Remarks to the Compass on Business
Economic Forum and Luncheon
Birmingham, Alabama
March 23, 2000
By Jim Williams
Executive Director
Public Affairs Research Council of Alabama
I want to thank you for the opportunity to be here with you today. Like you, I received the Alabama Economic Outlook 2000 report, and I have been through it with my highlighter. It’s good work! I applaud Compass and the Center for Business and Economic Research for creating a partnership to provide us with information like this regularly. This report, in fact, is the perfect predicate for what I am going to say today, and I look forward to hearing Carl’s discussion of it. It defies the old saying about economists, which is that if you lined them all up, one behind the other, it would be a very long line, but it would never reach a conclusion. There are some pretty clear conclusions to be drawn from these data.
To me, the unmistakable message is that Alabama’s economy sits on a shaky foundation. Despite our well-known recruiting successes, the bottom-line indicators of economic growth are not as positive as we would want them to be. The key conclusion of the report, to me, is that we’re not likely to turn this situation around without an education system that provides a better prepared workforce.
I take it for granted that you understand this, that you recognize how it affects you directly, as employers and as producers of goods and services. Now, here’s the issue: you and I, and our fellow citizens, own the public schools and colleges that more than nine out of every ten Alabama students attend. Well, if we understand the issue, and we recognize its importance, and we own the major providers of educational services, then why haven’t we done something about it?
That’s what I’m here to talk about. As you can see, my subject is "Why business needs to be involved in Alabama’s constitutional reform."
Actually, I’d like to personalize that for you and answer this question: "Why should I get involved in constitutional reform?"
I’m going to give you two reasons. The first one is, it’s not only Alabama’s economy that has a shaky foundation: our state and local governments do, too. In fact, the two problems are connected. And just as the economy can’t prosper without a better education system, so our educational institutions aren’t going to provide the results you and I want until we have a better foundation for good government. The most important part of that foundation is a sound state constitution.
Why get involved?
Because a state constitution is the foundation of good government, in Alabama and elsewhere. Think about your home: If the foundation is slipping, and there are cracks in the living room walls, you’re not solving the problem if you focus on redecorating the living room, are you? That’s where people come into your home, and you want it to look presentable, but those cracks in the living room are the symptoms, not the problem, which is down in the foundation.
In state and local government, when we see services that aren’t working properly, many times the real problem is beneath the surface, in the constitutional foundation.
This is a copy of the United States Constitution, including its 26 amendments. What it does is to delegate certain powers to the federal government. All the rest of the power that government might have is retained by each state, or by the people in that state, if they choose not to give it up.
It is up to us to define and limit the powers of government effectively within the state of Alabama.
Now, these two volumes contain Alabama’s constitution, with its 661 amendments. It was written primarily to put a straightjacket on government, and on the people. It restricted the powers of state government severely, denied any independent scope at all for local government, and limited voter participation as well.
There is a story about the college student who was doing a biology lab experiment. To be neutral, I’m not going to name the college. He took a grasshopper and pulled off the first pair of legs, set him on the table and hollered, "Jump!" The grasshopper jumped, and he caught it, removed the next pair of legs, hollered "Jump!" with the same result. So he pulled off the last pair of legs, hollered "Jump!", and nothing happened. He tried again, but nothing happened. So he wrote in his lab book: "When you pull off all of a grasshopper’s legs, it can’t hear anymore." You have to admit, he may be right; but it’s more likely that the grasshopper isn’t able to move anymore, even if he can hear.
The people who wrote Alabama’s constitution evidently thought that if they took virtually every power away from state and local government, it wouldn’t be able to do bad things anymore. They were looking backward, at Reconstruction, not forward.
But in the real world, people realized very quickly that this simply wouldn’t work, and so they began to undo it. Here’s the problem: for a hundred years, we’ve been curing the symptoms caused by this constitution, one at a time, without ever really attacking the root causes themselves.
Let me illustrate this for you. The constitution says that our governments cannot be involved in internal improvements or economic development activities. Well, highways are internal improvements. So an amendment was added for that. Seaports and airports are internal improvements. Another amendment. And over 40 amendments to allow individual counties and cities to do different things to promote economic development.
But here’s the crazy part: the original provisions that put a straightjacket on economic development are still there! They haven’t been removed. The amendments have just been tacked on, one after another, as specific situations arose. And so today the straightjacket applies fully in some cases, partially in others, and not at all in still others. "Chaos" is a good description of this kind of situation.
The examples go on and on. Two days ago we voted on a constitutional amendment to levy business taxes more fairly. Because of the straightjacket our constitution puts on taxing and spending, this became not only an issue of tax fairness, but also an issue for education, prisons, mental health, and other kinds of services. The constitution earmarks all state income tax revenue for public school teacher salaries. If we move money out of that pocket, we may hurt the schools; if we move money into that pocket, we may hurt colleges, or mental health. And so we can’t work on our tax system without it becoming an educational issue, or on education without it quickly becoming a tax issue.
The bottom-line question you face is this: Do I really want a government that works? If you do, then focus on the constitutional foundation that underlies it. That’s where the problems originate. To switch metaphors: we have to put some legs back on this creature if we expect it to move anywhere.
Now, you may say, "I don’t know if I want to put any legs back on this government of ours, because it might get out of control. What we really need is accountability." And that is exactly right.
Why get involved in constitutional reform?
The second reason is that without better accountability, we won’t get better results from our investments of state and local tax dollars.
I said earlier that the constitution set out to severely limit governmental powers, but it didn’t eliminate them entirely. Laws can be enacted, within restrictive limits. But the constitution gave exclusive control of lawmaking power to the state legislature, creating what we call in the business world a monopoly.
I ran across a news article recently about the Tuscaloosa County Barber Commission. It got a bad audit from the legislature for not doing the inspections or collecting the fees that its law requires. You see, the legislature created this commission but gave it no enforcement powers, so barbershops ignore it and refuse to pay the fees. Local officials can’t dissolve it or add any power to it. They are trying to get the legislature to kill it, but meanwhile the auditors keep coming back and writing bad reports. Talk about a Catch-22!
We can’t hold local officials accountable for results until we give them control over the services they manage. Inefficiency is inevitable as long as the people we elect to make policy for the state government also have to worry about local government, and as long as the people we elect to run local government can’t make basic decisions without asking permission. This is Management 101, no matter where you take the course.
Imagine how a bank like Compass would function if its board of directors had to make decisions about every branch bank, individually. Would they have any time left for corporate policy? Would a business run like that make any money? Yet that is how our constitution provides for the governance of the state and its many localities.
Our state government alone is as big as Delta Airlines, in terms of revenue, and it hasn’t won any awards for good management. In fact, last year a national study gave Alabama the lowest managerial grade among all 50 states. This deserves the legislature’s full attention, without any distraction about such things as local barber commissions. Local officials ought to have full responsibility for local services, and be held accountable for the results. We have to create this kind of accountability at both levels if we expect to get the best possible service at the lowest possible cost. And the constitution is the right place to do it.
The case for constitutional improvement is clear. The good news is that there is a great deal of interest in the issue, inside the legislature and out. There are legislative proposals for different ways of getting the job done.
No matter how it is done, this is a process that will require years rather than months to complete. Specific proposals have to be developed. To succeed, they will have to be approved by legislative majorities in both houses and a majority of the voters. Success is not guaranteed. The last time constitutional revision was a major issue, back around 1970, it didn’t get much farther than redoing the judicial article.
There is a lot of work to be done in defining issues and developing good constitutional provisions. Samford University, through the Cumberland Law School, has committed to the creation of a center for the study of state constitutional issues. The center will bring together materials on our constitution, analyze issues, and look at the best practices in other states. They will produce issue papers and sponsor meetings to discuss alternatives. The information will be placed on a website open to all Alabamians. The UNUS Foundation of Birmingham has provided a funding base that allows the work to begin. Perhaps you will want to support this effort, participate in the discussions, and take advantage of the information on the website.
There is also a lot of work to be done to engage the attention of the legislature and the public on constitutional improvement. The Birmingham Chamber has endorsed constitutional revision, as have the West Alabama Chamber in Tuscaloosa and the Huntsville Chamber. The West Alabama Chamber is hosting a constitutional rally in Tuscaloosa on April 7th to start the process of public engagement. Why don’t you attend, and take someone with you? I have brochures here for those who are interested. The Huntsville Chamber is organizing a luncheon on April 14th for the same purpose. Maybe there should be similar events in Birmingham and elsewhere. There are discussions about creating a public engagement organization. Maybe this is where you will want to be involved.
Constitutional revision can be to good government in Alabama what the Mercedes decision was to economic development. Attracting Mercedes turned around the psychology of economic development in our state. We haven’t fixed all our economic problems yet, but now we know that Alabama can compete, and we set higher standards for ourselves. I think creating a solid constitutional foundation will have the same effect on state and local government. But it can’t happen unless you get involved. It’s all up to you.