Alabama voters approved using $145.8 million from the Alabama Trust Fund over a three-year period to fill gaps in revenue shortfalls.
That means if the principal in the fund gets smaller, so will interest payments, some of which are earmarked for local governments around the state.
Florence, for example, received $331,759 from the interest for the current fiscal year. Muscle Shoals received $112,585.
Dan Barger, Florence treasurer/chief accountant, said the money is distributed to cities and counties from the County and Municipal Government Capital Improvement Trust Fund, which was established in 2001 by a constitutional amendment.
The state trust fund was created to collect royalties from oil and gas leases in the Gulf of Mexico. It contains $2.3 billion in invested assets.
“This money provides funding for improvements to municipal properties we would not otherwise have been able to do,” Barger said. “These are things being done outside the General Fund, and some of these things would not be done today without it.”
Florence has used the money to make repairs and improvements to the parking deck, the Indian mound museum, the Kennedy-Douglass Center for the Arts and the Police Department building.
In Muscle Shoals, money from the trust fund has been used to obtain a greens mower for Cypress Lakes Golf Course and make pond and sign repairs at the course, as well as buy a police car and a couple of pickup trucks, City Clerk Ricky Williams said,
“There’s no question this money is helpful,” Williams said. “These are extras that are not programmed into the budget.”
There are a number of concerns about how the state will use the trust fund in the future, including whether the Legislature will make provision to repay what was taken in the Sept. 18 special election.
“The concern is that once they start using this money to fill budget gaps, it becomes easier to throw it (trust fund) up as a source for future state funding,” Barger said. “The hope is that this is a short-term solution to a revenue shortfall.”
Barger said Florence could receive about 6 percent less from the trust fund during the next three years, but market fluctuations affect interest earnings, which is reflected in the varying amounts paid out each year.
Robert Palmer can be reached at 256-740-5720 or robert.palmer@TimesDaily.com.