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Nine stories to keep an eye on in 2019

Chip Brownlee

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9. Who will challenge Sen. Doug Jones in 2020?

It may have been only a year ago that Doug Jones won in a historic victory that sent a Democrat from Alabama to the U.S. Senate for the first time in a quarter century, but he’s up for re-election in 2020.

With that election just around the corner, a slate of Republican candidates will begin announcing their candidacies in 2019. No one is guaranteed the Republican nomination, but there are few names leading the pack. Rep. Bradley Byrne — a former gubernatorial candidate and Republican from South Alabama — has all but announced his candidacy. State Auditor Jim Zeigler, a long-shot candidate, mind you, has launched an exploratory campaign. And could former senator and attorney general Jeff Sessions run for his old seat?

These questions will likely be answered in 2019 as Republicans prepare for what could be a heated and highly contested primary in 2020.


8. Prison construction and lawsuits

The state of Alabama’s aging and dilapidated prisons have been an issue for years. Most of them were built in the 1960s and 1970s, and the existing prisons would require more than $400 million in renovations to be brought back up to standards. At the same time, they remain overcrowded despite sentencing reform, and the constitutionality of Alabama’s prisons have been routinely challenged. Federal judges have said Alabama’s prison conditions are unconstitutional, and another lawsuit remains to be decided.

Lawmakers tried twice in 2016 and 2017 to pass a billion-dollar prison construction plan pushed by Gov. Robert Bentley and ADOC Commissioner Jeff Dunn, but both attempts failed. The Department of Corrections has hinted that it may try a version of that plan again during the 2019 session. It’s also possible they could try leasing instead of building their own prisons.

Either way, the state of Alabama’s prisons will be on the agenda in 2019, and the second phase of a massive lawsuit brought by the SPLC could be on the docket next year, though no start date has been set.

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Mike Hubbard looks toward his family after receiving sentencing on Friday, July 8, 2016, in Opelika, Ala.
Todd Van Emst/Opelika-Auburn News/Pool

7. The Supreme Court’s Hubbard decision

It’s been more than four years since then-House Speaker Mike Hubbard was indicted on 23 felony ethics charges in 2014. In 2016, he was convicted of 12 of those charges. Following that guilty verdict, Hubbard began appealing his conviction — a process that has been drawn out and will likely last into 2019.

Earlier this year, the Court of Criminal Appeals upheld 11 of the 12 counts, but Hubbard appealed again to the Supreme Court, which is reviewing his case. Their decision on whether to take up his case could be released in early 2019. If they take up the case, it could be months or more than a year before they reach a decision. But if they deny his appeal, Hubbard could finally begin his four-year prison sentence. He remains free on appeal bond until a final decision is made.

The Supreme Court’s decision on Hubbard’s case will have lasting implications for Alabama’s ethics laws. Though Hubbard championed them in 2010, his conviction in 2016 has led to a near all-out onslaught on the laws. A Supreme Court decision denying Hubbard’s appeal or upholding his conviction could lend some credence to the laws, which remain under scrutiny in the state Legislature.


6. Can Democrats become relevant again?

Democrats were hopeful in 2018 that they could cut into some of the Republican supermajority in state Legislature, their hold on most seats in the state’s congressional delegation and their grip on all statewide elected offices. But they failed.

Democrats weren’t able to take any Republican-held seats in Congress, and Democrats even lost seats in both chambers of the state Legislature. Democrats have less power now in Alabama than ever since the Reconstruction Era — at least outside the state’s biggest cities.

If they want to become relevant statewide again, they’ll have to find a way to win. Some Democrats, including Sen. Doug Jones, have called for new leadership of the Alabama Democratic Party. But Nancy Worley, the ADP chairwoman, and Joe Reed, the leader of the powerful Alabama Democratic Conference, have held onto their power.

It isn’t clear where Democrats go from here. If they hope to have any chance to hold onto their lone U.S. Senate seat and gain any seats in the House in 2020, they’ll have to make some changes in 2019.


5. Katie Britt takes over at BCA

The Business Council of Alabama — one of the state’s largest and most influential lobbying organizations – has a new leader, Katie Britt. Sen. Richard Shelby’s former chief of staff, Britt is expected to bring a new outlook to the organization, which fell under fire during the final few years of former president and CEO Billy Canary’s tenure.

A number of high-dollar members — from Blue Cross Blue Shield of Alabama to Alabama Power and Regions Bank — temporarily withdrew from the group because of their dissatisfaction with Canary’s leadership style. While the big players are back, Britt — the first woman to serve as the organization’s president and CEO — will face a challenge in renewing the organization’s strength and influence.


4. The Ethics Commission

The Alabama Ethics Commission has been under fire for years for lax enforcement of the state’s ethics laws. Secretary of State John Merrill and a number of others, including opinion columnists at APR and other news organizations, have criticized the commission for writing off campaign finance fines and for collapsing separate campaign finance violations into fewer charges.

On top of that, the commission is increasingly referring violations to district attorneys to prosecute. That practice — known as shopping for a DA — has come under fire because some have said the commission is picking DAs who will go easy on those accused of violating the law.

The Ethics Commission has one primary goal — to uphold the ethics laws — but it has been routinely accused, by a handful of lawmakers and journalists alike, of doing the opposite. And the members on the commission are largely unaccountable to anyone other than themselves.

As we enter 2019, it’s clear that the Ethics Commission will face more big decisions, and it doesn’t look like it’s going to get any tougher with its charge. That reality exists while lawmakers are considering a massive rewrite of the ethics laws and there appears to be no champion of strong ethics laws.


3. Attorney General Marshall

Despite winning re-election by a large margin in November, Attorney General Steve Marshall had a rough year. His primary for attorney general was toughly contested, and one of his former Republican opponents accused him of illegally taking a PAC-to-PAC transfer.

The Ethics Commission, in a 3-to-2 vote, said it had insufficient evidence to refer him for prosecution under the state ethics laws. That’s one vote short.

Marshall recently fired Matt Hart, the chief of the public corruption division in his office. Hart’s firing was met with intense criticism by some, but many lawmakers were at least privately supportive of the decision. Hart had prosecuted a number of public corruption cases involving both Republicans and Democrats.

At the same time, Marshall is leading what could be a massive re-write of the state’s ethics laws. He’s chairing the committee convened to discuss the re-write, all while under scrutiny by opponents who say he is too lax on the laws.

As we head into 2019, the scrutiny of Marshall is sure to continue as the committee drafting the ethics re-write continues its work.


2. Gov. Kay Ivey begins her first full term

Gov. Kay Ivey is one of the most popular governors in America, and she won her first full term as governor by wide margins in November. She’ll be sworn in on Jan. 14 to begin a four-year term. Ivey has largely avoided controversy during her first year and a half of being governor, but questions have loomed about her health, though she has maintained she is healthy.

During her first partial term, Ivey promised to “right the ship of state,” a promise she says she’s kept. She removed lobbyists from state boards and commissions and has championed Alabama’s improving economy.

But as she begins her first full term, she’ll face a number of obstacles. Among them, issues on this list: a gas tax, prisons and the ethics law re-write. The first year of her term could be consumed by Republican in-fighting on these issues and others.


1. Gas tax and infrastructure

As 2019 rolls around, so does the beginning of the next legislative quadrennium. The quadrennium refers to the four-year term of the Legislature. With that, comes a new freshman class of state legislators ready to get to work. First on their plate this year is assumed to be a gas tax, which some lawmakers have been calling for for years but each year it has failed to pick up the steam needed to pass.

This year looks like the year, if ever. Republican leadership of both the House and the Senate, including Senate President Pro Tem Del Marsh and Speaker Mac McCutcheon, and Gov. Kay Ivey have named the gas tax as their top priority. They say its needed to improve and add capacity to the state’s highway system and, perhaps more importantly, to replace aging bridges.

The Legislature hasn’t increased the gas tax since 1992 when a nickel was added. Proponents of the increase say the proposed 18 cent-per-gallon increase is needed to catch up as the state lagged behind in maintaining its road infrastructure.

But opponents, including the more conservative, anti-tax wings of the GOP and some Democrats, fiercely oppose the measure. Some Democrats have said the increase would be more detrimental for the working poor, who would feel more of its effects.

As the legislative session begins, expect a big battle — perhaps an up-hill one — on the gas tax.

 

Economy

High death rate, low immigration levels leave Alabama with one of nation’s lowest growth rates

Chip Brownlee

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New numbers from the U.S. Census Bureau shows that Alabama has one of the nation’s lowest growth rates.

“As Alabama approaches its 200th birthday, the state is still adding population but at a slower rate than most of its Southeastern neighbors,” analysts wrote in a Public Affairs Research Council of Alabama analysis of the Census Bureau numbers.

The Census Bureau’s data release in December includes state-level estimates for the underlying components of population growth, and in some cases, population decrease.

These numbers come at a time when state leaders are increasingly concerned about the 2020 Census and reapportionment of Congressional seats that will follow.

They fear Alabama may lose one of its seven congressional seats to another state that’s growing faster.

The states that could steal a seat are those growing at a faster rate — including those in the Mountain West like Utah, Nevada and Idaho. Arizona, Texas and Florida are also outpacing the rest of the country.

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The possibility has so concerned state officials that Alabama Attorney General Steve Marshall and U.S. Rep. Mo Brooks sued the U.S. Census Bureau in an effort to prevent them from counting undocumented immigrants in the census, despite U.S. Supreme Court rulings that have held the opposite.

It’s unlikely that suit will succeed based on precedent, and a federal judge recently blocked a “citizenship question” on the census altogether, making that possibility even lower.

On the other end of the spectrum, Gov. Kay Ivey is publicly encouraging the state to respond to the census in an effort to ensure every person is counted.


Click here for a visualization of the data


But it’s not solely immigration that is buoying the chance of Alabama losing a congressional seat.

From 2010 to 2018, Alabama’s population only increased by 2.3 percent.

That puts Alabama as No. 35 among the 50 states in that metric.

The rate of natural increase — a number that calculates the crude birth rate by subtracting the death rate from the raw birth rate — is worse.

Alabama ranks 43rd in that metric.

Alabama falls into the lowest tier of growth, with growth under 1 percent.

The numbers within those metrics are even starker.

Alabama has the second-highest death rate in the U.S. The only other state with a higher death rate is West Virginia, a state that has been ravaged by the opioid epidemic.

A low rate of international migration levels also contributes to Alabama’s slow growth rate. It had the fourth-lowest rate of international immigration in the country.

Alabama does have a positive rate of domestic in-migration, but that number is still lower than some of its neighbors in the Southeast.

Coastal Southeastern State like North Carolina, South Carolina and Florida — along with Tennessee — are seeing faster growth overall than Alabama, Mississippi, Louisiana and Arkansas.

In the last year, Alabama’s population increased an estimated 0.3 percent.

But it could be worse.

Eight states — Mississippi and Louisiana among them in the Southeast — lost population in 2018, according to the Census estimates.

The Census tracks births and deaths in a state and estimates the number of people moving in and moving out to estimate population change.

Alabama had an estimated 57,216 births in 2018 but an estimated 53,425 deaths. That’s a net natural increase of only 3,791 people. Domestic migration and international migration added up to a net increase of 9,062.

That’s a net population change of only 12,751 people in one year.

“Alabama’s population is older than the average state,” PARCA’s analysis found. “That effects population in two ways. Older residents are more likely to die, and younger people are more likely to have children. In addition, Alabama residents, by many measures are less healthy than residents in other states and have a shorter life expectancy than residents of most other states. Alabama’s high death rate ultimately depresses the state’s rate of natural increase.”

Perhaps the most obvious comparison is with South Carolina, a state that has demographics similar to Alabama’s.

In 2010, when the last national census was held, South Carolina had fewer people than Alabama. But since then, South Carolina had a growth spurt, fueled in large part by domestic migration.

The state has now surpassed Alabama in population, adding 450,000 new residents while Alabama added only 100,000 since 2010.

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Economy

Alabama tax revenues are up but still below pre-Great Recession levels

Brandon Moseley

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Last year was a great year for most state governments, with a few notable exceptions.

In Alabama, tax revenues are soaring, but have not entirely recovered from pre-Great Recession levels.

According to a new study by the Pew Charitable Trust, 36 states collected more tax revenue than they did at their pre-Great Recession peaks, after adjusting for inflation. Alabama’s tax revenues were up markedly in the third quarter of 2018 to the highest levels seen since state government revenues peaked in the third quarter of 2008.

The economy has expanded substantially and that is showing in increased tax collections. Alabama’s state government had peaked to an all-time high in the third quarter of 2008, when Bob Riley was the Governor. Then the stock market tanked, millions of American homeowners found that they were unable to pay their mortgages, banks began to fail, the homebuilding industry crashed, and Presidents George W. Bush and Barack H. Obama intervened in the economy with the TARP bank bailout. Millions of Americans lost their jobs, their homes, their 401ks, and many lives changed forever.

For state governments, people making less money pay less taxes. By the second quarter of 2010, paralleling the national average, Alabama’s total tax collections had dropped 13.2 percent from peak levels and lower than tax collections had been in years. The people of Alabama responded to the economic crisis and corruption scandals in Montgomery by rejecting 136 years of Democratic Party control and giving Mike Hubbard and the Republicans supermajorities in both Houses of the Alabama legislature plus every statewide race on the ballot. Doug Jones’ narrow victory over Judge Roy Moore in the 2017 special election for U.S. Senate is the only time a Democrat has won a statewide race in Alabama since.

Lawmakers in Alabama and state capitals across the country struggled to figure out how to cut budgets, get federal bailout dollars, and/or raise revenues to keep state agencies afloat. Nationally state tax revenues bottomed out in the fourth quarter of 2009 at 12.5 percent below peak levels. Two years later nationally average states had recovered back to just 4.4 percent below the pre-Recession peak of 2008. Alabama, however, was still 11.3 percent below the peak revenues seen in 2008. By the fourth quarter of 2013 nationally state governments were taking in 2.4 percent more than they did during the third quarter of 2008, adjusted for inflation. Alabama, however, was still 7.7 percent below those peak revenues.

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When Governor Robert Bentley (R) resigned amidst scandal during the second quarter of 2017, Alabama tax revenues were still 4.1 percent below the 2008 third 1uarter state peak. The national average was 6.3 percent above the third quarter of 2008. In the third quarter of 2018, Alabama tax collections were only 1.1 percent below the pre-Great Recession peak. The national average, however, is 12.2 percent above the mark set ten years ago.

The ten states with the greatest gains in tax revenues are: 1. North Dakota (47.9 percent above peak) 2. Colorado (32.2 percent above peak), 3. California (27.6 percent above peak), 4. Oregon (26.8 percent above peak), 5. Minnesota (25.5 percent above peak), 6. Hawaii (23.6 percent above peak), 7. Washington (22.8 percent above peak), 8. Nevada (22.5 percent above peak), 9. South Dakota (20.8 percent above peak) and 10. Maryland (18.8 percent above peak).

The ten states most below their third-quarter 2008 collections are: 50. Alaska (-86.3 percent below peak), 49. Wyoming (-38.2 percent below peak), 48. New Mexico (-15.3 percent below peak), 47. Oklahoma (-8.5 percent below peak), 46. Florida (-7.9 percent below peak), 45. Ohio (-7.4 percent below peak), 44. Louisiana (-6.7 percent below peak), 43. West Virginia (-2.8 percent below peak), 42. New Jersey (-2.6 percent below peak), and 41. Arizona (-2.2 percent below peak).

According to the authors, states collectively took in 5.5 percent more tax revenue from July 2017 through June 2018, the budget year used by most states, than they did in the previous year, after adjusting for inflation. It was the greatest increase since tax dollars rose 7.0 percent in fiscal 2011. Just two states bucked the upward trend and took in less in fiscal 2018 than they did a year earlier: Mississippi and Ohio.

To read the report, click here.

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Economy

Ivey awards first broadband accessibility grants

Brandon Moseley

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Alabama Gov. Kay Ivey announced the first ever grants from Alabama’s Broadband Accessibility Fund.

Residents in seven Alabama communities will be afforded access to high-speed internet thanks to the grants, totaling almost $1.1 million. The fund was created by the Alabama Legislature and signed into reality in March 2018 by Gov. Ivey.

“These grants may only represent one step in terms of providing high-speed internet opportunities to rural Alabama, but it is a monumental leap for a program that has the ability to positively impact the lives of so many people,” Gov. Ivey said. “By supplying these services to rural Alabama, we are also providing these areas the ability to step up in education, health care and economic development.”

The Broadband Accessibility Fund provides funds for service providers to supply high-speed internet services in unincorporated areas or communities with 25,000 people or less. Under the law, awards cannot exceed 20 percent of the total cost of a project.

Ivey placed the administrative duties of the Alabama Broadband Accessibility Fund under the Alabama Department of Economic and Community Affairs (ADECA).

“Providing broadband services to Alabama’s rural communities is in many ways the equivalent of providing those same areas with electricity in early 20th Century,” ADECA Director Kenneth Boswell said. “ADECA and Gov. Ivey share the goal of supplying this essential service to every part of Alabama.”

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Grants awarded and coverage areas are:

Millry Telephone Co. Inc. of Millry will receive $938,306 for expanding coverage to incorporated areas of Gilbertown and Toxey and some unincorporated areas in Choctaw County.

Marcus Cable Associates of Birmingham will receive $11,022 to expand coverage in the East Wood Point area in Moulton.

Marcus Cables Associates of Birmingham will receive $11,063 for expanding coverage in the Emerald Ridge area in Chelsea.

Charter Communications will receive $29,567 to expand coverage to Glen Ridge in southwest Tuscaloosa County.

Charter Communications was awarded $6,017 to provide coverage to the Grace Haven subdivision in Boaz.

Charter Communications received $8,415 to provide coverage in the Vickey Lane area in Boaz.

Farmers Telecommunications Cooperative Inc. will get $74,586 for providing broad band coverage in the Pea Ridge community near Henagar.

Governor Ivey added on social media, “I’m proud to announce that almost $1.1 million in grants are being awarded in an effort to increase broadband access in rural Alabama. This is a major step forward for these 7 communities. A gain for rural Alabama is a gain for our entire state.”

State Senator Clay Scofield (R-Guntersville) sponsored the legislation to create the Broadband Accessibility Fund.

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Economy

Red state governors tout economic success of Medicaid expansion

Bill Britt

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Montana’s Gov. Steve Bullock presented a report in early January that shows Medicaid expansion has added $270 million to the state’s economy annually since its passage in 2015, according to The Great Falls Tribune.

“I think that it’s time we finally fully recognize the value of Medicaid expansion is as much for Montana businesses as it is for the Montanans receiving health care,” Bullock said.

Montana’s success — as well as Idaho’s recent decision to expand the health insurance program for low-income individuals — may serve as a model for Alabama.

Alabama is one of 14 mostly southern, conservative states that have not expanded Medicaid under the Affordable Care Act, President Barack Obama’s 2010 health care law.

Alabama Attorney General Steve Marshall was one of several Republican attorneys general who sued to overturn the law in a case that is still pending appeal.

Meanwhile, Alabama has witnessed the closing of six hospitals since 2011, according to the Alabama Hospital Association. They have warned that the closures could get worse as more cuts are anticipated later this year.

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Hospitals that rely on so-called disproportionate share hospitals payments — or DSH  — are barely operating in the black, and it wouldn’t take much to put them in the red.

“If the state has not expanded Medicaid in 2020, as the DSH cuts are scheduled to take effect, that will close a significant number of hospitals,” said Danne Howard, the association’s chief policy officer in December. “That will cripple. That will be the straw that the hospitals can’t survive.”

Louisiana’s expansion of Medicaid in 2016 resulted in a $1.85 billion direct economic impact, according to an April 2018 report. It has also led to the creation of 19,000 new jobs.

Three deep-red states — Idaho, Nebraska, and Utah — joined the 32 expansion states through ballot initiatives in November 2018. Solid majorities in each conservative state voted for the measure. Three other states — Kansas, Wisconsin and Maine — elected Democratic governors who are likely to push expansion.

Should Medicaid expansion be on the 2019 legislative agenda? Experts say it has to be

Recent estimates show that between 235,000 to 300,000 people in Alabama would gain access to Medicaid if the state were to accept federal funding to expand Medicaid. In 2018, the federal government paid 94 percent of the cost of Medicaid expansion. That funding will drop to 90 percent by 2020, but will remain at that level going forward.

A UAB School of Public Health study found that expansion would cost the state about $770 million over the first seven years in costs, but could potentially result in $20 billion in economic growth over the same time period.

In her inaugural speech, Gov. Kay Ivey eluded to tackling health care but didn’t address Medicaid expansion directly.

A look at other issues Ivey touched on in inaugural address

Senate President Pro Tempore Del Marsh, R-Anniston, said in an interview that expansion is unlikely to be on the agenda for the 2019 legislative session.

Former chairman of the State Senate Health Committee Gerald Dial in an Op-ed said that if the state doesn’t expand Medicaid, “More hospitals will close.”

He also pointed out that beyond the six rural hospitals that have already closed, 88 percent of the remaining rural facilities are operating in the red.

“Many have had to eliminate services, cut staff and if nothing changes, a number of them will likely have to close their doors,” Dial said. “And when a community loses its hospital, it also loses doctors, pharmacies, and other providers, devastating the community not only in terms of access to health care but in job and economic losses.”

Opinion | Retiring Republican state senator: Alabama should expand Medicaid

Ivey’s administration is riding high both in her personal approval rating and with the state’s booming economy. The governor seems poised to use her political capital to move the state forward despite political considerations.

Economic gains in Montana and Louisiana could convince a majority of the state’s conservative lawmakers that expansion is a winning proposal. Mississippi, another deeply conservative state, also appears ready to move forward with a version of the expansion.

Republican lawmakers are expected to impose work requirements on social welfare benefits in the coming legislative session. Some say this is a precursor to expanding Medicaid.

 

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Nine stories to keep an eye on in 2019

by Chip Brownlee Read Time: 8 min
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