Will Alabama Vote to Transfer Funds from the Alabama Trust Fund?

First, a little history.  In 2010, Alabama’s legislators proposed an amendment to Alabama’s constitution that would have transferred $100,000,000 a year for ten years from the Alabama Trust Fund “to provide for a ten year road, bridge and other transportation related construction and improvement program.”  Because the ATF was set up as a permanent, irrevocable trust under the state’s constitution, funds could not be taken from the trust except in accordance with the language in the constitution itself.  So when the state found itself strapped for cash and in need of road repair funds, it could not simply drain the fund.  Two things were required: first, 3/5ths of the Alabama State Legislature would have to approve the amendment, and second, the amendment would have to be placed on the ballot and approved by a majority of the state’s voters.  The legislators approved the amendment, but voters did not:  

Amendment 3 (Road and Bridge Construction)
Result Votes Percentage
 No 702,340 57%
Yes 530,017 43%

So in 2012, we see the same kind of drama unfolding again: a state desperate for funds and legislators “reluctantly” seeking to transfer funds out of the ATF.  Call me cynical, but I suspect that Alabama’s governor and its legislators learned their lesson from the 2010 vote.  Instead of seeking funds for roads, why not seek funds for Grandma?  The ballot measure this time around is entitled the “Alabama Medicaid Amendment, Amendment 1“, as opposed to 2010’s “Alabama Ten Year Road and Bridge Construction Program, Amendment 3.”  The amount sought by the 2012 Amendment is larger on a per-year basis ($145.8 million), but would only draw funds from the ATF for the next three years. 

I could be wrong, but I will be surprised if the amendment passes when it goes up for a vote on September 18.  I also applaud the enshrinement of the ATF in Alabama’s constitution.  As I discuss in my paper on U.S. permanent trust funds, it is exactly for the purpose of guarding against short-term political opportunism and encouraging budgetary diligence that most of these types of funds are created under the state constitution (the amendment of which requires approval of the state’s voters) rather than existing merely as creatures of statute (the amendment of which requires approval by the legislators only).


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