By Brandon Moseley
Alabama Political Reporter
Wednesday, January 10, 2018, Alabama Finance Director Clinton Carter met with journalists at the Capitol to discuss the state’s budgets. Carter briefed the press on Gov. Kay Ivey’s General Fund and Education Trust Fund budget proposals.
Carter said, “We are really excited about this budget.” Carter said that state revenues, “Are historically great by all measures.” “The economy really is booming.” Carter said that state income tax revenues and sales tax revenues, which are earmarked for the education trust fund (ETF), are at all-time highs. The revenues funding the general fund, primarily insurance premium taxes,
Carter said that this is, “One of the best budgets we have seen in years.” However Carter said that the Ivey administration is advising, “Proceeding with caution.” “It would be unwise to get drunk and spend based on a false sense of positive momentum.”
Carter warned that there are some issues that could affect the budget. The first is if Congress changed how Medicaid is funded and passed more of the costs on to the states. The second is Corrections. A federal judge has found that the state needs to upgrade the mental healthcare that Alabama’s prisoners receive. That is addressed in the budget. If the court rules that the state needs to further address corrections that could be a problem. The third possibility is if Congress switches from funding the children’s health insurance program (CHIP) from fully funded by the federal government to 80 percent federal and 20 percent state funded. Carter said that this budget has a $50 million buffer, so that if any of these worst case scenarios happens the state can deal with it. The worst case scenario would be if all three happened. That would be a problem.
Carter said that 2020 Medicaid budget increases $50 million. The good news is that the booming economy means that fewer people are going on Medicaid. Once people go on Medicaid they generally remain there; but the rate of going on Medicaid has decreased and pharmaceutical costs have improved.
Carter said that the state is increasing funding for prisons to address staffing and deteriorating facilities. That is being phased in over a three-year period. The Department of Corrections would have the option of either having across the board pay increases or offering signing and retention bonuses. Corrections has a new healthcare contract that combines health care services with mental health services. $30 million a year of that is for the healthcare services and the other $20 million is for mental health services for a total of $50 million a year. Corrections will have funding for adding another 100 corrections officers.
Carter said that CHIP is funded through the end of February; but that he anticipates that the Congress would vote to continue funding 100 percent of CHIP costs and even if the state did have to pick up 20 percent of the cost of CHIP that would not affect the state immediately. There would be time to address those needs so that the children will still be insured.
“We don’t believe there is much risk of a change in CHIP,” Carter said. “We estimate the cost of going from 100 percent federal funding to an 80:20 match at $30 million in 2020 and $75 million in 2021. “If Congress made a change it would not be in this budgets. There really is no rik of the entire program disappearing.”
Carter said that there is money in the budgets for cost of living adjustment (COLA) to both state employees and to teachers and education employees. There will be 3 percent in general fund and 2.5 percent for education. This is “Without raising taxes on the people of Alabama. The money for the COLA’s is being funded separately so even agencies that are level funded are not being asked to fund the COLA out of their line item appropriation.
Carter said that there is additional funding for ALEA (Alabama Law Enforcement Agency) to hire 100 new officers.
The Department of Human Resources (DHR) is getting additional money to replace outdated software.
“With a few exceptions we are fully finding the Alabama Reading Initiative,” Carter said. There is some money in there for transportation and buses. The EFT has increased by $216 million, $60 million of that is for the COLA. Carter said that the budget is funding an additional 130 teachers.
Carter said that the state funded PEHIP at $800 per person last year and they have asked for $800 this year. There is discussion around the lawsuit the AEA has filed. There is money in escrow they would reimburse $75 million to individuals if PEHIP loses the suit. Carter said that he does serve on that board. “Personally speaking it seems like there is a consensus opinion that there would be a compromise.”
The Alabama Political Reporter asked when the general fund budget was being cut the state Auditor’s office took a disproportionate share of the cuts. Is there any plans to restore that funding to the Auditor’s office?
“We have had discussions with the state Auditor,” Carter said. “We are working with them to alleviate some of their cost and burden.” “I would not say that it was disproportionate.” “The cuts to the Governor’s office has been greater.” The Governor’s office was cut 50 percent, the Attorney General’s office was cut, the Secretary of State’s office does not even get a general fund appropriation any more. There is no restoration of the funding for the Auditor in this budget. The Auditor’s office is losing an employee and the Comptroller’s office has taken over some of the duties and responsibilities of that person.
Reporters asked about the legislature making changes. “We are more willing to negotiate on a number of areas. It is there budget too,” Carter said.
APR asked: Because Governor Robert Bentley did not expand Medicaid expansion, there are a number of people who do not make enough money to get even subsidized health insurance. The Republicans in Congress had promised to repeal Obamacare; but the Senate did not do that, so Obamacare is still in place. Is there any sort of plan in place, not necessarily to expand Medicaid, but to provide some sort of a subsidy or a plan to help those uninsured people get coverage?
Carter answered, “That is outside of the purview of the Finance Director.”
The Governor’s proposed budget now goes to the legislature who will decide whether or not to pass the budgets.
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.
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.
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.
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.
House passes General Fund Budget
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.
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.
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.
Day Care bill delayed for second time on Senate floor, may be back Thursday
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.
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.
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.
Fantasy sports bill fails on Senate floor
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.
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.
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.