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April 16, 2004   Email to Friend 

Committee passes bill to cap spending

A Senate committee passed a bill this week that could be viewed as the only “real” accountability bill to pass out of committee this session.

The measure sets spending limits based largely on last year’s tax revenue for the state’s two main budgets - the General Fund, which provides money for most public services, and the Education Trust Fund, which allocates money for schools. The bill also creates a special rainy-day fund that allows the state to save money for times when tax collections fall below expectations, hopefully reducing the likelihood of prorating state budgets.

The Senate Fiscal Responsibility and Accountability Committee voted 6-1 for the legislation that was sponsored by Sen. Steve French, R-Birmingham.

The bill was backed by the Alabama Farmers Federation and other members of the Foundation for Educational and Economic Development.

The House version of French’s bill, HB 619, is pending in the House Education Finance and Appropriations Committee and has not come up for a vote.

With two-thirds of the current legislative session exhausted, many of Gov. Bob Riley’s “government accountability” proposals have been killed by legislative committees.

“We’re pleased with the vote by the committee and are hopeful that the bill will be approved by the entire Senate,” said Federation Governmental Affairs Director Freddie Patterson. “We can’t have true government reform until the state budgets are brought under control. This is certainly a step in the right direction.”

If approved by the Legislature, voters will still have to approve the constitutional amendment to enact the legislation. The bill establishes a formula for determining how much money will be available each year for the Legislature to appropriate to the General Fund and the education budget.

French told the Associated Press that the legislation won’t totally prevent proration or across-the-board cuts of the state budgets when tax collections come up short, but it would greatly reduce the chances of proration happening. Sen. Jeff Enfinger, D-Huntsville, cast the only vote against the bill. He called the bill a “simplistic” approach to budgeting without flexibility.

“That flexibility is what has caused state budgets to get out of control,” Patterson said.


House passes tax increase for tobacco and nursing home beds

The Alabama House of Representatives approved two bills this week that would increase the tax on nursing home beds and would double the state tax on cigarettes.

The House voted Tuesday to increase the tax on nursing home beds by $700 each – from $1,200 to $1,900 per bed, per year – and is the first major tax measure to pass the House this session. The nursing home tax increase, HB 266 passed the House on a 62-25 vote. It is expected to raise about $16 million for the state’s General Fund. The bill has been assigned to the Senate Finance and Taxation General Fund Committee.

The House rejected several bills last week that were proposed by Gov. Bob Riley that would have raised fees for various state services and would have provided money for the state’s General Fund which is expected to have a shortfall of nearly $300 million.

The nursing home tax increase bill was sponsored by Rep. Mike Hubbard, R-Auburn, who said the money from the tax increase would go to Medicaid.

Federation Director of Governmental Affairs Freddie Patterson described the nursing home bed tax and the tobacco tax “the least objectionable” tax increases the Legislature will consider. However, he added, Alabama voters still want reform before spending increases. “Both of these tax increases are aimed at shoring up the state’s Medicaid budget, but there needs to be more emphasis placed on reform before spending of any kind is increased.

Rep. John Knight, D-Montgomery, sponsored the tobacco tax increase bill, HB 716 that was approved by the House on a 52-42 vote. Knight’s bill will double the state tax on cigarettes and if approved would take affect Sept. 2. It also increases the tax on cigars by 4 cents each and the tax on chewing tobacco products by 1.5 cents per ounce.

The plan is expected to raise an estimated $57.9 million a year and now goes to the Senate. If it becomes law, the bill would cap local tobacco taxes at the highest amount in effect in the state on Sept. 1.

The tobacco bill proposes the largest tax increase approved by the House this year. Tax bills must pass the House before they can be considered by the Senate.

The General Fund budget is expected to spend $1.27 billion this year, but next year Alabama will lose a $75 million federal windfall and $89 million in extra federal Medicaid support that it received this year.


Minimum school tax bill passes committee

The House Education Finance and Appropriations Committee passed a bill that would require all county and municipal school systems to collect a minimum of 10 mills of ad valorem taxes for education.

HB 714 would increase property taxes for 31 school systems in 25 Alabama counties if voters approve a constitutional amendment. Local education funding now comes from either ad valorem taxes or an equivalent amount of sales or other taxes.

Proponents of the bill say higher property values are drawing money for education from sales tax revenues needed for other local services. The bill requires school systems not collecting 10 mills of ad valorem taxes to increase millage rates, but not to reduce “equivalent” taxes. The bill would generate about $14.7 million more money for education. Local property taxes approved by voters would be credited toward the 10-mill requirement.

Rep. Richard Lindsey, D-Centre, sponsored the bill, which is backed by House Speaker Seth Hammett, D-Andalusia. The Federation has not taken a position on the bill, but will oppose the measure if it’s amended in the legislative process.


Committee suggests study of wildlife feeding

A senate joint resolution was introduced on Tuesday by Sen. Myron Penn, D-Union Springs, to create a committee to study issues relating to the Alabama Conservation Department. The resolution was passed by the Senate on Tuesday and was approved by the House Rules Committee on Wednesday.

The resolution should have been before the House for final passage on Thursday but was recommitted to the Rules Committee after some objection was expressed by the House membership. Sen. Penn will appear before the House Rules Committee again on Tuesday for possible approval and the resolution could be placed on the calendar for final passage on Thursday. The governor, conservation commissioner, Wildlife Federation and the Alabama Farmers Federation support the resolution.

The study committee will consist of 11 members who are interested stakeholders. They will be appointed by various state leaders, and the conservation commissioner will serve as chair of the committee.

The purpose of the committee is to study all facets of the Alabama Department of Conservation and Natural Resources and applicable statutes related to wildlife management, harvesting, and supplemental feeding. The committee also will recommend appropriate changes before the next legislative session.


House committee passes home rule bill

SB139, a limited version of home rule sponsored by Sen. Lowell Barron, D-Fyffe was passed by the House Constitution and Elections Committee this week with amendments that restrict powers of county government over utilities. The bill has been placed on the House calendar and could be voted on next week. “We won’t pass a home rule bill without the Alabama Farmers Federation’s support” said Sen. Lowell Barron, D-Fyffe.


BILLS IN BRIEF

Family Farm Preservation Act – SB 261

Sponsored by Sen. Zeb Little, D-Cullman, no action was taken on the bill this week. Farmers and other ag leaders gave compelling testimony last week before the Senate Judiciary Committee in favor of the bill. AFF SUPPORTS.

Shrimp & Seafood Checkoff HB 267-268

Allows members of the shrimp and seafood industry to establish a checkoff program. The second proposed bill is the enabling legislation. The bill has passed by the House and Senate and is expected to be signed by the governor. AFF SUPPORTS.

Ag Department Fees – HB 370

The bill would increase fees for the Department of Agriculture and Industries. Sponsored by Rep. Joe Carothers, D-Dothan, the bill passed the House and has been assigned to the Senate Economic Expansion and Trade Committee.

Catfish Weighing Bill – SB 382

Sponsored by Senators Charles Steele, D-Tuscaloosa and Zeb Little, D-Cullman, would standardize Alabama’s catfish weighing practices with those of other states. It requires processors to use a weighing device that would electronically print data that includes processor and producer information. The bill will be before the Senate Agriculture, Conservation and Forestry Committee Wednesday. The House companion bill, HB 541, sponsored by Rep. Bobby Singleton, D-Greensboro, is awaiting action by the full house. AFF SUPPORTS.

Anhydrous Ammonia – HB 162

Sponsored by Rep. Ron Johnson, R-Sylacauga, HB 162 defines the term “anhydrous ammonia” and makes it a crime to unlawfully possess anhydrous ammonia for illegal drug purposes. This bill has a provision that protects production agriculture in relation to possession of this chemical. The bill passed the House and is awaiting action in the Senate Judiciary Committee. AFF SUPPORTS. COOL -HB 606 Requires grocery stores to furnish country of origin labels for fruits, vegetables and honey grown outside of the United States. The House Agriculture and Forestry Committee has approved the bill. It now heads to the full House. AFF SUPPORTS.

Public Timber Sales – HB 33

Sponsored by Rep. Allen Layson, D-Reform, HB 33 allows timber on public lands to be sold as surplus property without bidding. It increases the minimum sale allowed without bid from $500 to $25,000. The bill passed the House and is awaiting action by the Senate. AFF SUPPORTS.

Shellfish Restrictions– HB 206

Establishes penalties for the direct retail sale of shellfish treated with certain veterinary drugs. In addition to shellfish, the bill includes all wild fish and farm-raised fish. The bill was passed by the House Agriculture and Forestry Committee and awaits action by the full House. AFF SUPPORTS.


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