Executive Director's Report- Legislative
Preview Issue 2003
Next General Fund Budget WILL Affect
Counties
Governor Bob Riley, on October
23, 2003, issued Executive Order No. 12, which created
the Commission on Efficiency, Consolidation, and Funding
(the Commission). The Commission was created for the primary
purpose of making recommendations to the Governor concerning
how to address the serious financial condition of the
State General Fund. It was comprised of 37 individuals
representing the public and private sectors. It was my
pleasure to serve as a member of the Commission.
The Governor's charge to the
Commission was as follows:
"… to examine the
general agencies and func- tions of state government,
excluding education; to establish the essential purposes
of government, to consolidate functions and agencies,
to end dupli - cation, to streamline processes, to cut
costs and to establish fair and effective funding mechanisms
for necessary services."
The Commission was divided
into five committees: Government Operations & Accountability,
Commerce, Health & Human Services, Environment &
Natural Resources, and Public Safety. The committees were
asked to analyze the various agencies and entities funded
through the State General Fund and make recommendations
for reform to the Commission as a whole and ultimately
to the Governor.
I was asked to serve on the
Public Safety Committee. It was appropriate for me to
serve on this committee because it examined many of the
agencies such as the Department of Corrections, Department
of Youth Services, Board of Pardons and Paroles, and several
others whose activities have direct fiscal impact on county
government. Our committee spent five Fridays receiving
testimony from numerous agency or department heads. The
fiscal picture painted for the committee was not a pretty
one. It did not take the committee members long to recognize
that the vast majority of the agencies under our purview
are essential functions of government and that consolidation
with other agencies or streamlining will not produce any
significant savings.
We learned that these agencies
have for years been suffering from inadequate funding.
The process solidified in my mind what I already knew--if
many of these agencies are not adequately funded in the
future they will have to turn to counties for additional
resources. This is already happening in several counties
where county commissions have recently had to make special
appropriations to the judicial function in their counties
because of cuts in the 2003-2004 General Fund Budget.
A Final Report from the Commission
was submitted to Governor Bob Riley on January 12, 2004.
In his cover letter, Commission Chairman Michael Warren,
Jr. wrote:
"Unfortunately, we did
not find the 'silver bul- let' answer to the financial
problem facing the General Fund. And any substantial cost
cutting in the 50 percent range that has been mentioned
would result in serious and detrimental impacts on state
government's ability to provide core func- tions. On the
other hand, however, we firmly believe that if the short
term and long term recom- mendations we have made were
implemented, lit- erally tens of millions of dollars could
be saved through more efficiency, needed consolidation,
better strategic planning, and reduced duplication."
In order to understand the
impact of the Chairman's statement, several important
facts must be pointed out. First, depending on whom you
talk to and how you assess needs, the State General Fund
needs some amount in excess of $300 million in order to
fund the State General Fund at the Fiscal Year 2003-2004
level, and that level will not fund the General Fund agencies
at appropriate levels. Second, it is generally accepted
that if substantial increases in General Fund revenues
are not generated many state agencies will experience
cuts as large as fifty percent in the budget to be adopted
for the 2004-2005 year. Third, and complicating matters
further, is the fact that additional revenue must be found
to fund increases in health insurance and retirement benefits
for state employees and increases in Medicaid program
costs. Finally, when all the numbers are compiled, the
legislature will find that in order to adequately fund
General Fund needs, an additional $500 to $600 million
must be found.
The Final Report submitted
to the Governor did not suggest any measures to raise
revenue. By the Chairman's own admission, the recommendations
of the Commis-sion will result only in the savings of
"tens of millions of dollars" when the State
General Fund needs hundreds of millions of dollars.
When the Alabama Legislature
returns to Montgomery this year it certainly should consider
implementing "cost-cutting" measures similar
to those recommended by the Commission. Many of the Commission's
recommendations are sound and would no doubt produce costs
savings for the General Fund. The Legislature will, however,
not be able to avoid the reality that it will have to
find additional revenue if it is to adequately fund governmental
services provided through the State General Fund.
It would take considerably
more space here to discuss the impact on state government
services if the legislature adopts a 2004-2005 General
Fund Budget based solely on existing revenue. It is appropriate,
however, to predict the impact on counties. If additional
revenue is not generated for the State General Fund, the
Alabama Court System will be seriously under funded. Local
court officials will turn to county commissions for funding.
They will approach particular county commissions and predict
that if the county does not come up with money, the conduct
of criminal cases will slow down and that will result
in a back log of criminal defendants in the county jails.
They will also predict that deputy sheriffs will have
to serve as bailiffs for judges thereby taking them away
from routine duties, not to mention associated overtime
costs. The Alabama Department of Forensic Sciences will
fall further behind on its case load thereby causing more
criminal defendants to sit in jail waiting for trial.
If the Alabama Department of Youth Services is not adequately
funded, it will be unable to accept juveniles into its
system in a timely manner resulting in them remaining
in local custody for longer periods of time. And of course,
if funding for the Alabama Department of Corrections is
not adequate, state prisoners will start backing up in
county jails. There are other state agencies that provide
services at the local level that will no doubt turn to
county commissions for additional funds.
County Government has a big
stake in whether or not the legislature adequately funds
many state government functions. County Commission members
should take every opportunity to inform members of their
legislative delegations of the potential financial difficulties
that counties may face if the State General Fund is not
adequately funded.
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