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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.

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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.

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.

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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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