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Legislators consider “new” budgeting methods

Chip Brownlee | The Trace

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By Chip Brownlee
Alabama Political Reporter

MONTGOMERY—The regular legislative session of the Alabama Legislature is set to convene in less than two weeks, but legislators are already considering another change to the State’s budgeting models in both the General Fund and the Education Trust Fund.

On Tuesday, members of the House and Senate General Fund and Education Trust Fund budget committees met in Montgomery to hear pitches for two different types of budgeting models: evidence-based budgeting for the General Fund and outcome-based budgeting for the Education Trust Fund.

In both models, results should be the key to appropriations, according to the presenters from The Pew Charitable Trusts, the MacArthur Foundation, the Tennessee Higher Education Commission and the Lumina Foundation’s Strategy Labs.

Ronojoy Sen, a senior associate with the Pew-MacArthur Results First Initiative, and Toby Barker, a Mississippi state representative, told legislators they should consider allocating funds on an evidence-first approach — funding agencies based on a cost-benefit analysis and whether the State gets a good “bang for its buck.”

Mississippi uses evidence-based budgeting, Barker said, and has seen success.

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“We’re probably halfway into that, but we’re starting to see results.”

The funding model makes agencies justify their spending and appropriations. Alabama has used a similar approach in the past, under the administration of Gov. Bob Riley. The program, called SMART budgeting, required agencies to goals and justify their spending accordingly.

But legislators abandoned the old performance-based budgeting program in 2012 under Bentley because the program didn’t seem to make a meaningful difference in appropriations, largely because the State earmarks most of its revenue.

In Mississippi, it’s unclear how successful the budgeting scheme is. Earlier this month, Gov. Phil Bryant, R, announced $50 million emergency budget cuts, the fourth round of cuts in a year. The governor was forced to play the cutting game because, like Alabama, Mississippi has a balance budget requirement.

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For education, the topic of conversation: implementing an outcome-based budgeting model in Alabama — a form of budgeting that rewards performance results like degree attainment instead of student enrollment.

Mike Krause, executive director of THEC, said Tennessee was able to become the first state in the country that provides free community college for both adults and recent high school graduates.

“We made a decision to fund our colleges solely based on the number of Tennesseans that succeed, not the number of students who show up,” Krause.

In Tennessee, students are covered to attend any of the state’s 13 community colleges or 27 technical colleges without paying any tuition. Krause said the state’s ability to provide that funding based on saving from outcome-based budgeting.

In 2015, Tennessee began implementing its “Drive to 55” initiative, with the goal of equipping 55 percent of Tennesseans with a college degree or secondary certification by 2025.

Drive to 55 encompasses the Tennessee Promise, a scholarship program that provides the free community college tuition for high school graduates, and the Tennessee Reconnect, a grant program that allows any adult to attend and earn a diploma at any of the Tennessee Colleges of Applied Technology.

“If you’re not inspired by this, I don’t what will do it,” said Sen. Arthur Orr, the chairman of the Senate education finance and taxation committee. “We can do much better in our state … at how we approach education and higher ed for our students.”

Alabama currently sits fourth from the bottom in terms of secondary education attainment across the U.S. About 36.7 percent of Alabamians have some type of post-secondary educations.

On the other hand, about 23 percent of Alabamians have “some college, but no degree” indicating that they dropped out of college, and they likely incurred some debt in the process. The outcome-based budget process, Krause said, is intended to make universities focus on success instead of enrollment.

Implementing the performance-based budgeting formulas would reward universities based on different formulas that take into account graduation rates, retainment and other indicators of academic success.

Previously, schools in Tennessee, like Alabama’s, were awarded state funding depending on how many students they had enrolled on the 14th day of class, among other parameters.

Twenty-five states across the U.S. have begun implementing some type of outcome-based budgeting model, and eight others are in development.

With the new program, each student that hits credit-hour-based benchmarks triggers new funding for their school. In addition, the funding design, Klause said, has also led to more mandatory advising, one-stop guidance shops and early warning systems that trigger counseling for students who stop attending classes.

The plan would likely take several years and several million dollars to fully implement and would require cooperation from the state’s four-year and community college systems.

Sen. Gerald Dial, R-Lineville, raised concern students would veer away from more expensive four-year colleges in favor of the tuition-free community colleges if a plan like Promise was introduced in Alabama. Krause, who is the head of the higher education authority of his state, said they haven’t seen that problem.

“If you were one of the students trying to decide between the University of Tennesee and Tennessee Tech University, you were probably not [who were we trying to reach],” Krause said. “I’m trying to reach the student who’s trying to decide between going straight to work at a construction site or doing something else in the college sector.”

Tennessee has seen only a 3 percent shift from it’s public four-year universities to its community colleges over the years of implementation, Krause said. Additionally, the state has seen a decrease in student debt and an increase the college attendance rate of 4.6 percent over a one-year period.

Bill Poole, R-Tuscaloosa, was also concerned that some universities, like the regional four-year schools and HBCUs, would be deterred from taking low-income or at-risk students who may not perform at a high level.

Krause said the system in Tennessee allows universities to weight their formula in a way that provides more funding for at-risk students and adults, resulting in nearly two-thirds more funding for those populations.

One problem will likely prevent legislators from implementing a plan like Promise or Reconnect in Alabama: the lack of an education lottery. During Krause’s presentation, Rep. Pebblin Warren, D-Tuskegee, asked how Tennessee paid for the programs, other than the savings from performance-based budgeting.

More than $1.4 million in money raised from Tennessee’s education lottery helped the state cover the 5,000 adults who have signed up for tuition-free community college. The rest was paid for through federal pell grants.

Tennessee’s lottery, like Georgia and Florida’s, also funds the HOPE scholarship, a state-supported merit-based scholarship that gives students the funds to attend any of the state’s four-year universities.

Last year, Gov. Robert Bentley proposed a lottery bill to the state Legislature, but it failed during a special session over the summer. His bill, however, was not intended to supply more funding for education.

Instead, it was designed to prop up the state’s beleaguered General Fund, which has faced shortfalls for years caused mainly by increasing costs in the Department of Corrections and the state Medicaid Agency.


Email Chip at [email protected] or follow him on Twitter.

Chip Brownlee is a former political reporter, online content manager and webmaster at the Alabama Political Reporter. He is now a reporter at The Trace, a non-profit newsroom covering guns in America.

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Tuberville calls for term limits, balanced budget and lobbying reform

Tuberville has also made a major media buy across the state to trumpet this message.

Brandon Moseley

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Republican Senate candidate Tommy Tuberville (TUBERVILLE CAMPAIGN)

Senate candidate Tommy Tuberville’s campaign began emphasizing key structural reforms that the Republican nominee hopes to advance if elected to the U.S. Senate including congressional term limits, withholding lawmakers’ paychecks unless a balanced budget is passed and a ban on former officials becoming lobbyists.

“Only an outsider like me can help President Trump drain the Swamp, and any of the proposals outlined in this ad will begin the process of pulling the plug,” Tuberville said in a statement. “Doug Jones has had his chance, and he failed our state, so now it’s time to elect a senator who will work to fundamentally change the way that Washington operates.”

Tuberville has also made a major media buy across the state to trumpet this message.

“You know Washington politicians could learn a lot from the folks in small town Alabama, but Doug Jones … he’s too liberal to teach them,” Tuberville added.

Polls consistently show that term limits are popular with people across both political parties, but the U.S. Supreme Court has ruled that imposing term limits would be adding a qualification to be a member of Congress and that can only be done by constitutional amendment.

It is an unspoken truth that when Americans send someone to Congress they never come back. They either keep getting re-elected like Alabama’s own Sen. Richard Shelby, who is in his sixth term in the Senate after four terms in the U.S. House of Representatives. On the other hand, they may become lobbyists getting paid to influence their colleagues on behalf of corporations, foreign governments or some well funded non-government organization.

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Tuberville said he would ban that practice.

A balanced budget amendment almost passed in the 1980s and again in the 1990s.

Since that failure, Congress has increasingly passed bigger and bigger budget deficits. The U.S. government borrowed more money during the eight years of President George W. Bush’s presidency than the government had borrowed in the first 224 years of the country combined.

President Barack Obama followed and the TARP program propped up the post-Great Recession economy. Rather than cutting the deficit, President Donald Trump invested billions in the military and a tax cut without cutting domestic spending. The 2020 coronavirus crisis has further grown the budget.

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The government has borrowed trillions to prop up the economy and provide stimulus while investing billions into medical research and treating the virus victims. Congress is currently debating a fifth stimulus package that would add more to the deficit.

Both a balanced budget amendment and a term limits amendment would have to be ratified by the states if passed by Congress. Tuberville is challenging incumbent Sen. Doug Jones, D-Alabama.

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House passes General Fund Budget

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

The Alabama House of Representatives passed the state General Fund Budget on Tuesday.

The General Fund Budget for the 2019 fiscal year is Senate Bill 178. It is sponsored by Sen. Trip Pittman, R-Montrose. State Rep. Steve Clouse, R-Ozark, carried the budget on the House floor. Clouse chairs the House Ways and Means General Fund Committee.

Clouse said, “Last year we monetized the BP settlement money and held over $97 million to this year.”

Clouse said that the state is still trying to come up with a solution to the federal lawsuit over the state prisons. The Governor’s Office has made some progress after she took over from Gov. Robert Bentley. The supplemental we just passed added $30 million to prisons.

The budget adds $50 million to the Department of Corrections.

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Clouse said that the budget increased the money for prisons by $55,680,000 and includes $4.8 million to buy the privately-owned prison facility in Perry County.

Clouse said that the budget raises funding for the judicial system and raises the appropriation for the Forensic Sciences to $11.7 million.

The House passed a committee substitute so the Senate is either going to have to concur with the changes made by the House or a conference committee will have to be appointed. Clouse told reporters that he hoped that it did not have to go to conference.

Clouse said that the budget had added $860,000 to hire more Juvenile Probation Officers. After talking to officials with the court system that was cut in half in the amendment. The amendment also includes some wording the arbiters in the court lawsuit think we need.

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The state General Fund Budget, SB178, passed 98-1.

Both budgets have now passed the Alabama House of Representatives.

The 2019 fiscal year begins on Oct. 1, 2018.

In addition to the SGF, the House also passed a supplemental appropriation for the current 2018 budget year. SB175 is also sponsored by Pittman and was carried by Clouse on the floor of the House.

SB175 includes $30 million in additional 2018 money for the Department of Corrections. The Departmental Emergency Fund, the Examiners of Public Accounts, the Insurance Department and Forensic Sciences received additional money.

Clouse said, “We knew dealing with the federal lawsuit was going to be expensive. We are adding $80 million to the Department of Corrections.”

State Representative Johnny Mack Morrow, R-Red Bay, said that state Department of Forensics was cut from $14 million to $9 million. “Why are we adding money for DA and courts if we don’t have money for forensics to provide evidence? if there is any agency in law enforcement or the court system that should be funded it is Forensics.”

The supplemental 2018 appropriation passed 80 to 1.

The House also passed SB203. It was sponsored by Pittman and was carried in the House by State Rep. Ken Johnson, R-Moulton. It raises securities and registration fees for agents and investment advisors. It increases the filing fees for certain management investment companies. Johnson said that those fees had not been adjusted since 2009.

The House also passed SB176, which is an annual appropriation for the Coalition Against Domestic Violence. The bill requires that the agency have an operations plan, audited financial statement, and quarterly and end of year reports. SB176 is sponsored by Pittman and was carried on the House floor by State Rep. Elaine Beech, D-Chatham.

The House passed Senate Bill 185 which gives state employees a cost of living increase in the 2019 budget beginning on October 1. It was sponsored by Sen. Clyde Chambliss, R-Prattville and was being carried on the House floor by state Rep. Dimitri Polizos, R-Montgomery.

Polizos said that this was the first raise for non-education state employees in nine years. It is a 3 percent raise.

SB185 passed 101-0.

Senate Bill 215 gives retired state employees a one time bonus check. SB215 is sponsored by Senator Gerald Dial, R-Lineville, and was carried on the House floor by state Rep. Kerry Rich, R-Guntersville.

Rich said that retired employees will get a bonus $1  for every month that they worked for the state. For employees who retired with 25 years of service that will be a $300 one time bonus. A 20-year retiree would get $240 and a 35-year employee would get $420.

SB215 passed the House 87-0.

The House passed Senate Bill 231, which is the appropriation bill increase amount to the Emergency Forest Fire and Insect and Disease Fund. SB231 is sponsored by Sen. Steve Livingston, R-Scottsboro, and was carried on the House floor by state Rep. Kyle South, R-Fayette.

State Rep. Elaine Beech, D-Chathom, said, “Thank you for bringing this bill my district is full of trees and you never know when a forest fire will hit.

SB231 passed 87-2.

The state of Alabama is unique among the states in that most of the money is earmarked for specific purposes allowing the Legislature little year-to-year flexibility in moving funds around.

The SGF includes appropriations for the Alabama Medicaid Agency, the courts, the Alabama Law Enforcement Agency, the Alabama Department of Corrections, mental health, and most state agencies that are no education related. The Alabama Department of Transportation gets their funding mostly from state fuel taxes.

The Legislature also gives ALEA a portion of the gas taxes. K-12 education, the two year college system, and all the universities get their state support from the education trust fund (ETF) budget. There are also billions of dollars in revenue that are earmarked for a variety of purposes that does not show up in the SGF or ETF budgets.

Examples of that include the Public Service Commission, which collects utility taxes from the industries that it regulates. The PSC is supported entirely by its own revenue streams and contributes $13 million to the SGF. The Secretary of State’s Office is entirely funded by its corporate filing and other fees and gets no SGF appropriation.

Clouse warned reporters that part of the reason this budget had so much money was due to the BP oil spill settlement that provided money for the 2018 budget and $97 million for the 2019 budget. Clouse said they elected to make a $13 million repayment to the Alabama Trust fund that was not due until 2020 but that is all that was held over for 2020.

Clouse predicted that the Legislature will have to make some hard decisions about revenue in next year’s session.

 

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Day Care bill delayed for second time on Senate floor, may be back Thursday

Sam Mattison

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By Samuel Mattison
Alabama Political Reporter

The day care bill, which would license certain day care centers in Alabama, was once again delayed on the state Senate floor after one lawmaker requested more information.

Its brief appearance Tuesday ended with state Sen. Gerald Dial, R-Lineville, saying a compromise had not yet been worked out with the bill’s detractors.

Alabama’s Senate has been hesitant to act on the legislation because of complaints of state Sen. Shay Shelnutt, R-Trussville, who has been an opponent of the bill since its introduction last year. The bill’s delay on Tuesday marks the second time its been taken off the Senate’s agenda.

The bill has had a rocky time in this year’s session, but the bill’s sponsor state Rep. Pebblin Warren, D-Tuskegee, said she is still confident about its passage out of the Legislature.

Warren, D-Tuskegee, filed the bill this session with the support of influential lawmakers including Gov. Kay Ivey, who told reporters last year that she though all day cares should be licensed.

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Mainly sparked by the death of 5-year-old boy in the care of a unlicensed day care worker, the bill had great momentum coming into this year’ session.

Despite the growing support from lawmakers, Religious groups had concerns that the bill would increase state-sponsored reach into religious day cares in churches and non-profit groups.

Spearheading the dissenters was Alabama Citizens Action Program, a conservative religious-based PAC.

Warren, proponents, and ALCAP announced a compromise to the bill while it was still in the Alabama House.

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Announced by ALCAP originally, the new bill was a weaker version in that it did not require that all day cares in the state be regulated. Instead, religious-based day cares would only need to be registered if they received federal funds. At a Senate committee meeting in February, Warren said a similar requirement was about to come from federal law in Congress.

The bill moved through the House in a overwhelming vote in favor of the proposal and passed unanimously out of a Senate committee a few weeks ago.

Warren, speaking to reporters after its passage from the House, said she was unsure if the bill would encounter resistance in the upper chamber.

It was the Senate that killed the daycare bill last year amid a cramped last day where senators took the bill off the floor. The bill may face similar complications this year, as lawmakers seem to be preparing to adjourn within a few weeks.

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Fantasy sports bill fails on Senate floor

Sam Mattison

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By Samuel Mattison
Alabama Political Reporter

Would-be Fantasy Sports players in Alabama will have to wait to legally play in the state following a Senate vote on Tuesday.

The Alabama Senate decisively killed a bill to exempt fantasy sports from the state’s prohibition on gambling.

Not even entertaining a debate on the Senate floor, the proposal was killed during a vote for the Budget Isolation Resolution, which is usually a formality vote preluding a debate.

Fantasy sports are contests where participants select players from real teams to compete on fantasy teams using the real-world players’ stats.

Since 2016, the practice has been illegal in Alabama following a legal decision by the Attorney General’s Office that categorized it as gambling.

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The bill’s sponsor, state Sen. Paul Sanford, R-Huntsville, predicted the bill’s failure during a committee meeting two weeks ago, where the bill passed unanimously.

Sen. Paul Sanford speaks to reporters after a Senate Committee meeting on Feb. 28, 2018. (Samuel Mattison/APR)

Speaking to reporter’s after the committee meeting, Sanford said the decision to file the bill was mainly a philosophical belief that the practice shouldn’t be illegal.

Sanford, a fantasy sports player before its ban, said that fantasy sports are a way to bring people closer together and not a means to win money. The Huntsville senator is not seeking re-election.

The bill’s failure in the Senate follows its trajectory last year too. A similar version of the bill, also sponsored by Sanford, failed in the Senate during the final days of the 2017 Legislative Session.

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Since Sanford is retiring, it is unclear if the bill will even come back next session, or if it will even have a Senate sponsor.

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