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General Fund Budget Situation

 

By Brandon Moseley
Alabama Political Reporter

On Friday, August 7 both Houses of the Alabama legislature met briefly for uneventful sessions.  Despite the fact that this special session is rapidly drawing to a close neither House did anything over the weekend.  Monday the legislature will go into session but few have any hope that much will get done and if it does it most likely will get vetoed by Governor Robert Bentley (R) anyway.

Funding the State General Fund (SGF) has been a problem since at least the proration riddled Don Seigelman (D) administration.  Governor Bob Riley’s (R) 2003 failed Amendment One would have combined the two budgets and pumped an additional $1.1 billion a year into state government.  The people of Alabama said “NO” to all of that; but the legislature never fixed the problem in the SGF either.  Instead the state has used a variety of gimics including: Alabama Trust Fund raids; moving SGF programs to the Education Trust Fund (ETF); taking highway dollars to fund the Department of Public Safety (now part of ALEA); and taking Obama stimulus dollars to artificially pump up the SGF beyond the money that is coming in to state government for the fund.  The state needs about $198 million to fund the SGF at 2015 levels.

At the start of this special session Governor Bentley wanted to raise over $301 million in new taxes to balloon the SGF to $1.9 billion a year.  Republicans were elected promising to right size government and pledging not to raise taxes on the people of Alabama.  Republican lawmakers, who unlike Gov. Bentley, are going to run again for office and they don’t want to get hit as tax and spenders by a future opponent of course rejected Bentley’s proposals.

House Ways & Means General Fund Committee Chairman Steve Clouse (R from Ozark) hoped to introduce a much scaled back $176 million tax package, which included over $22 million in cuts.  That package could not get out of committee after House Democrats refused to back any plan without a state lottery.  A gambling referendum on the March 1 Super Tuesday ballot won’t help the 2016 SGF at all since it would take at least six months after that for the new gaming commission to get up and organized.

Senate President Pro Tem Del Marsh (R from Anniston) has proposed moving $220 million in use taxes from the ETF to the SGF.  This money (in theory) would not be missed because the legislature was predicting a $260 million surplus in the ETF.  Senate Finance and Taxation General Fund Committee Chairman Arthur Orr (R from Decatur) told AM radio host Dale Jackson on Friday that the legislature expects there to be over $350 million in the emergency stabilization fund at the end of FY 2016.  Marsh said that there was no reason to backfill that in the ETF because that loss would be more than made up for by anticipated growth in the ETF.

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The Senate appears to have balked on that plan after State School Superintendent Tommy Bice fired up education advocates with assertions that the whole ETF budget could face proration if education loses that money.  Education supporters claim that would be raiding education for Medicaid and prisoners.

After the failure of the miniaturized version of the Bentley tax increase plan the House did pass a budget that slashed $156 million from the troubled Alabama Medicaid Program.

State Representative Kyle South (R from Fayette) said on Facebook, “This past week was a tough one in Montgomery. We were presented with a budget that slashed Medicaid by $150 million (which would represent $500 million including federal matching dollars) in order to balance our states budget. This would result in devastation for all rural hospitals and nursing homes (75% of all nursing home occupants receive Medicaid/Medicare funding). I understand the reasoning behind doing this, but in light of our local situation I couldn’t bring myself to do it.”

Senator Marsh told reporters on Thursday that the Senate couldn’t and wouldn’t do it either.  Under the Alabama Constitution, only the House can introduce a proposal to raise taxes something that they could not and would not do either in the special session or the regular session.  On Friday, Orr’s Finance and Taxation General Fund Committee substituted the House’s budget with the austerity budget that the legislature passed in the regular session.  That budget had modest cuts to Medicaid and Corrections; but deeper cuts to other state agencies…….agencies that have lost over 6,000 employees in the last five years.  The Senate adjourned without taking up the budget.

Representative  Mack Butler (R from Rainbow City) said on Facebook, “The Senate has adjourned for the day and is not returning till Monday. We all needed to be here this weekend. That move basically killed any chance of a solution this session.”

When it comes back on Monday, the full Senate has to decide whether to pass the budget that came out of committee again or substitute it for yet another budget.  Whatever the Senate passes the House will then have to decide whether or not they want to accept the Senate’s changes before this session times out.  Even if a General Fund budget passes out of the legislature Governor Bentley has promised to veto it again.  A second special session appears to be almost certain at this point.

Rep. Butler said, “This session will be over Tuesday I’m hoping the governor calls us back in the next day, we’ve got to get serious and find a solution.”

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Written By

Brandon Moseley is a senior reporter with over nine years at Alabama Political Reporter. During that time he has written 8,794 articles for APR. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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