Taxpayers win reform session
Commentary by Gov. Bob Riley
The recently concluded special session was a great victory for Alabama’s taxpayers. The most significant and fundamental reform of state government in decades passed in record time. The result: $300 million in savings over five years.
It shouldn’t have taken this long. For years, we’ve watched spending on health insurance drain more and more of our tax dollars. Benefits that cost the state $363 million in 1998 skyrocketed to an estimated $1 billion this budget year, a 175 percent spending increase. This out-of-control spending threatened to take over our budgets. If nothing was done to slow down these costs, in a few years half of all the money put into the education budget would have gone to nothing but educator health benefits, leaving nothing for our students and our classrooms.
In the 2004 regular session, I proposed a series of broad reforms to address these soaring costs. When these reforms did not pass, I appointed a blue ribbon task force to develop a reform plan that would slow down the rate of health insurance spending, save taxpayers money and win approval from the Legislature. After months of study, the task force came forward with recommendations that met each goal.
The recommendations were the type of common sense reforms the people of Alabama have demanded. From now on, those who participate in the system will be responsible for helping to keep costs down. The boards that run the health plans will be able to adjust premiums for state employees, many of who now pay nothing for their coverage. Those who retire after working only 10 years will no longer receive the same level of benefits as someone who worked for 20 or 25 years. People who retire from the state and take a job elsewhere will have to use their new employer’s insurance rather than continue to rely on Alabama taxpayers.
Altogether, these proposals amount to the most meaningful reform state government has seen in generations. In the first year alone, Alabama taxpayers are expected to save about $50 million under these reforms. Over five years, the estimated savings add up to at least $300 million.
As I have said many times over the last few weeks, these reforms are an important first step, but a first step nonetheless. We’ve saved hundreds of millions of dollars and have slowed the rate of spending, but more reforms are a must. My hope is that the successes we achieved in the special session will give those of us who want further reforms the momentum we’ll need in the regular session that begins in February.
In the meantime, Alabamians can take heart in knowing that, at last, reform of state government is taking hold in Montgomery.
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