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Tuesday, March 22, 2011

State Ethics Law Overview: Oh you mean ME?

Attending a State Ethics Reform Update recently which was sponsored by Bradley, Arant, Boult, and Cummings, I received an opportunity to hear first-hand the details and nuances of the changes in ethics reform and work to understand what the new Alabama Ethics Law holds for the business community. Always on point to help bring the issues to the business leadership, this forum was supported by the Birmingham Business Alliance. Myla Calhoun Choy, Legal Council for BBA, served as the moderator. David Stewart, partner with Bradley, Arant, Boult and Cummings, along with Jim Sumner, Director of the Alabama Ethics Commission, led the discussion of the impact on business and I assure you it is not “business as usual” anymore.




You may re call that in late 2010, the Alabama Legislature was called in to special session by then outgoing Governor Bob Riley for the purpose to increase transparency and accountability in government at the State, County and local levels. More specifically was the express purpose of limiting the amount of influence that lobbyists, and those who pay lobbyists can have on the political process. Senate Bill 14 by Senator Bryan Taylor, and House Bill 11 by Representative Paul DeMarco, makes extensive changes to the definition of lobbying, lobbyists, and items and hospitality that may be provided to officials.



DeMarco also fought for mandatory training. Given the changes, this seems not only logical, but clearly necessary. Many private industry representatives are required to read, train and sign corporate compliance and ethical standard agreements. Clearly we should look for the same minimum standard from our elected officials and effective January 1, 2011 it is now required of lobbyists and their principals. These bills truly transformed the law, and Ethics Commissioner Jim Sumner declared, “Life as we have known it in the past no longer exists.”



Hospitality and entertainment are the big changes here. Anything that is purely social is no longer allowed. Previously a lobbyist could spend just about whatever her or she wanted per day and did not need to report until a $250.00 threshold had been reached. Now, such gatherings must involve an educational function, may pertain to economic development, and must meet the criteria for a widely attended event. Therefore an Industrial Development Board working session is okay, but golf is not. The food and beverage limit is now limited to $25 or less per occurrence and not more than $150 per year per public official or public employee.



Are you a public official or public employee? You may just be. If you were elected, appointed or employed at the state, county, or municipal level of government or government instrumentalities these changes are now in affect. That is a lot of folks, and it may include you.



New rules, and new day, so make certain you understand how it affects you.

Monday, March 7, 2011

Alabama State Legislative Changes and the North Jefferson Area

Now is not the time to blink. You will certainly miss something in the realm of politics and business. The tax code that was created in the 1930’s and adopted by states like Alabama is a key element in the papers of late. Over the past 70 years, the income tax has grown and is now the mainstay of the Education Trust Fund here in our state. Today, according to Steve Flowers (NJN 3/2/11) the state income tax and state sales tax are the primary sources of revenue for education here in Alabama. With our current economic climate that includes an unemployment rate of 9%, and some areas with much more, weak sales and income tax collections trigger short falls in funding at many levels to include education.




Our new Governor Bentley has his hands full for sure, but there are many in Montgomery who are working hard to balance and sustain a reasonable budget. One of Bentley’s key items under the education budget is to keep any state-funded teachers from losing their jobs. He does maintain and ask that they pay more for their health care and pension retirement costs. To quote Governor Bentley, “We are only asking our teachers to do what virtually everyone else has been forced to do in these tough economic times.” (BHM News, 3/2/11). Also on the table is a proposal to end the state’s deferred retirement program, known as DROP. This program allows eligible public employees to delay retirement for up to five years and then get their retirement benefits from those years in a lump sum. Very Interesting. In the private sector where we find a cessation of 401K matching and a reduction of pensions in an effort to save jobs, this does seem mirrored and reasonable. Bentley’s plan does not dispense with this benefit as many companies have had to do, it simply reduces it. Most state employees contribute 5% of their checks to pension funding. In the private sector contributions are as high as 16% to a 401K WITHOUT a pension option. This would go up under this plan to 6 % in 2012 and to 7.5% by 2013. Opponents see this as a pay cut. Proponents see it as a necessary budgetary measure.



An educated work force is critical for sustained growth and development and thus supporting education is important. Perhaps it will be timely to add this metric to the mix. The measure of output of the school system as a measure of workforce contribution is not a far-fetched notion, and a bottom line concept certainly from a business perspective. Also important, let us measure the ability to retain our educated in this state with viable career options and employment.



House Bill 57 and the Education Trust Fund isn’t the only glass ball that our legislators are juggling. Alabama Republicans list several items in their “Handshake with Alabama” and they do impact business big and small. Look for House Bill 60 which would write in to the state constitution the ability to challenge in federal court the participation of Alabama in the Healthcare Overhaul Law. Among other things, the law will require most Americans to have health care coverage or face penalties.



House Bill 64 will be working on a rewrite of the state constitution as well. This Bill supports the view that workers would be guaranteed secret ballot when voting whether to unionize.



Clear support for workforce development and its importance as a key pillar to economic development can be found in the 5 year plan of Blue Print Birmingham. Driven by the Birmingham Business Alliance, and continued by the newly appointed Director of BBA, Brian Hilson, we look forward to measured and sustained growth for our region. We can look forward to learning more about how Hilson, through his leadership with the Huntsville Chamber of Commerce, participated in the success and growth of the Huntsville/Madison area. We look forward to learning also how he will bring that experience to Birmingham and the surrounding areas to include our North Jefferson Area.



Watching these developments will be key to driving the development of the North Jefferson area. The recent 2010 US Census reports that three cities in the North Jefferson County area had significant increases in population. Kimberly grew by 50%, Fultondale by 27% and Gardendale by 19.5%. To put that in context, the population of the North Jefferson area is approximately that of the Homewood area. Think about that. Growth is fine, but managed growth with the ability to support and serve is better. Do we have the infrastructure to sustain this growth? Will we have good roads? Will we have strong schools? What will our law enforcement and fire support requirements support require? Pay attention, don’t blink, and keep in the conversation.