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required to have a balanced budget. In
Washington you can go into a deficit, but Alabama's
Constitution says you can't.
He asked how many people heard the
Governor's address; and was amazed how many people
listened. Governor Riley said the
state budget it $500 million short. The
funds needed to relieve prison over crowding is not
factored into the $500 million. The Legislature needs
to come up with cuts in spending or come up with 1/2
billion more dollars. Neither one of these is an
attractive option.
While everyone cries pork spending,
special projects, in truth
it is part of the game down there. No
official will say a project he is pushing for is pork;
it is an investment. As Trent Lott said once, "Pork is
anything north of Memphis". Consider a bridge in
Huntsville over a small river. Folks have to drive 10
miles out of their way to get into town. People from
that district called a legislator and said they needed
a new bridge. So the legislator puts in a bill. The
rest of the people in the state says it's pork.
In the state legislature and Congress
all projects are deemed important. All spending is put
in one big bill. The action is not do we approve of
this bridge, etc., but does someone want to come after
and take it. There is a gentleman's agreement in
Montgomery and Washington, if you don't attack my
project, I won't attack yours. An example of
what the federal government spent dollars on last
year; $1 million were spent on Bear DNA sampling in
Montana; $6.2 million spent for wood Utilization
research; $250,000 for wine research at UC Davis;
$7 million for something called
"Exchanges With Historic Whaling and Trading Partners"
and $5 million for McGruff the Crime Dog. All these
projects have supporters.
This legislature will be dealing with
budget problems and here will probably be one or more
special sessions. Governor Riley is going to submit a
tax reform bill. People who earn $4,600 per year are
taxed by the state. This year that figure may be
changed to a 5 digit figure.
One thing that will be looked at is the
nontraditional financial services; check cashing. The
problem as seen by the legislature and AARP , is the
way people get pulled into these services and can't
get out. A person needs $100 so they write a check for
$100 they don't have. The check casher writes a check
for $115, the person gets $100. The check casher will
hold a check for $115, $15 for the loan. When the week
ends the person can't pay the loan, so $15 (15%) is
added on. The APR becomes 300, 500 even 800% for the
$100 loan. People who get these loans are called
financially under served by the U.S. Government. It is
estimated 90 million people are in this group. Last
year 223 credit unions across the country adopted 440
under served areas and brought financial services to
23 million people. This was done without government
regulations. |
