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In Alabama, Even a 6.8% Spike in Education Funding not Enough

Lee Schalk
July 10, 2012

Last week, startling news for taxpayers emerged from the Heart of Dixie. From October to June, tax collections for Alabama’s Education Trust Fund totaled $4.25 billion, representing an increase of 6.8 percent. This is an increase of $269.9 million from the same period a year earlier. This extra revenue should be more than enough to support Alabama’s public schools and colleges, right?

Not so fast! Turns out state lawmakers budgeted for $5.67 billion to be spent from the trust fund’s coffers by the end of the fiscal year, representing an additional 6.3% on top of the steadily growing tax collections. This is the same trust fund from which tax credits for production companies filming in Alabama will be drawn after a Senate panel approved an increase this March. Apparently state legislators are still bitter that Forrest Gump and Sweet Home Alabama weren’t filmed on location and they want to ensure that such a travesty never happens again.

That tax credit isn’t the only one drawn against revenue in the “Education” Trust Fund. During the 2011 legislative session, the Alabama Senate approved credits for industrial projects as well. These tax credits were expected to total $80 million per year.

Alabama’s economy, like most states across the country, is struggling and taxpayers are suffering under the weight of a government that grew by a staggering 30 percent from 2000-2010. Instead of implementing wide-ranging tax reform that lowers burdens on all businesses and individuals and using the Education Trust Fund for, you know, education services, the state has chosen to draw it down in part for the creation of a slew of tax credits that try to pick winners and losers.

Taxpayers should rightly be angry with their representatives. When revenue jumps 6.8 percent and it’s still not enough to fund the spending budgeted by the legislature, you have a spending problem.


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