31 Jul 2012
By Brandon Moseley
Alabama Political Reporter
The Red Mountain Republicans met at Salvatore’s in Mountain Brook on Monday night. The Speaker at the event was Gary Palmer, President of the Alabama Policy Institute (API). According to Palmer, API is Alabama’s version of the conservative Heritage Foundation.
Palmer said that API is not opposed to any borrowing from the trust fund; but that they are for paying the money back to the trust fund if it is borrowed and any borrowing should be conditioned upon the state dealing with fundamental reform on how the state operates its current budget. Palmer says that the Constitutional Amendment being proposed on September 18th does not meet either of those criteria so conservatives should vote against passage of the amendment. The proposed constitutional amendment would raid $437 million from the Alabama’s Trust Fund for three years so that the state can pay for Alabama General Fund spending for the next three years.
Palmer said that there are other things the state can do to reform its spending other than raiding the trust fund. Palmer said that he was appointed to a commission for reforming Alabama state government by Governor Robert Bentley. Palmer says that they identified 500 properties which the state owns which they are not using and another 2,400 pieces of property which the state owns that could potentially be downsized by a legislature which was more committed to downsizing state government. He said the state even owned two (now closed) bait shops. None of the Commission’s recommendations were implemented. Instead of rightsizing and reforming state government the state legislature passed a budget based on raiding the state’s trust fund.
Another example that Pres. Palmer cited of state government wasting tax dollars is that state agencies pay a per diem rate for employees who are traveling on state business. Most private sector employees only get reimbursed on their actual expenses and never rack up any per diem money. Palmer also pointed out examples of technologically obsolete offices that still fill out time sheets and then use state troopers to drive the time sheets to Montgomery. Technology like time clocks could save taxpayers millions of dollars Palmer said.
Palmer pointed out that Alabama Medicaid squanders tens of millions annually because the program doesn’t have an assisted living option for seniors who have become wards of the state in their retirement years. Only Alabama and Kentucky do not have an assisted living option. Instead Alabama pays for more costly nursing home care. Over 60% of seniors in Alabama nursing homes have become so impoverished that their families have turned over responsibility for their care to the state of Alabama. Palmer suggested that an assisted living option would be just one way that the state could find saving in the Alabama Medicaid budget. The state of Alabama’s share of the Medicaid budget is expected to cost state taxpayers $604 million next year. An assisted living option instead of warehousing poor Alabama seniors in nursing homes for the sunset years could save Alabama Medicaid $40-50 million a year according to Palmer and API.
Palmer was also critical of the Alabama state employees’ pension fund. Palmer pointed out that RSA head Dr. Bronner has invested over 30% of RSA’s money into nonpublic assets like golf courses, newspapers, and TV stations so it is difficult (if not impossible) to accurately value the real worth of the pension fund. Where Dr. Bronner estimates that his assets will generate an 8% annual return per year, Palmer thinks that rate of return is too high given the poor returns the fund has produced in the last decade. This means that state taxpayers are on the hook for several $billion more in unfunded liabilities to pay for state pensioners than the numbers that Dr. Bronner and Mark Reynolds gave the state legislature. Palmer says that the state should offer early retirement packages to state employees that are within five years of retirement. If just 1750 of the ~11,000 such employees take the buyout that could save taxpayers $95 million a year. Palmer said that there are already more state retirees drawing state pensions than there are current state employees paying into the plan. He believes that the state should switch from a defined benefit pension plan to a hybrid plan like 401ks.
Palmer also lamented the failure of charter schools during the last legislative session. Palmer said, “The AEA flat out lied about it (charter schools) and the school superintendents were off base on it.” “We were targeting failing schools.” Palmer says schools like Woodlawn HS in the City of Birmingham have a graduate rate as low as 33%. “That is who we want to focus on.” “If we can just reduce the male drop out rate alone in Alabama by 5% it will save the state $125 million a year.” Palmer said that whole sections of Birmingham are boarded up because of the crime and the horrible schools and that will only continue if Alabama does not improve the performance of its school systems. API has studied the other 41 states that have charter schools and Palmer believes that Alabama can learn from those state’s successes and from their mistakes.
Palmer said, “It is inexcusable for a Republican supermajority to surrender on this issue (charter schools). We are better than this.” “I got farther with the Democrats than I got with the Republican supermajority. What we are lacking on this is leadership. People are afraid to stand and fight.” Pres. Palmer said that both caucuses leadership needs to get together. Speaking bluntly Palmer said, “Some guys in the upper chamber are not Republicans. We need to tell a couple of them to go back to where they came from,” (referring to Republican State Senators who vote with AEA and not with the Republican Caucus).
API President Gary Palmer said that after the 2014 election, Republicans could end up with 25 State Senators and 72 state representatives but he warned, “I don’t think the party leadership and the Governor understand how angry the grassroots are.” Palmer warned that that grassroots anger on conservative issues like state spending and charter schools could lead to primary battles in Republican districts. “I am very scared that the AEA will bring their candidates into the primaries.”
Palmer said, “I think we ought to have a full public discussion on the (September 18th) CA.” “We need to talk about what this is and need to talk about all the other things that we can do.” Palmer said that the language used on the ballot is “ridiculous” and is purposely designed to mislead voters about what will happen if they vote “No” on September 18th as he believes that they should do.
Palmer said that what the state needs most is leadership. “People will rally too fighters” and cited Wisconsin Governor Scott Walker as an example.
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