At the Bevill State Community College cafeteria in Jasper, Sherer said the state legislature faces hard choices regarding gambling, immigration and campaign finance and ethics. He told the club members, however, the biggest problem lawmakers must tackle is the state’s budget.
Sherer said Alabama’s general fund recently hit 20 percent proration.
“That is unprecedented,” he said.
Sherer added the number has decreased to 12 percent proration due to additional federal funds the state recently received.
The general fund is used for all public services aside from education. Sherer said the state faces a $160 million hole in Medicaid funding for the next year, and he expects to see that deficit at $260 million by 2012.
Sherer said the state’s schools are in the same shape, too. Joe Morton, the Alabama Superintendent of Education, told Sherer that 30 school systems are in such financial chaos that their boards of education have given financial control to the state, Sherer said. Alabama residents might see that number double by next year, Sherer added.
Sherer said there is little chance to see significant budget improvements in the next few years.
“The economy would have to jump 20 percentage points to get us back to where we were in 2004,” he said.
Sherer said sales tax and income tax revenues either remain static or continue to decrease, and the main tax base for the state will continue to be property or ad volerum taxes.
Sherer also told the Kiwanis Club that a bill outlawing PAC to PAC transfers is necessary for Alabama residents to ever see significant improvements in the legislature.
He shared a story in which he was offered a campaign contribution by someone he did not want to be associated with. Sherer said he explained his hesitation in accepting the funds, but the person told him the money could be transferred through several PACs and no one would ever know. Half of the crowd scoffed as he recalled the incident.
Sherer said he would like to point out that, when ethics bills fail to pass, the news media blame the entire legislature. He said the Senate is almost always the reason for the stalled measures.
“We pass them,” he said, referring to the House of Representatives.
Sherer also said gambling will be another major upcoming issue. Both candidates for governor say they will support a public vote on the legality of gambling in Alabama.
Sherer said that concerns him because he is certain state residents will approve the measure. He said he worries about the economic toll that families will face when their loved ones use grocery money to gamble.
Sherer said the state legislature will likely encounter issues if it passes an immigration bill. He said, if the government in Washington does not revamp its immigration policies, many state laws may end up conflicting with federal statutes.
“That is basically the terrible report I have for you this morning,” he said.