Compromise, ‘rainy day’ fund promising
Legislative leaders said Wednesday they have reached a compromise on how to raise $160 million in additional revenue to fund Alabama’s education system during the next two.
Negotiators say the hard-fought compromise includes measures to tighten the loopholes on corporate taxes ­ although perhaps not as tightly as Gov. Don Siegelman might like.
The governor had proposed capping the minimum tax on big corporations at $2 million; the compromise proposal caps that minimum tax at $1 million instead. The compromise also suspends corporations’ ability to deduct net operating loses from their taxes for the next two years, but it does excuse businesses that lose money from paying the tax.
And, in what sounds like the brightest and most forward-thinking move of the special
session, the compromise proposal
calls for the creation of a "rainy day" fund to help offset any future tax shortfalls and, ideally, prevent any future cuts to education funding. The new fund would be established with $171 million already in an oil and gas royalties account.
We’ve spent far too long reacting to educational funding shortfalls ­ from last year’s proration battle to this latest special session. And while it’s critically important that we find solutions to the crisis at hand, it’s equally as important the we look ahead to the future and try to prevent a recurrence of this crisis.
It sounds as if the negotiators have succeeded, at least in that part of the process. By creating a "rainy day" fund, we can create a safety net to supplement and offset occasional shortfalls in tax revenues. What we cannot do, though, is become dependent on that "rainy day" fund to help meet our annual educational funding needs. We need to continue to examine the system; to tighten the belts as needed; and to make certain that our schools and higher education institutions ­ which are among the best in the nation ­ operate effectively and efficiently.
Then, we need to give them the reassurance that their will have the state’s funding and support as they go about their mission of educating our children.
And the lawmakers, who are close to a resolution, need to keep that focus in their minds today.
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