State may have stimulus of its own
Alabama’s portion of the $790 billion federal economic stimulus package won’t quite cut it.
At least that’s what members of the Senate Finance and Taxation-General Fund Committee said Wednesday when they voted to provide $1 billion to Alabama roads and another $6 million to the housing market.
“This is the Alabama version of the stimulus package,” said Sen. Wendell Mitchell (D-Luverne), who voted in favor of the two bills Wednesday. “I honestly believe states can do something to jump start the economy.”
Though the bills have to pass both the House and the Senate before final approval, Mitchell said he thinks they would be beneficial to Pike County residents.
And, though they don’t know too many details yet, local realtors and road department officials feel the same.
“I don’t know how much money Pike County would stand to gain, but any little bit would definitely help,” said County Engineer Russell Oliver.
In a time when the county road department may not even be able to pay this month’s bills, is having to sell equipment to match funds and has already cut its workforce by a quarter, Oliver said they wouldn’t turn down any extra money.
“The evidence shows we definitely need some kind of additional revenue, so we would be thrilled,” Oliver said.
And while Pike County’s housing market is in much better shape than the road department, President of the Pike County Board of Realtors Scott Hendricks said there’s no doubt this bill would be beneficial locally.
“It would help whether the economy is bad or good,” Hendricks said. “(But) we all feel like we have a stable market. We are different than the rest of the country in that we don’t have a tremendous oversupply of houses.”
Under the bill for the road departments, Mitchell said $100 million would be withdrawn from the Alabama Trust Fund each year, for a period of 10 years.
This he said would allot 75 percent of that money to the Alabama Department of Transportation, and the remaining percentage would be split between the 67 counties and municipalities.
Mitchell said the way the bill is divvied is extremely fair, requiring a certain amount be equally split among each of the states congressional districts. And, the funding set aside for local roads would be split evenly among counties, distributed on population and then split among cities within those counties.
“It’s a well thought out bill, and everybody should be happy with it in terms of its content,” Mitchell said. “The only people who won’t like the bill would be folks who don’t want to take money out of the Alabama Trust Fund.”
But, Mitchell said, through this means, the state would really only be using very little in comparison to the $3 billion it receives a year.
If the bill passes the legislature this year, it won’t be at least until 2010 any results will be seen since it will have to be voted on by Alabama residents before enacted.
Oliver said that would be a major concern he has with the bill.
“My only question is can we really hold out until the 2010 election?” Oliver said. “How much longer can we make it with the way things currently are?”
The housing bill would be a much different story.
The proposed $6 million i for the mortgage guarantee fund administered by the Alabama Housing Finance Authority would be drawn from a state economic development account and would not have to be voted on in a general election. Under it, eligible home buyers, who make less than $98,230 a year and have a 620 credit score of better, would pay a 1-percent fee into the mortgage fund and wouldn’t have to buy a more expensive mortgage insurance.
In addition, home buyers wouldn’t have a pay a down payment.
Mitchell said both the bills have a good chance of passing in the legislature this year.
“I think there will be debate about it, but when it’s all said and done, I think it will pass,” Mitchell said.