SPECIAL CONSTITUTIONAL AMENDMENT ELECTION

TUESDAY, SEPTEMBER 18, 2012

Alabama faces a crisis in funding for the fiscal year that begins in less than a month. Projected revenues from current taxes fall far short of meeting the expenditures in the General Fund budget. Over half of that budget is for health services and public safety expenditures. This vote allows citizens to vote on whether to use additional funds in the Alabama Trust Fund, the state’s savings account, to meet the shortfall in revenue

The only amendment on the ballot on September 18 is one dealing with how and when money is distributed from the Alabama Trust Fund. The necessity for this special election is that the 2012 budget goes into effect on October 1, and the constitution requires it to be balanced. If money cannot be taken from the trust fund, immediate cuts must ensue, or other income found. 

This trust fund contains revenues from oil and gas operations in state waters and earnings on the investments of those revenues. Money is transferred from the trust fund to the state's General Fund, to the Forever Wild fund and to capital improvement funds for city and county governments. Funds have also been transferred from the overall trust fund account to emergency rainy day accounts within the trust fund; from which amounts have been temporarily transferred to the Education Trust Fund (which funds education in the state) and to the General Fund (which funds all other state functions). These rainy day transfers are required to be paid back to the rainy day accounts.

The amendment addresses two issues but requires a yes or no vote on the entire amendment.

First, the amendment provides a new formula and procedure for determining how much money will be distributed from the trust fund annually to each entity receiving funds. It also provides that the Trustees who administer the fund can decide to distribute less money if they determine that is necessary to preserve the invested assets of the fund.

Second, it provides for the additional transfer of $145.8 million a year from the trust fund to the General Fund in each of the next three years to "provide adequate funding for the State General Fund budget" and, according to the ballot language, "to prevent the mass release of prisoners" and "to protect critical health services to Alabama children, elderly, and mothers".  Alabama Trust Fund assets on March 31, 2012 exceeded $ 2 billion.

See below for answers to questions about the Alabama Trust Fund, the proposed new procedure, why there is a special election, and the possible effects of a yes or no vote. 

PLEASE NOTE that this amendment does not take money from the Education Trust Fund, which is a separate fund.

Click the links below to get answers to questions about the proposed constitutional amendment. 

Download this document here.