Alabama ranks among worst states in long-term budget planning, study finds

Only three states rank below Alabama in long-term budget planning, according to a report released Tuesday, Feb. 4, 2014, by the Center on Budget and Policy Priorities (CBPP), a nonpartisan research organization in Washington, D.C. The state could promote greater government efficiency and improve its business climate by adopting a set of budget-planning tools that have proved effective in neighboring states, the report finds.

“Alabama can and should do more long-term planning to help strengthen our economy and make our government more efficient and transparent,” Arise Citizens’ Policy Project executive director Kimble Forrister said. “People across the political spectrum can agree that adopting tools to help our leaders make good long-term decisions about our state’s future is in everyone’s best interest.”

Several improvements to Alabama’s long-term budget planning would help lawmakers make more informed spending decisions and boost public understanding of the state’s funding priorities, the report finds. Alabama is one of the few states that do not publish a regular tax expenditure report listing the tax breaks given to corporations and individuals. The state also does not use a current services baseline to estimate the cost of continuing to deliver public services at current levels in the future.

The CBPP report praised Alabama for making adequate pension contributions and having an independent Legislative Fiscal Office (LFO) to evaluate bills’ effects on state revenues. But the state would benefit even further if the LFO regularly estimated the savings or costs of proposed legislation for at least five years in the future, the report finds. Detailed multi-year projections of overall revenues and spending also would improve lawmakers’ ability to ensure that Alabama’s public services have the money they need to do their jobs properly. Greater public certainty about what services they will receive and what taxes they will owe would make the state more attractive to businesses and boost public confidence in government, the report says.

“Better planning encourages policymakers to take the long view, one that considers a state’s future workforce, population and infrastructure needs,” said CBPP senior fellow Elizabeth McNichol, the report’s co-author. “A state’s budget decisions today on services like education and infrastructure affect both the state and the nation for years to come.”

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