From: Senator Chambliss
The 2020 Regular Session will go down as one of the strangest in recent memory. Because of the COVID-19 pandemic, the legislative session was abruptly halted before concluding with a week-long push to complete the Education and General Fund appropriations. Many good bills were left hanging. But fortunately, my bill to create a Reserve for the State General Fund passed both chambers of the Legislature and the Governor has signed it into law. Creation of this reserve is crucial to our financial stability when faced with unforeseen challenges. We only need to look at the benefit the Education Trust Fund received from its reserve this year for confirmation.
Although a budget reserve bill did not grab the headlines other things did, it is perhaps the most long-lasting thing we accomplished in the abbreviated session. This budget reserve will positively affect the lives of everyone in this state by setting aside funds for a rainy day. Our General Fund budget provides funding for Alabama’s most important agencies including the Judiciary, State Troopers, Medicaid, Corrections, Mental Health, and Public Health services. An unexpected shortfall is crippling without a safety net. Our efforts today being to create that infrastructure.
I would like to thank Rep. Danny Garrett who played a vital role in drafting and passing this legislation by serving as House co-chair of the Joint Task Force on Budget Reform and carrying the bill in the House. The task force, created in 2016, has been studying state government, ways to improve upon government efficiency, and methods to stabilize the budgets.
This year has illustrated the importance of a strong reserve fund because events transpire in the world that are difficult to control. Fortunately, because of our already conservative budgeting practices, Alabama has thus far absorbed the impact to our budgets of income lost due to the COVID-19 outbreak and the subsequent restrictions. Alabama was still able to provide funding for our critical services to remain in place during a time when cuts would have been disastrous. Other states, including some of our neighbors, are not so fortunate.
Starting October 1of this year, 20% of money that the state receives that is not allocated in the General Fund Appropriation Budget will be set aside into a Reserve Fund. This will happen every year until we reach roughly 5% of our annual General Fund total. This reserve cannot be touched unless it is voted on by the Legislature to fill holes in our budgets due to unforeseen circumstance, such as we have seen this year. Our goal is always to avoid proration which would cause a financial crisis with vital agencies and services that impact all of us.
As your Senator, I am not finished. I will continue to push for sound planning and fiscal responsibility. Securing the financial state of Alabama for future generations is the most important thing we can do to bring progress and growth for everyone.
Thank you for allowing me to serve you in Montgomery!