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Alabama wants to finance ambitious plan with oil and gas royalties Roads, bridges, prisons, state hospitals would benefit from change in royalty investments Bill Poovey Associated Press Writer
Alabama Gov. Don Siegelman wants the Legislature to approve an ambitious spending plan that would use Alabama’s oil and gas royalty money to upgrade roads and bridges, repair prisons and state hospitals and expand economic development efforts.
The proposal — which could involve up to $150 million annually — would require voter approval, possibly in November, if the Legislature agrees to put a proposed constitutional amendment on the ballot.
Siegelman unveiled the plan as a way to help pay for a list of recommendations made last month by his Commerce Commission as part of the state’s first long-range economic development plan.
The governor said the package would also include a measure that would allow the state to start issuing $110 million in bonds to renovate and upgrade state parks.
State Finance Director Henry Mabry said the amendment is needed to expand options for investing oil and gas money. He said changes need to be made to head off a reduction in earnings when the state’s Heritage Trust Fund is combined with the Alabama Trust Fund in fiscal 2002. He said that projected reduction would total about $25 million.
The change would allow the Siegelman administration to hand out lucrative investment work.
Trust fund from gas royalties The Alabama Trust Fund was created in 1985 with lease payments that oil companies paid for drilling sites on the Alabama coast. The fund, which totals about $1.2 billion, receives about $125 million annually in royalty payments from the natural gas wells that the oil companies drilled.
The Alabama Heritage Trust Fund has a market value of about $550 million.
The administration will be pushing the proposal with 12 meeting days remaining in the Legislature’s annual session.
Mabry said that based on the current earnings, about $70 million would be available for capital projects and about $50 million for road and bridge work. That $50 million would attract an additional $200 million in federal matching money, he said.
Buddy Sharpless, director of the Association of County Commissions of Alabama, said he would help get the association board to support the proposal.
Siegelman also said he would not act on the commission’s recommendation for tax reform “until the people of Alabama decide that’s what they want done.”
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