Special interest conflicts cause fiscal problems

Published 12:00 am Tuesday, January 27, 2004

By the time the next regular session of the state Legislature ends in May, Alabama could be a fundamentally different state … for good or for bad.

I would like to be optimistic and believe that our state legislators will be willing to take a more honest and reasonable approach to solving the fiscal problems facing Alabama, but unfortunately looking at the makeup of the Legislature dampens my outlook.

This is a Legislature that is dominated by members with the most compelling of all interests to watch out for – their own.

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When I asked for an estimate of the number of legislators who are financially tied to the state government or to the Alabama Education Association (AEA) and its powerful leader, Paul Hubbert, one state senator told me that would include at least 80 out of the 140 members of the Legislature.

If this estimate is accurate, it means that almost 60 percent of those elected to serve the people of Alabama have their own personal interests in conflict with the interests of the voters.

It is hard to imagine a more obvious conflict of interests scenario than to have people who either work for the state in some capacity or are retired from the state, or whose spouse fits in that category, serving in the state Legislature.

No wonder the special interest groups have such power and the average taxpayer has so little.

Under such circumstances it is little wonder that there is so much cynicism and doubt that the Legislature will truly enact reforms that would bring real accountability to state government.

The incentive for those state legislators whose income is tied to the state is to do the exact opposite of reforming programs plagued by wasteful or unmanageable spending and to do everything possible to protect their own interests rather than fix the abuses that are driving the state from one fiscal crisis to the next.

A case in point would be the Deferred Retirement Option Plan (DROP) program that Paul Hubbert convinced the Legislature to approve three years ago.

The program was supposed to help the state prevent hard-to-replace state employees from retiring early by giving them the option to work three to five years longer and receive a lump sum payment that would be in addition to the pension they had already earned.

When the program began, its supporters projected that it would have less than 600 enrollees per year and only cost the state about $25 million per year.

Yet three years after being established, there are more than 4,100 state and public education employees enrolled in the DROP program with more enrolling every month. Some estimates indicate that the state’s liability for this program will range from $60 to more than $100 million per year.

State and public education employees are literally counting the days until they reach age 55 so that they can jump on this cash cow.

And who can blame them?

Some state legislators have actually joined as have some of the state’s highest paid bureaucrats, including former State Superintendent of Education Ed Richardson.

Somehow, even Paul Hubbert, who is not a state employee, has joined and will receive a lump payment of over $1 million at the end of his five-year enrollment.

Needless to say, calls to end the DROP program and get it off the taxpayers’ backs are not being warmly received by many members of the state Legislature.

Nor are the recommendations to reform the Public Education Employees Health Insurance Program (PEEHIP) that would save $100 to $150 million in the education budget.

But, once again, there are many state legislators who are covered by PEEHIP who will be very reluctant to vote against their own interests.

Other accountability-driven and cost-saving reforms continue to get the cold shoulder in the Legislature simply because it is perceived that enacting them would reduce the power of the AEA, if only minimally. One of these measures that has been recommended is to include outsourcing non-academic services in our public schools such as school bus services, cafeteria services, and janitorial and maintenance services.

Outsourcing could save another $60 to $80 million in the education budget.

Another area that could be considered for outsourcing is school financial management.

Not only would this save education dollars, it would bring a much higher level of accountability in terms of financial management and record keeping.

But all of these accountability reforms face vehement opposition by the AEA and the state employees’ union, both of which have worked tirelessly and spent millions to get their people elected to the Legislature in order to protect and expand their turf with expensive programs such as DROP.

Looking at the big picture, it seems obvious that much of the state’s financial mess is associated with the fact that so many “public servants” in the Legislature are serving themselves and the interests of the AEA and the state employees’ union – not the taxpayers.

It should be very obvious to Alabamians that it is not in the best interest of good government to have so many elected representatives whose incomes are linked in some way to the state.

Ending this conflict of interest is the real key to solving Alabama’s financial problems and the key to bringing true accountability to state government.