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In Case You Missed It

Takeaways from 2015 Legislative Session

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

The 2015 Legislative Session is all but over. The Alabama House of Representatives will come back on Thursday, June 11, to concur with a handful of bills the Senate passed. But, with the Senate adjourned, what they can actually accomplish is very limited, beyond the photo op. 

This would be a good time to list the Top 12 Takeaway Points that the people of Alabama actually need to remember, from what was, in many ways, a very forgettable legislative session.

1. The State General Fund (SGF) budget is going to be difficult to balance. The size of the budget shortfall has been estimated between as low as $198 million and as high as $285 million by Governor Robert Bentley (R)….nearly $64 per Alabamian. Legislators are hearing from voters that they don’t want to see raised taxes. 

The budget crisis is being driven by rising costs in Alabama’s troubled Medicaid program (by far the largest program in the SGF). Slashing a $100 million from Alabama Medicaid would actually mean cutting the program by almost four times that much due to the loss of Federal matching funds.

The second biggest budget item in the SGF is the State’s troubled Corrections system which is being threatened by Federal intervention due to the overcrowding. There is no real savings to be had there. There can be some savings from more State agency consolidations, but without eliminating some government departments and functions, altogether across the board cuts like in the budget that was just rejected by the Governor, may be the only option that doesn’t involve massive tax increases.

2. There has been a split between State Senator Del Marsh (R-Anniston) and State Representative Mike Hubbard (R-Auburn). The Senate President Pro Tem and the Speaker of the House have been Alabama politics’ version of Butch Cassidy and the Sundance Kid. The duo have had an impressive five year run together. They took over both Houses of the Legislature from aging Democrats in 2010. Since then, Mike has killed GOP legislation that Del didn’t want to see in the Senate and vice versa. The two tag-teamed corporate fundraising, Alabama Democrats, and the Tea Party.

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That spirit of cooperation imploded, however, during this session.  Marsh unveiled an ambitious plan to use the legalization of gaming to generate more revenues, then Hubbard undercut Marsh by introducing his own competing gaming plan. The Marsh plan was never debated in committee in the Hubbard controlled House, and Senators openly denounced Speaker Hubbard’s tax bills before they even got to the floor of the Senate. On Day 26 of the session, while Senators were preparing to debate a plan to solve the budget crisis by raiding the funds from education, Hubbard closed down the House and the Journal, so it missed the deadline on transmitting to the House. Marsh and the Senate retaliated by adjourning with sine die a week early, so they could not override an expected Governor’s veto.

Dozens of House bills died from lack of Senate action on Wednesday and Thursday because the Senate refused to work. If the two most powerful people in Alabama politics and the Governor are all going to be working at cross purposes, expect the special session to be another disaster.

3. Prison Reform is nice, but without funding it is impossible. The legislature set up an Alabama Prison Task Force that was charged with decreasing recidivism and finding alternatives to prison. The task force made recommendations to the State that they felt could lower our prison overcapacity without sacrificing the safety of the public. A bill based on those recommendations did pass but the State legislature did not fund it. Not only is there no money for prison reform, the prisons will actually have less money to spend than they had in 2015.

The US Department of Justice is threatening the State with litigation and may force a mass prisoner release at some point in the near future.  The takeaway point for those Alabama residents not in the prison system is, this would be a good time to get good theft insurance, an alarm system, a big dog, and firearms.

4. The Governor needs to make staff changes. He introduced a plan to solve the General Fund crisis back in February.  He apparently did not talk with anybody in the legislature when that plan was being drawn, because not only did the leadership not support his plan, he could not get all of it introduced and struggled to get sponsors for his legislation… none of which ever got out of a committee. By Day 28, he was on talk radio describing Republican State Senators as “libertarians” and compared one Senator to looters burning down the town. Plans announced from on high and angry rhetoric in the media is not a workable legislative strategy. 

The Governor’s staff seems nice enough; but when the last four months have been such an epic fail, somebody has to take the blame. Since both the Governor and the legislature aren’t going anywhere, a new Chief of Staff or Legislative Director might be enough to open some sort of a line of communication between the two branches of government.

5. Charter schools are coming. The GOP leadership is absolutely convinced that giving parents choices about where their kids will go to school will help education.  Some Senators threatened to bring legislation replacing the State school board if they dragged their feet on appointing people to the new Charter Schools Board. The legislative leadership believe in charters and it is almost certain that we will start to see some existing schools transform into charters over the next 24 months. How competing for students will ultimately affect local school systems is anybody’s guess.

6. The Tablet bill failed again. Senators Dial and McClendon have been campaigning to get wireless tablets into the hands of Alabama school kids for the last five years. Many wealthier systems have already done this on their own; but many poor rural system are still not on the internet and simply don’t have the funds to get there without State help.  The State rarely provides enough money for books, much less technology. This was seen as an affordable way to get texts to every child. The Senate passed the original version of SB1 with an earmark for the money from the second largest Education Trust Fund (ETF) budget in State history. The House passed the bill without a guarantee that every child gets a tablet and without funding it. The bill was in conference committee when the Senate walked out on the session Thursday.

7. Your taxes went up.  The legislature did not pass Bentley’s tax plan, but they did pass a controversial plan, SB216, sponsored by Sen. Gerald Dial (R from Lineville), allows state agencies to raise fees up to the rate of inflation or no higher than two percent a year (if inflation is higher than two percent) going back the last ten years with oversight only by the Legislative Council….not the full legislature.  The agency can only raise the fees once every five years. According to some estimates that could generate $60 million next year for the SGF, but under budgetary rules can’t be forecast into the disputed 2016 budget.  Just about any time you are forced to do business with Alabama State government they are going to take more of your money and the legislation allows them to keep this power going forward.

8. Two budgets are bad, but merging them would just be a temporary fix. The problem in the SGF budget is that when the State signed off on President Lyndon B. Johnson’s (D) Medicaid plan, the State agreed to put up the matching funds but surrendered almost all controls to the Federal government. Unfortunately most people in Alabama make very little money (comparatively) so with an abnormally high percentage of the population qualifying for low income status, more Alabamians qualify for essentially free healthcare. Medicaid is almost solely responsible for the SGF fiscal crisis. Allowing it access to the moneys in the ETF (without reforms) will eventually hurt the classroom.

9. Common Core may be here to stay.  We have had three years where repealing Common Core has been the focus of conservative groups. The Alabama Republican Executive Committee even voted 499 to 1 to repeal and it and even that didn’t move legislators. Nothing conservative groups did in the last 12 months was enough to get repeal bills voted on in either House of the legislature.  As long as the major corporations and the Business Council of Alabama (BCA) support Common Core, it is going to be imposed on the children of Alabama. For parents opposed to Common Core, pulling their kids out of the public schools may be the only option.

10. PEEHIP remains a problem.  In a narrow vote, the PEEHIP Board members voted to raid the PEEHIP Trust Fund so most state workers and retirees will not see increased copays and deductibles….in the next year.  But what about next year? Obamacare is driving up the cost of healthcare.  Over the last 8 years, state employees pay has been static, with the exception of one education employee raise.

The 2016 ETF budget was the second largest in state history (if it survives the coming special session).  The cost of providing benefits for state workers and state retirees.  Both PEEHIP and the Retirement Systems of Alabama managed defined benefit plans are costing the state increasing amounts of money from both budgets.  Lawmakers don’t want to touch these hot potatoes; but if there is any kind of economic downturn voices will call for making employees pay for more of their health benefits and move to a 401k type retirement where the State is not obligated to provide a guaranteed benefit amount.

11. Medicaid Reform passed, but is it enough?  Medicaid reform legislation, SB431 – sponsored by Senate Majority Leader Greg Reed (R-Jasper), would create integrated care networks (ICNs) which would allow more seniors to remain in their homes with more home health care rather than becoming wards of the State in nursing home care.  The legislature hopes that SB431 and 2013 legislation creating Regional Care Organizations (RCOs) that would transform Medicaid from a State run fee for service state agency to managed care, will slow the growth in Medicaid costs particularly as growing numbers of baby boomers age out of the work force. 

12. Gambling remains a divisive issue. Polls show that most Alabamians support a theoretical lottery. The proceeds generated by a lottery is uncertain, but likely would not be enough to solve the budget issue by itself.  Sen. Del Marsh is likely to unveil his gaming plan to allow a vote on the lottery and class III gambling at four dog tracks in Alabama during the special session. Nationally gambling revenues have imploded as the percentage of Americans with gambling addictions appears to be a static number and the industry is overbuilt in many places. If the special session is not until August the earliest that there could be a referendum on gambling would be November.  It would be some time after that before the gaming commission could be up and running writing the rules for the fledgling lottery and casino industry.  By the time the casinos were up and running the state would be well into the 2016 fiscal year.

 

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House passes General Fund Budget

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

The Alabama House of Representatives passed the state General Fund Budget on Tuesday.

The General Fund Budget for the 2019 fiscal year is Senate Bill 178. It is sponsored by Sen. Trip Pittman, R-Montrose. State Rep. Steve Clouse, R-Ozark, carried the budget on the House floor. Clouse chairs the House Ways and Means General Fund Committee.

Clouse said, “Last year we monetized the BP settlement money and held over $97 million to this year.”

Clouse said that the state is still trying to come up with a solution to the federal lawsuit over the state prisons. The Governor’s Office has made some progress after she took over from Gov. Robert Bentley. The supplemental we just passed added $30 million to prisons.

The budget adds $50 million to the Department of Corrections.

Clouse said that the budget increased the money for prisons by $55,680,000 and includes $4.8 million to buy the privately-owned prison facility in Perry County.

Clouse said that the budget raises funding for the judicial system and raises the appropriation for the Forensic Sciences to $11.7 million.

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The House passed a committee substitute so the Senate is either going to have to concur with the changes made by the House or a conference committee will have to be appointed. Clouse told reporters that he hoped that it did not have to go to conference.

Clouse said that the budget had added $860,000 to hire more Juvenile Probation Officers. After talking to officials with the court system that was cut in half in the amendment. The amendment also includes some wording the arbiters in the court lawsuit think we need.

The state General Fund Budget, SB178, passed 98-1.

Both budgets have now passed the Alabama House of Representatives.

The 2019 fiscal year begins on Oct. 1, 2018.

In addition to the SGF, the House also passed a supplemental appropriation for the current 2018 budget year. SB175 is also sponsored by Pittman and was carried by Clouse on the floor of the House.

SB175 includes $30 million in additional 2018 money for the Department of Corrections. The Departmental Emergency Fund, the Examiners of Public Accounts, the Insurance Department and Forensic Sciences received additional money.

Clouse said, “We knew dealing with the federal lawsuit was going to be expensive. We are adding $80 million to the Department of Corrections.”

State Representative Johnny Mack Morrow, R-Red Bay, said that state Department of Forensics was cut from $14 million to $9 million. “Why are we adding money for DA and courts if we don’t have money for forensics to provide evidence? if there is any agency in law enforcement or the court system that should be funded it is Forensics.”

The supplemental 2018 appropriation passed 80 to 1.

The House also passed SB203. It was sponsored by Pittman and was carried in the House by State Rep. Ken Johnson, R-Moulton. It raises securities and registration fees for agents and investment advisors. It increases the filing fees for certain management investment companies. Johnson said that those fees had not been adjusted since 2009.

The House also passed SB176, which is an annual appropriation for the Coalition Against Domestic Violence. The bill requires that the agency have an operations plan, audited financial statement, and quarterly and end of year reports. SB176 is sponsored by Pittman and was carried on the House floor by State Rep. Elaine Beech, D-Chatham.

The House passed Senate Bill 185 which gives state employees a cost of living increase in the 2019 budget beginning on October 1. It was sponsored by Sen. Clyde Chambliss, R-Prattville and was being carried on the House floor by state Rep. Dimitri Polizos, R-Montgomery.

Polizos said that this was the first raise for non-education state employees in nine years. It is a 3 percent raise.

SB185 passed 101-0.

Senate Bill 215 gives retired state employees a one time bonus check. SB215 is sponsored by Senator Gerald Dial, R-Lineville, and was carried on the House floor by state Rep. Kerry Rich, R-Guntersville.

Rich said that retired employees will get a bonus $1  for every month that they worked for the state. For employees who retired with 25 years of service that will be a $300 one time bonus. A 20-year retiree would get $240 and a 35-year employee would get $420.

SB215 passed the House 87-0.

The House passed Senate Bill 231, which is the appropriation bill increase amount to the Emergency Forest Fire and Insect and Disease Fund. SB231 is sponsored by Sen. Steve Livingston, R-Scottsboro, and was carried on the House floor by state Rep. Kyle South, R-Fayette.

State Rep. Elaine Beech, D-Chathom, said, “Thank you for bringing this bill my district is full of trees and you never know when a forest fire will hit.

SB231 passed 87-2.

The state of Alabama is unique among the states in that most of the money is earmarked for specific purposes allowing the Legislature little year-to-year flexibility in moving funds around.

The SGF includes appropriations for the Alabama Medicaid Agency, the courts, the Alabama Law Enforcement Agency, the Alabama Department of Corrections, mental health, and most state agencies that are no education related. The Alabama Department of Transportation gets their funding mostly from state fuel taxes.

The Legislature also gives ALEA a portion of the gas taxes. K-12 education, the two year college system, and all the universities get their state support from the education trust fund (ETF) budget. There are also billions of dollars in revenue that are earmarked for a variety of purposes that does not show up in the SGF or ETF budgets.

Examples of that include the Public Service Commission, which collects utility taxes from the industries that it regulates. The PSC is supported entirely by its own revenue streams and contributes $13 million to the SGF. The Secretary of State’s Office is entirely funded by its corporate filing and other fees and gets no SGF appropriation.

Clouse warned reporters that part of the reason this budget had so much money was due to the BP oil spill settlement that provided money for the 2018 budget and $97 million for the 2019 budget. Clouse said they elected to make a $13 million repayment to the Alabama Trust fund that was not due until 2020 but that is all that was held over for 2020.

Clouse predicted that the Legislature will have to make some hard decisions about revenue in next year’s session.

 

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Day Care bill delayed for second time on Senate floor, may be back Thursday

Sam Mattison

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By Samuel Mattison
Alabama Political Reporter

The day care bill, which would license certain day care centers in Alabama, was once again delayed on the state Senate floor after one lawmaker requested more information.

Its brief appearance Tuesday ended with state Sen. Gerald Dial, R-Lineville, saying a compromise had not yet been worked out with the bill’s detractors.

Alabama’s Senate has been hesitant to act on the legislation because of complaints of state Sen. Shay Shelnutt, R-Trussville, who has been an opponent of the bill since its introduction last year. The bill’s delay on Tuesday marks the second time its been taken off the Senate’s agenda.

The bill has had a rocky time in this year’s session, but the bill’s sponsor state Rep. Pebblin Warren, D-Tuskegee, said she is still confident about its passage out of the Legislature.

Warren, D-Tuskegee, filed the bill this session with the support of influential lawmakers including Gov. Kay Ivey, who told reporters last year that she though all day cares should be licensed.

Mainly sparked by the death of 5-year-old boy in the care of a unlicensed day care worker, the bill had great momentum coming into this year’ session.

Despite the growing support from lawmakers, Religious groups had concerns that the bill would increase state-sponsored reach into religious day cares in churches and non-profit groups.

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Spearheading the dissenters was Alabama Citizens Action Program, a conservative religious-based PAC.

Warren, proponents, and ALCAP announced a compromise to the bill while it was still in the Alabama House.

Announced by ALCAP originally, the new bill was a weaker version in that it did not require that all day cares in the state be regulated. Instead, religious-based day cares would only need to be registered if they received federal funds. At a Senate committee meeting in February, Warren said a similar requirement was about to come from federal law in Congress.

The bill moved through the House in a overwhelming vote in favor of the proposal and passed unanimously out of a Senate committee a few weeks ago.

Warren, speaking to reporters after its passage from the House, said she was unsure if the bill would encounter resistance in the upper chamber.

It was the Senate that killed the daycare bill last year amid a cramped last day where senators took the bill off the floor. The bill may face similar complications this year, as lawmakers seem to be preparing to adjourn within a few weeks.

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Fantasy sports bill fails on Senate floor

Sam Mattison

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By Samuel Mattison
Alabama Political Reporter

Would-be Fantasy Sports players in Alabama will have to wait to legally play in the state following a Senate vote on Tuesday.

The Alabama Senate decisively killed a bill to exempt fantasy sports from the state’s prohibition on gambling.

Not even entertaining a debate on the Senate floor, the proposal was killed during a vote for the Budget Isolation Resolution, which is usually a formality vote preluding a debate.

Fantasy sports are contests where participants select players from real teams to compete on fantasy teams using the real-world players’ stats.

Since 2016, the practice has been illegal in Alabama following a legal decision by the Attorney General’s Office that categorized it as gambling.

The bill’s sponsor, state Sen. Paul Sanford, R-Huntsville, predicted the bill’s failure during a committee meeting two weeks ago, where the bill passed unanimously.

Sen. Paul Sanford speaks to reporters after a Senate Committee meeting on Feb. 28, 2018. (Samuel Mattison/APR)

Speaking to reporter’s after the committee meeting, Sanford said the decision to file the bill was mainly a philosophical belief that the practice shouldn’t be illegal.

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Sanford, a fantasy sports player before its ban, said that fantasy sports are a way to bring people closer together and not a means to win money. The Huntsville senator is not seeking re-election.

The bill’s failure in the Senate follows its trajectory last year too. A similar version of the bill, also sponsored by Sanford, failed in the Senate during the final days of the 2017 Legislative Session.

Since Sanford is retiring, it is unclear if the bill will even come back next session, or if it will even have a Senate sponsor.

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House OKs bill to clarify consulting contracts by state legislators

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

Tuesday, the Alabama House of Representatives passed a bill to try to clarify how legislators accept consulting contracts under Alabama’s 2010 ethics law. Some pundits have suggested that House Bill 387 is actually designed to weaken the existing ethics law.

Sponsor state Rep. Rich Wingo, R-Tuscaloosa, argues that the legislation is merely a clarification and is intended to prevent legislators from inadvertently crossing the line into illegality.

Wingo said that his bill would require legislators to notify the Alabama Ethics Commission that they have entered into a consulting agreement in an area outside of their normal scope of work.

State Rep. Paul Beckman, R-Prattville, said, “I have never understood why members of this body were allowed to take contracts as consultants or counselors.”

Wingo said, “Never do I use the word counselor in my bill; it is consulting.”

Beckman asked, “Are we going to be getting into an area where  every time we turn around we create a bureaucratic nightmare where we have to go get an opinion. These opinions whether it is orally or written don’t hold up in a court of law.” Beckman said, “We are serving the people here but we get this admonition that we can still be a consultant if we get an opinion.”

Wingo said, “This does not apply to professions where a member is currently licensed.”

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Beckman said, “I would like to see more opinions coming out of the Ethics Commission. Right now we have the Ethics Commission competing with the Attorney General’s office over who has more authority.”

State Rep. John Rogers, D-Birmingham, said,”This happened to a friend of mine. He just got out of prison. He was a state senator and had a written letter from the Ethics Commission which his lawyer read at trial and the jury convicted him anyway.”

Rogers never named his friend, but reporters think he was talking about former state Sen. Edward Browning ‘E. B.’ McClain who spent over 22 years in the legislature until he was convicted on 47 counts of conspiracy, mail fraud, bribery, and money laundry in 2009.

A federal jury found that McClain and the Rev. Samuel Pettagrue were guilty in a scheme where McClain would secure public funds for Pettagrue’s community programs and then receive a kickback once the funds were in hand. McClain was sentenced to five years and ten months in prison. McClain was not prosecuted under the Alabama ethics law as the state has a much weaker ethics statute then. The current ethics law was passed in 2010.

Rogers said, “If they offer me a consulting contract for a field like aerospace engineering that I know nothing about they are trying to pay me off. If you can already be a consultant for something you know about why would you seek a consulting contract for something you don’t know about.

Rogers this is how they can pay you off for your vote.”

State Rep. Artis “A.J.” McCampbell said, “I don’t like making changes to things like this because we get into things called unintended consequences.”

McCampbell was reading from the bill and Wingo said, “You are reading from the original version it has completely changed.” “We worked tirelessly on this bill with the Ethics Commission this is not a fly by night bill.”

“If a member of the legislature enters into a contract to do a consulting contract outside of their normal field of work this bill requires that they consult with the Ethics Commission first,” Wingo said. “It is up to the member to notify the Ethics Commission not to the company or person offering them the money.”

State Representative Pebblin Warren, D-Tuskegee, said, “Everybody but legislators are allowed to do contract work up to $30,000.”

Rep. Wingo said, “This is not intended to be a roadblock.”

State Representative Arnold Mooney, R-Indian Springs, said, “The whole purpose of this is not to prevent members from doing work in your field.” “What you are doing is offering to protect me.”

State Representative John Knight, D-Montgomery, asked Wingo what the Alabama Attorney General said about this legislation.

Wingo replied, “I have not contacted the Attorney General.”

Knight responded, “Something from the Ethics Commission does not carry a lot of protection from the Attorney General. We have seen that in the past. I think the Attorney General and the Ethics Commission should be in agreement in the working on this.”

Wingo answered, “Maybe this is a first step.”

Rep. Laura Hall, D-Huntsville, asked, “Do we have anybody doing work outside of their regular scope of work?”

Wingo answered, “Yes I think so.”

Wingo said, “If we had had this bill four or five years ago maybe we could have been spared the embarrassment that this body experienced with the former Speaker.”

Wingo was referring to former Speaker of the House Mike Hubbard who was convicted of 12 counts of felony ethics violations in June 2016. Ironically, Hubbard is largely responsible for creating the ethics law that he was found guilty of violating 11 times in his relentless pursuit of outside contracts and personal wealth.

Unlike McClain, however, Hubbard has not yet served any of this sentence.

House Bill 387 passed 67-0 with 26 legislators abstaining.

The bill now moves to the Senate for its consideration.

(Original reporting by the Alabama Media Group’s Lisa Osborn in 2009 was consulted in this report.)

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