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The General Fund Needs Injection of New Money

By State Senator Jim McClendon

Medicaid and the entire health delivery system for the State of Alabama is a House of cards, and one of the integral cards is Medicaid itself.  If Medicaid falters, the entire system falters. Without Medicaid, hospitals will close, and the entire system will be jeopardized. Thousands,  no, hundreds of thousands of  Alabamians will be denied access to healthcare.

The RCO model was adopted by this legislature because we are broke, and it is getting worse year by year. The RCO model was adopted to reduce the ever increasing pressure on the General Fund. It was never touted as a way to stop this growing demand, but it is the only way we know to slow this growth.

Here are a couple of Medicaid financial facts concerning Medicaid’s needs for the 2017 fiscal year:

1. Medicaid needs $60M to provide the same services as provided in FY 2016.

2. Medicaid needs an additional $60M to keep the RCO program on track.

The Federal Government has offered to inject 100’s of millions of dollars into the conversion to RCOs, but, in order to qualify we must pony up the match.  That will continue to happen year after year for the next 5 years, yet, we have made NO preparation the immediate upcoming year.

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There is obviously no appetite from legislators and voters alike for any new taxes. In 2015 it took 3 legislative sessions to cobble together a meagre budget, even then cutting many General Fund agencies.

There is no appetite to combine the two money funds allowing dollars currently earmarked for education to prop up the General Fund expenses. So far I have not seen nor heard of any plan from anybody that will rescue either Medicaid or the prisons.

What plan do any of my fellow senators have in mind?  I have not seen one single suggestion, either from the House or the Senate.

I have heard that the governor will veto the General Fund budget as passed by the Senate, and I have heard that we may well override that veto.  I have heard whether we override or not, the Governor will call a Special Session to address the Medicaid issue. Will there need to be a second Special Session like last year?

Representative Harper and I have introduced bills to provide sufficient revenue to the state that could remedy this for at least the next five years and likely beyond that. It will allow us to get the full drawdown from the Federal Government, and enough to help with the prison crisis as well.

The lottery as Representative Harper and I have proposed will generate, according to the Legislative Fiscal Office, between $285M and $300M.  There is another bill in the Tourism committee that allows only Power Ball type lotteries, however is produces the state about 1/5 this amount of money.

Several people have asked me the status of SB19.  It sits quietly in committee, and I have asked Chairman and Pro Tem Marsh not to bring it to a committee vote till I know there is sufficient support for a floor vote. Quite a few senators have indicated support for the bill as it is written, but not enough.

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In fact, there is a group of senators, I have been told, that are discussing substituting a casino bill for the lottery bill.  Maybe a bill that includes both casinos and lotteries.  This would mean certain death for the bill.  These senators are saying if we can’t have casinos we would rather have nothing.  Here is another fact: casino legislation is not going to pass this body.  It is not going to happen and it doesn’t matter what rock stars are promoting it. By taking the position casinos plus lottery or nothing, we get nothing. We get a vetoed budget, we get a Special Session, and we end up right where we started.

There are other senators that fear what their voters back home will think of them for voting for a lottery, and some that have a religious conviction, and some say we are taking advantage of the poor.  The polling data is crystal clear across the state – the voters want to vote on this.  There is an overwhelming desire for this right in every senate and House district.  And, if you are concerned about the poor, let’s look at where the proceeds from a lottery will go.  It will insure the viability of Medicaid which serves pregnant women, children, and the disabled.  The purchasers of lottery tickets will cross all socio-economic lines, but the beneficiaries will be those who need our help the most.

By any yardstick, the general fund needs the injection of new money.  If this body decides to direct the dollars to the General Fund, pressure will be taken off the Education Trust Fund.  There should be a significant reduction in the quest to combine the two funds thereby diverting education dollars to go to the General Fund, and a reduction in the demands to simple transfer money from the ETF to the GF.  The General Fund will be able to make it on its own at least for the immediate future.

There are a few senators that want more details in the bill.  Bring your suggestions to me.  I am anxious to work with any of you.  I do not want to tinker with the bill such that we might open to door to casino gambling by allowing lawyers to parse the language.  If you want a casino bill, come forward with a casino bill. If you have suggestions to make this a better bill, let’s talk.

If you have a better plan to salvage Medicaid and the prisons, now is the time to bring is forward.  Today is the halfway point in this session, plenty of time to do our job.  If you don’t have an alternative, please take a close look at SB19.


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