax code to actually begin contributing more to support the common good?
Or perhaps it's just fear mongering... maybe our governor has no more influence with the electorate than he has with his own legislative supermajority. In fact, Bentley's reputation for legislative impotence has spread far and wide, as this article from Missouri highlights:
“I’ve been disappointed in a lot of things the Senate has done or not done,” said a deflated Robert Bentley, Alabama’s new Republican governor, whose centerpiece job creation program was killed in the Republican-controlled chamber.
What is it Governor? Will you gut essential social services because you're too much of a damn coward to ask out of state timber companies and the wealthiest in the state to pay their fair share? Or will you "put everything on the table" and challenge your own party to face the hard truth that their doctrine of Social Darwinism is going to kill off many of their most ardent voters?
Governor Bentley would do well to heed the words of Rep. Joe Hubbard:
Hubbard said after the speech that he thought some politicians were trying to use the referendum as “political cover” for difficult choices, and he said the talk of draconian cuts essentially were “threats” to persuade people to vote for the referendum. “With all due respect to the governor, that is not leadership,” Hubbard said.
Need help getting your pension, health services or disability? You're on your own, soldier! Here, have a sticker for your license ... maybe it will get you free coffee at McDonalds.
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Are public subsidies to corporations a smart way to encourage development (and jobs) or just taxpayer-funded corporate welfare? Louise Story has addressed this question in an excellent three part series for the New York Times, "
In this video clip, Shrum answers Senator Ron Johnson (WI-TEA Party) who had suggested the best way to save money is to "repeal Obamacare." Which mystifies those of us in the "reality based community" since the CBO concluded that 
That's when Alabamians -- probably very few Alabamians -- will go to the polls and yes or no on whether the Legislature can raid the Alabama Trust Fund to pay the state's operating expenses. 
Just yesterday, I was talking with a friend who was trying to liquidate his mother-in-law's estate because she was having to move into assisted living. An inveterate reader and artist, the woman has literally thousands of books - with "book value" of over $10k. But when the family tried to sell them? A local used bookstore offered $100. The library said "no thanks." They finally disposed of many of the books on eBay for about $1000.
Gov. Robert Bentley closed 
