Budget: Groundhog Day

April 20, 2016

INSIDE THE STATEHOUSE
by Steve Flowers

Some of you may have seen and remember the movie, Groundhog Day, starring Bill Murray. In the comedy, Murray awakens on Groundhog Day and has the identical day that he had the previous year, similar to Yogi Berra’s colloquial saying of “déjà vu all over again.” Well folks, this year’s legislative session began on Groundhog Day and it is déjà vu all over again. It is like it is last year again.

Similar to the way realtors say, “it is location, location, location,” with Alabama government it is the General Fund, General Fund, General Fund. Several legislators optimistically predicted that they would have the budgets out by the middle of the session.

In budget hearings, General Fund agencies requested $250 million more than the current $1.7 billion in this year’s budget and as is usually the case there has been no revenue growth. Last year Gov. Robert Bentley offered a $540 million tax increase package for the General Fund. Lawmakers systematically rebuked his proposal. It took three sessions for the legislature to finally pass a budget. However, it failed to address long term budget needs.

The 800-pound gorilla in the room is Medicaid. It is a money eating monster, which eats up all the General Fund money. Almost 20% of all Alabamians are on Medicaid. It provides healthcare for nearly one million low income Alabamians, most of them children. The problem is that if you cut state funding to Medicaid, you lose a gigantic match of federal dollars. For example, if you cut state Medicaid funding by $100 million, which the legislature is proposing, it will result in a loss of $1 billion in federal funds.

The legislature balanced the General Fund budget last year by transferring $80 million from Education dollars, which may be unconstitutional. Gov. Bentley is proposing the same remedy this year. However, he would like to see $180 million taken away from funds earmarked by the constitution for Education.

The idea of balancing the budget with Education’s money has received a cool reception from the legislative leadership. After the Governor’s State of the State address on February 2, Senate President Pro Tem Del Marsh (R-Anniston) said, “I would be surprised to see those dollars come from education.”

In his annual speech to the legislature, Gov. Bentley offered a myriad of proposals without any thoughts or ideas on how to pay for them. In his platitudes he especially heralded proposals to help improve healthcare access. However, expansion of Medicaid was conspicuously missing. Despite recommendations from his own task force to implement Medicaid expansion, it was never mentioned in his hour long speech to the legislature.

This is a sore subject with Democrats in the House and Senate. Democrats make up about 30 percent of the legislature. They are adamant about expanding Medicaid. They argue that the state is losing out on billions of federal dollars from Washington. They have a vocal ally in Dr. David Bronner, who vehemently says it is foolish to not take advantage of this federal windfall.

Bentley is hanging his hat on the implementation of Regional Care Organizations (RCO’s). RCO’s would shift from a fee for service model to one that allocates money based on health care outcomes. Bentley hopes this move will encourage more preventative care and less hospital use, hopefully slowing the growth of costs in the program.

Speaking of Bentley, at a time when the General Fund is broke, he chose to give all his Cabinet members huge raises. Four Cabinet members alone were given raises of $73,400 per year thus increasing their salaries from $91,000 to $164,400. By the way, regular state employees have not seen a raise in eight years and have actually lost take home pay with increased costs of their health insurance. This did not sit well with the legislature. They immediately cut the governor’s personal budget by $330,000.

The legislature had not only rendered Bentley irrelevant in the budgetary process, they have begun to treat him with disdain. This latest rebuke appears as though they look upon him like a petulant child.

See you next week.

Steve Flowers is Alabama’s leading political columnist. His weekly column appears in over 60 Alabama newspapers. He served 16 years in the state legislature. Steve may be reached at www.steveflowers.us.

 

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