By Susan Britt
Alabama Political Reporter
MONTGOMERY—As the Senate gathers this week, using BP Settlement monies to pay back the State’s debts and assist in the Medicaid crisis will again be up for debate.
HB36, sponsored by House Ways and Means General Fund Chairman Representative Steve Clouse (R-Ozark) has already been approved by the House with a vote of 91-10. It passed out of Senate Committee late last month and was introduced on the floor. The bill creates an Economic Settlement Authority to issue $639 million in bonds payable by the BP Settlement funds. The bill would pay back $161 million borrowed in 2009 and $437 million from the Alabama Trust Fund borrowed in 2013 of which the State still owes $422 million. Both debts were incurred because of deficits in previous General Fund Budgets.
Remaining funds, $191 million, are schedule to go to Baldwin and Mobile counties for two road projects. Senator Bill Hightower (R-Mobile) and Senator Trip Pittman (R-Daphne) are pushing to make sure the directions of those funds remain intact. Other senators from North Alabama argue that those remaining funds should be distributed statewide.
The bill’s plan for the “Medicaid fix” comes from a savings of $35 million in interest on the loans and would be paired with $35 million from the Governor’s office that will be directed toward Medicaid.
The gap in funding for the State to take advantage of the Medicaid RCO program is $85 million. The BP fix would still leave an outstanding balance of $15 million.
Cuts to physicians began on August 1, causing many to layoff employees, especially pediatricians. The settlement money only fixes Medicaid for one fiscal year. It does not solve problems in future budgets.
The bill was carried over when the Senate adjourned last month.