Put new oil, gas revenue in trust funds
The windfall money Alabama is to receive from the federal government expanding offshore drilling in the Gulf of Mexico won't make a major impact on the state's economy, but it still must be used wisely.
The state will share an average of about $51 million per year for the next seven years with Mississippi, Louisiana and Texas if President Bush signs the bill that passed Congress on Saturday.
Alabama is guaranteed $5.1 million annually, which represents about one-third of 1 percent of this year's $1.66 billion General Fund budget. If the Legislature were to divide that amount proportionally between the state's 67 counties, its impact would be even less.
One of the new Legislature's first jobs will be to decide where the money goes. Congress wants the money to go to coastal counties to repair their shorelines from erosion and hurricanes. But Alabama voters amended the Alabama Constitution years ago to put oil and gas money into trust funds. The state now has three closely guarded trust funds that use dividend income to finance capital projects and for certain other uses.
Hopefully, the Legislature won't finagle some way to spend the money as it comes in. Instead, legislators should use the money to continue building the trust funds, and then spend the dividends.
The state was smart to create the trust funds. Legislators will be smarter if they allow them to continue growing.