At a time when Alabama workers face an unemployment rate that hovers near 11 percent, it is time to invest state resources into creating jobs in every county of Alabama. The Senate Democratic Caucus, of which I am a member, proposes a $1 billion highway and road construction and repair program — $100 million invested every year for 10 years — that will tackle two important problems facing Alabama: unemployment and our crumbling transportation infrastructure.
We expect an important return in our investment over that 10-year period. One billion dollars invested in highway construction creates approximately 30,000 jobs, and the annual $100 million investment will boost the economy by $350 million in the decade after the work is complete.
Under the constitutional amendment, which must be approved by a vote of the people if it passes the Alabama Legislature, all of Alabama will share in the funds. Twenty-five million dollars per year in state money must go to Alabama counties and municipalities for new construction, maintenance and repair. The other 75 percent, or $75 million per year, will be allocated to the Alabama Department of Transportation; 25 percent of that will be divided equally among the seven congressional districts.
That means every county in Alabama will enjoy the benefits of our program, both in terms of road construction and repair and local job growth. Boy, is it needed. According to the Alabama Road Builders Association, unemployment in their business sector stands at a whopping 18 percent.
Highway construction is one of the only segments of the economy with the ability to create new jobs. When you increase the available dollars to the transportation construction industry, the industry hires employees to replace outdated and dangerous structures and to expand existing overcrowded corridors. These employees inject these dollars back into the local economies and produce new sales-tax revenue for Alabama.
At the same time, Alabama county commissioners tell us that more than 1,400 Alabama bridges fail to meet federal standards and cannot be crossed by school buses. That is a disgrace. This plan is not just about jobs and investment; it is about public safety and the quality of the roads we drive on.
Where do we get the money to invest in our program? Not from taxes. Highway construction in Alabama is funded in large part by the gasoline taxes Alabamians pay. We will not increase any tax, gasoline or otherwise, to pay for this program.
Under our plan, the 10-year road and bridges program will be funded by withdrawals from the Alabama Trust Fund, a state savings account for oil and gas royalties. Right now, the Alabama Trust Fund contains approximately $2.5 billion in royalties, and it earns about $100 million per year in interest. We can take that interest every year, invest in new jobs, rebuild our roads and bridges, and never touch the principle in that account.
Second, by using this Alabama Trust Fund in our "pay-as-you-go" roads program, rather than borrowing money with bonds to pay for the plan, we can save $800 million in future interest costs. By withdrawing $100 million a year for 10 years from the Alabama Trust Fund, we simply spend $1 billion to pay for $1 billion in new highways, roads and bridges.
But if we were to borrow $1 billion with bonds, the state would pay $800 million in additional interest for the next 20 years to accomplish the same program. Under our plan, we can build the same amount of projects, create the same amount of new jobs, invest the same amount of money into our communities and save taxpayers $800 million in interest. That makes good fiscal sense.
Some argue that we should not take this money from our savings account. But this money is saved for a rainy day, and if this economic meltdown does not qualify as a rainy day, I don't know what will. I believe this is a win-win deal for Alabama taxpayers. We can stimulate the economy with new road construction, make necessary repairs and insure that every county shares in the job creation. This money is meant for Alabama companies and Alabama workers.
If you agree, I hope you will contact your state legislators and urge them to support this important Alabama investment in Alabama workers.
Sen. Lowell Barron, D-Fyffe, is in his seventh term in the Alabama Senate.