Voters pass measure to dip into Alabama Trust Fund
Published 1:18 pm Wednesday, November 5, 2008
Alabama voters have approved an amendment that allows state officials to dip into the Alabama Trust Fund to plug budget holes.
Amendment One was passing with 57 percent of the vote with 96 percent of precincts reporting statewide early Wednesday morning.
The amendment expands the state’s rainy day fund for the education budget and creates one for the General Fund budget by borrowing money from the Alabama Trust Fund.
Gov. Bob Riley and education officials including State Superintendent Joe Morton said the passage of Amendment One is crucial to minimize across-the-board cuts in education.
But some opponents say the revision amounts to a bailout for politicians who have made a mess of state finances.
The trust fund is a $3 billion state savings account started by Gov. Fob James and receives part of the royalties from natural gas wells drilled in state-owned waters along the Alabama coast.
State officials will now be able to dip into the two rainy day funds to prevent budget cuts when state tax collections fall below expectations, but they will have to pay back the borrowed money in future years.
Opponents worry the change would force legislators to boost taxes in order to raise the money to repay the withdrawal. The payback time is six years for the education budget and 10 years for the General Fund budget.
The amendment was the only one that affected Alabamians statewide, but there were five others on the ballot.