Steve Flowers: Inside The Statehouse: Wrangling revenue

  Alabama’s new fiscal year begins October 1. Unlike most states we have two operating budgets. We, of course, have a general fund budget, but we also have a special education trust fund budget. Many of you may be surprised to know that currently over two thirds of all state tax dollars go into this education budget. As late as 30 years ago the two budgets were approximately 50/50 in their receipts.

  The dollars that education receives have crept up over the last three decades because the fund’s primary sources of income are from the state’s sales and income tax collections. These two rich veins of revenue have increased incrementally over the years as people’s incomes have risen. It has a doubling effect when they spend this increased income and sales tax is collected on their purchases.