By Brandon Moseley
Alabama Political Reporter
On Monday, August 15, the Alabama Legislature will return for a Special Session to address lingering problems with the State General Fund (SGF). This is the third Special Session that Alabama Governor Robert Bentley has called to address chronic problems in the SGF caused by rapidly increasing costs of the Alabama Medicaid program, which is growing far faster than the revenues earmarked for the SGF or the State economy itself. State Representative Christopher John England (D-Tuscaloosa) provided a preview of the Special Session to his Facebook followers and constituents.
Rep. England said, “The Legislature goes into Special Session tomorrow at 4 PM to consider legislation authorizing a vote on a lottery.”
Rep. England said that there were several facts to consider.
First of all, “This will be a Constitutional Amendment therefore the people of Alabama will have the ultimate veto power. If the Legislature were to pass a lottery bill, it would bypass the Governor’s desk and go straight to the November ballot.”
Second, “In order to make it to the November ballot, the bill must pass by August 24th. A bill takes at least five legislative days to pass so we are not talking about a lot of time to work this bill through the process.”
Third, “Since it is a constitutional amendment, it requires more than a simple majority to pass in each respective body. It requires 3/5 of the members present and voting in both the House and in the Senate.”
Fourth, “Passing a lottery during this special session will NOT have any impact on the current approximately 80 million dollar Medicaid shortfall in next year’s budget. We will still have to find money for next year’s shortfall or cut the Medicaid budget by October 1st.”
Rep. England said that, “The Lottery is not a permanent solution. If the cost increases in Medicaid continue on its current pace, then by the time we realize any revenue from the lottery it will already be spent.”
The Democrat from Tuscaloosa said that, “There are a number of different proposals being offered. There are proposals that include authorizing a simple lottery to authorizing a lottery and electronic lottery terminals in counties that have local constitutional amendments already allowing pari-mutuel gaming. Each proposal also directs the money to either the general fund, the education trust fund, or a split of the proceeds to both funds.”
State Representative Kyle South (R-Fayette) said that Rep. England, “Does an excellent job of summing up what most certainly be a challenging few days!!”
In the 2016 Regular Legislative Session the legislature level funded the costly Alabama Medicaid program at $700 million. That is just the State share of the program. With federal matching dollars the program actually will spend close to $2 billion. Last year the legislature moved $80 million in use taxes from the education trust fund (ETF) to the SGF and raised $80 million in taxes on cigarettes, nursing home beds, and prescription drugs in order to meet the cost of the program.
In January Gov. Bentley asked the legislature for another $85 million for the fiscal year 2017 Medicaid budget. Roughly $50 million of that is to fund the 2013 Medicaid reform bill that would switch the program from a government run fee for service model to a provider managed model with regional care organizations (RCOs) managing the plan. Fully funding the RCOs would mean hundreds of millions of dollars in federal matching dollars and would mean fulfilling the terms the state agreed to follow with the Obama Administration in allowing the waiver. Gov. Bentley had planned to pay for this by moving another $85 million in use taxes from the ETF to the SGF. Education would deal with the loss of the funds by giving the teachers a much more modest pay increase. The legislature balked at that plan and instead left the ETF whole and gave those projected higher ETF revenues to teachers and education employees.
Level funding Medicaid at $700 million a year caused this “crisis.” Some have claimed this is no crisis at all and that by simply cutting the reimbursements that Medicaid pays doctors back to pre-Obamacare amounts (implemented on August 1) and postponing the rollout of the RCOs another year the legislature does not need to give Medicaid any additional dollars for the fiscal 2017 year. There will be a new President in 2017 and that could change the landscape for the jointly run Medicaid program.