By Associated Press
Montgomery AL – The Alabama House debates next year's operating budget and General Fund for non-education agencies on Tuesday, with two key officials doubtful that revenue sources will generate needed funds.
State Finance Director Jim Main said he doubts that a reserve of business tax collections will be able to provide $126 million for the General Fund next year, as assumed by the operating budget approved Wednesday by the House Government Appropriations Committee.
State Rep. John Knight, D-Montgomery, said he doubts that a giant state savings and investment account will provide $117 million for the General Fund next year, as assumed by the operating budget proposed in February by Gov. Bob Riley.
The General Fund is expected to provide $1.846 billion. Riley's proposed operating budget would spend $1.952 billion from the General Fund next year, an increase of 5.7 percent. But his budget counts on the General Fund getting $117 million in capital gains from the Alabama Trust Fund a giant savings and investment account for the state that now has about $3.2 billion.
The trust fund collects and invests most of the royalties paid to the state by companies that pump natural gas offshore. State law allows, but does not require, the nine-member board that oversees the trust fund to transfer capital gains to the General Fund.
The General Fund got $23.6 million in capital gains from the trust fund in October 2003; $21.4 million in October 2004; $31.9 million in October 2005; $35 million in October 2006; and $117 million last October.
Riley is counting on another $117 million payment in October, the first month of fiscal 2009.
Knight told The Birmingham News in a story Sunday that he's unsure the General Fund will get that much, given the track record of payments since 2003 and recent ups and downs in stock markets.
"I'm not sure that ... will be available," said Knight, who chairs the Government Appropriations Committee.
The committee on Wednesday revised Riley's spending plan and approved its own version of next year's operating budget and General Fund. It's a two-tiered budget. It sets a base spending level for agencies that assumes the General Fund will get no capital gains next year.
In that case, the budget would appropriate $1.90 billion from the General Fund next year, an increase of $53.6 million, 2.9 percent, from this year. The budget also sets a maximum spending level that assumes the General Fund will get $109.1 million in capital gains next year, a bit less than Riley forecast.
In that case, state agencies would get $2.01 billion from the General Fund next year, an increase of $162.7 million, 8.8 percent. If the trust fund board were to transfer some amount less than $109.1 million to the General Fund, the money would be added proportionately to the base spending level of most agencies.
Just as Riley banked on capital gains in writing his proposed budget, the committee in drafting its budget banked on a $126 million transfer next year from a business privilege tax escrow account to the General Fund.
But Main said he doubts the account will have that much money to transfer.
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Information from: The Birmingham News