Alabama Gov. Bob Bentley made a wise move last week after getting the public’s attention.
Initially, Bentley announced that Alabama would be shutting down 15 of its 22 state parks by May 1. Call it a revenue grab through cost-saving to offset an anticipated $700 million shortfall in the state’s general-revenue fund. The shutdown list included (1) Cheaha in east-central Alabama, where the state’s tallest mountain is located along with worthy hiking trails, rental cabins and some of the state’s prettiest sunsets; (2) Lake Lurleen near Tuscaloosa and the University of Alabama; (3) Lake Guntersville southeast of Huntsville, and (4) Joe Wheeler north of Decatur – these latter two parks being most-excellent jewels in Alabama’s park system. Another jewel, Gulf State Park on the South Coast, would not have been affected, largely because of the park’s lucrative revenue from a steady, year-round flow of rental fees for campsites that are but a stone’s throw from the Gulf of Mexico’s sandy beaches.
Gov. Bentley’s rational for closing the 15 parks was that none of them was paying for itself. Perhaps he was playing a little politics, proposing a move against “in the red” facilities popular among a limited but vocal sector of the tax-paying public. In any case, Bentley might as well have swung a stick to a hornet’s nest.
Last week, Alabama’s governor backed away from the state parks, delaying the closures indefinitely after his office was besieged by letters, telephone calls, e-mails and texts to leave the park system alone. That was a wise decision.
Now he has put an eight-point plan on the table that includes (1) taxing Alabama-based corporations not only on their transactions in Alabama, but also on their income derived from sales in other states; (2) cutting tax breaks for financial institutions, insurance companies and municipal utilities; (3) increasing the sales tax for automobiles from 2 percent to 4 percent; (4) increasing the cigarette tax from about 43 cents a pack to $1.25 a pack, and (5) invoking a 5 percent tax annually on the defined-benefit pensions of all retired Alabama residents – even those who established residence after moving here from another state.
Combined, these proposals total about $540 million in savings. So, where does Bentley get the remaining $160 million to balance the budget in a state that ranks dead last among the 50 states on per capita tax collections?
Hopefully, he won’t parrot the move of Wisconsin’s Gov. Scott Walker, who invoked delays in state debt payments to achieve balanced budgets. Walker’s moves are delaying the inevitable, and he hopes the inevitable won’t happen before Wisconsin’s economy rebounds enough to provide a plethora of tax revenue. Thus far, Walker’s “scoop and toss” strategy has put Wisconsin more than $1.5 billion further in the hole since 2001.
Gov. Bentley has other options to consider. Nowhere in his plan does he mention a crackdown on fraud and waste in state government. Medicare and welfare fraud likely abound in Alabama just as much as they exist in other states.
Why not deflate exorbitant bureaucratic salaries? Take university administrators, for example. The president at Auburn University is paid $500,000 annually, another $250,000 annually that is deferred and paid every five years, plus another six-figure bonus every year. At the University of Alabama, the salary story is much the same.
Moreover, how do you validly explain a former University of Alabama Birmingham president being paid more than half-a-million dollars in compensation the year AFTER she left the school, plus an additional $400,000 that never has been explained to the public. Was it a “contract fulfillment” thing? If so, somebody at the outset failed to put some crucial terms into the contract’s fine print.
Think of how much administrative bloat there must be beyond these three top administrators. There are dozens of chancellors, provosts, vice presidents, directors and other administrators on campus.
Moreover, the university system is just one cog in the state’s bureaucratic wheel. Who’s minding the fiscal stores in the other agencies and departments?
Gov. Bentley makes no mention of overpriced state contracts. For example, Alabama ranked 21st in the national Reason Foundation’s 21st Annual Highway Report last year. The top five states and their cost-per-mile efficiency quotients were: South Carolina ($39,403); West Virginia ($39,883); North Carolina ($52,282); South Dakota ($54,834), and Nebraska ($65,872). Meanwhile, Alabama spent an average of $150,998 per mile. The differences in efficiencies, according to the foundation, are rooted in bid procedures and up-front administrative costs. It would be nice if Gov. Bentley could somehow move Alabama into the top 10, saving millions of state dollars in the process.
Again, state roads comprise only one department in which contracts are the norm.
To Gov. Bentley’s credit, he is trying to overcome Alabama’s unfair tax structure. But “bring home the bacon” politics in the Legislature are thwarting most efforts at reform. Until the state’s tax inequities are addressed and re-balanced, Alabama will continue to remain at the bottom of the list for per capita tax collections, sowing the seeds for further budget shortfalls and forcing state-level sacrifices that Alabama taxpayers might not want to stomach.
Finally, if Alabama’s elected and appointed bureaucrats can work smarter at improving efficiency across the board, perhaps the state will eliminate the chance for future budget shortfalls.