By: Phil Williams
Is it possible for a budget surplus to be a bad thing? Short answer: Yes.
It was reported recently that the Alabama State Senate set a new record for proposed spending with a $12 billion education budget! The same education budget which is funded in large part by revenue gained from sales tax and income tax. Basically, the education budget in Alabama makes positive gains when people are working and spending.
Alabama’s Senate Republicans must believe that people are working and spending at a pretty good clip. Why wouldn’t they? They have a budget surplus at their disposal. So, they spent more.
Is that good news? Maybe. Maybe not.
First, consider that just two years ago the legislature passed a bipartisan tax break on overtime pay. It turned out to be a great plan. More folks are working overtime, and businesses are hiring more employees. The plan, sponsored by House Minority Leader Anthony Daniels (D-Huntsville), exceeded all forecasts, resulting in the state giving back approximately $300 million to hardworking hourly-wage citizens during a lean economy. It has been called “a game-changer for the state’s frontline workers” by The HR Digest.
That’s great! The legislature gave back some money and still had a surplus so now they can have the biggest budget ever! The plan works!
Not so fast. They may be taking away the tax break. The overtime tax relief legislation is due to “sunset” this year. Without an extension, it will wither and die on the vine. You heard me – apparently, the legislature believes it gave back “too much money.” This is theater of the absurd. A Greek tragedy.
The House and Senate are not wavering on something that has never been. To the contrary, the legislature is considering taking something away that has been putting food on people’s tables. In effect, failure to extend the overtime tax exemption will result in a tax raise at a time when the economy remains lean at best.
But yet, the state has a budget surplus. So much money. So little to share.
This is a Republican supermajority! A SUPER-majority! In the reddest of red states. The state whose 4th Congressional District had the highest per capita vote for Donald Trump in the last several election cycles. The same Donald Trump who is leading the charge for tax relief, downsizing government, excising wasteful spending, and focusing on America’s working-class citizens. Alabama’s Republicans have the wind at their back. All the things they say about themselves in their campaign commercials can come true, if they choose to do so. They not only have the political strength, they also have the political winds.
The question is whether they have the political will.
One of the best and worst terms that you can hear in government is “budget surplus.” On the one hand, you would much rather know those in charge of your government engaged the spending and revenue collection aspects of their jobs in such a way that the government doesn’t end up declaring a “budget shortfall.” It’s never a good thing to find out the government didn’t collect enough of our money and is forced to cut essential services.
But “budget surplus” can still be a bad thing. When the government has more money than it needs to operate it means, in essence, that they took too much from the taxpayers. When you combine a government surplus with the wiping out of ongoing tax relief, all during a tough economy…well, at that point government begins to look heartless.
Alabamians are paying more at the store, paying more to the government, keeping less in our pockets, taking fewer vacations, while government winds up having extra to spend. That’s when budget surplus becomes more about the Benjamins and less about the taxpayer.
I’m not so libertarian in my views that I don’t believe government has an important role to play. Essential services like infrastructure, law enforcement, defense, the court system, and much more are true functions of government. Functions that cost money.
But Alabama is sitting on budget surpluses that come from having received too much revenue during hard times. The goal should be less about the Benjamins and more about the citizens.
More money may seem better than less money. But more money taken from private citizens to fund government well in excess of what is needed should never result in a rollover account, or year-end profit. Government should not be in the business of “making a profit” on the backs of its taxpayers. Budget surplus should result in some form of refund to the citizens of the state. I don’t mean a simple one-time token payment to appease the masses. I mean reform that stops government from taking so much in the first place.
And (key point here) when you have a surplus but you discontinue an effective tax relief plan, you are no longer a “representative”…..you’re just an elected bureaucrat.
More about the people – less about the Benjamins!
By: Phil Williams
April 18, 2025
