Rep. Jay Love, R-Montgomery, has filed legislation that would require the state to pay back $437 million borrowed from the Alabama Trust Fund by 2026.
The legislation would establish benchmarks for repayment of the money, taken to shore up the state’s troubled General Fund, which pays for most noneducation funding in the state. About $145 million was transferred from the ATF into the General Fund for the current fiscal year; additional transfers are scheduled for FY 2014 and FY 2015.
Voters approved the measure by a nearly two-to-one margin in a special election on Sept. 18, though the proposal aroused anger from some conservative groups.
Both Democrats and Republicans have said paying the money back will be a priority. House Speaker Mike Hubbard, R-Auburn, said earlier this month the legislation would be the first general bill to come to the floor.
If the legislation is approved, the General Fund would be required to put at least $5 million into the Alabama Trust Fund by Sept. 30, 2014. Obligations of payment would increase by $5 million per year until FY 2025, when the General Fund would have to put at least $60 million into ATF, if its cumulative payback at that point did not reach $390 million.
Love said there was nothing to prevent the Legislature for paying the full amount back to the ATF before the 2026 deadline, if the funds were available.
“This is a definable and legal schedule,” he said. “If passed, we’ll have to adhere to it. The ATF will be paid back.”
The General Fund typically finds itself in a tight spot each year, due to ever-increasing Medicaid and Corrections costs and generally flat revenue growth. Love acknowledged revenue for the fund was a “challenge,” but believed cost-cutting measures would help free money to pay back the ATF.
“We will see costs in some areas of state government go down significantly, and that will free areas to pay back to the Alabama Trust Fund,” he said.
– posted by Brian Lyman