Wednesday, state Finance Director Kelly Butler briefed the Alabama Capital Press Corps on the state budgets. The economy has been doing really well and this means that Gov. Kay Ivey is anticipating substantially larger state revenues in the coming fiscal year.
The legislature passes two budgets each year. One is for schools, the Education Trust Fund budget (ETF). The other is the state general fund budget (SGF), which deals with non-education matters like prisons, courts, Medicaid, the legislature, state troopers, mental health, department of agriculture, etc. Almost all state revenues are earmarked to specific uses. The state income tax all goes to the ETF. Taxes on insurance and most use taxes are the largest contributors to the SGF.
Governor Ivey is anticipating $7,125,895,252 in the education budget for fiscal year 2020 which begins on October 1. That is a 7.41 percent increase from 2019. The Governor is anticipating $2,146,075,797 for the general fund in FY 2020. That is a 4.44 percent increase from 2019.
“It is like a household budget,” Butler said. “A budget is what your priorities are. In most cases, priorities are more than available revenue. State government is no different.”
Butler said that even though there is more money than previously in the general fund there are still needs that have to be addressed because “The general fund has been either level-funded or cut for many years.”
Butler said that they, “Wanted to adhere to addressing some of the built-up needs in the general fund keeping an eye on budget needs on 2021.”
Butler said that the governor has proposed an increase for institutions of higher education of between 5.5 and 6 percent.
Butler said that the Governor is proposing hiring 50 additional state troopers for ALEA. It costs about $100,000 to pay a trooper, provide him with a vehicle and equipment. That is a $5.7 million budget item.
Butler said that new federal rule requirements in 2022 in order to continue to get federal matching dollars means that this budget is appropriating an $8 million increase for the Alabama Department of Mental Health to go toward those rule requirements.
Butler said that the governor’s budget will carry over $105 million to the 2021 budget because the state is having to pick up more costs for the Children’s Health Insurance Program (CHIP).
During the Barack H. Obama (D) administration, the federal government picked up all of the costs for the CHIP program; but when CHIP was reauthorized last year CHIP reverted to an 80:20 split between the federal government and state government.
Butler said, “Congress passed the cost of the CHIP program back on to the state. This is the first year that the state has had to assume the first part of that cost (8.5 percent) but that increases to 20 percent in 2021. “That is the reason that the governor is proposing not spending all of the money and holding over $105 million.”
The Alabama Political Reporter asked: there is discussion that it is the plan of the governor to transfer all of that cost from the state general fund to the education trust fund?
Butler said that $35 million of the CHIP cost will be paid by the department of education.
APR asked: The amendment setting the state income tax earmarked all of that money for education. How do you justify that transfer under the state constitution?
“We believe that healthy children learn better,” Butler responded. Education pays for the school nutrition program and lunchroom inspections. This is similar.
The governor’s budget includes $30 million is pay adjustment for and additional corrections officers. Ivey is asking for funding for 500 more corrections officers.
“There is a great demand for ESLs (English as a Second Language instructor),” Butler said. “State funding has not kept up with the demand.”
Butler said that there is a general fund increase for the Alabama Department of Environmental Management. It had been zeroed out except for the CAFO (Confined Animal Feeding Operations) costs. ADEM has increased fees three times to make up the difference and we don’t think they can do that again.
Butler said that Forensics is getting a $1.9 million increase because they have a backlog. Hopefully, that will decrease the court backlog.
Butler said that the Governor is asking for 193 new pre-K classrooms. That will serve 3480 new students and increase the program to 40 percent of eligible children.
Butler said that while the general fund might have an increase of 4.4 percent in funding; Medicaid and Correction (the largest two items in the general fund) might be growing at 8 and 9 percent. Butler said that the federal court case against the prisons are something they are watching; because the state will have to pay for what the court mandates.
APR asked: The State Auditors budget was slashed over 25 percent by the Bentley administration, your budget only restores 1.29 percent is that really sufficient for that agency, which is a constitutional office?
“We believe that they are funded at a level that allows them to conduct their mandated functions,” Butler said. We have provided them some additional funds for the bar codes.
The governor is proposing a 2 percent pay increase for state employees and a 4 percent pay raise for education employees.
APR asked: I noticed that the bonus for retirees has been zeroed out in this budget.
Butler said that they got a bonus last year and another bonus before that. They decision was made not to give a bonus to retirees this year.
APR asked how much money does the state have that is not included in these two budgets.
Butler said that the state has $3 or $4 billion in revenue outside of the budget. Between $500 and $600 million of that is gas tax revenues for roads and bridges; before the gas tax increase that was just passed. Additionally, the state collects $8 to $9 billion in federal funds. Total state spending is between $23 and $24 billion.
APR asked: Some conservative gas tax opponents have said that they are planning on bring a lawsuit challenging the $11 million a year earmark for Port of Mobile improvements. If they bring that suit and ultimately prevailed; does the Governor have a plan for that contingency that still funds the port dredging?
“The short answer is no,” Butler answered.
The gas tax increase goes into effect on October 1. When fully implemented, it is projected to bring in an additional $360 million a year.
Kelly said that although the governor’s office has worked collaboratively with the legislature, he expects that they will make changes to the budgets.
Lawsuit claims governor ignored nomination process to appoint probate judge
A lawsuit filed Wednesday is challenging Gov. Kay Ivey’s appointment of Birmingham attorney James “Jim” Naftel II as Jefferson County probate judge place 1.
The suit, filed the day Ivey announced the appointment, alleges she circumvented the Jefferson County Judicial Commission’s nominating process. She should have selected an appointee from a list of three nominees provided by the commission as the state’s Constitution requires, the suit says.
“Because Judge Naftel was not lawfully or properly appointed as Probate Judge of Jefferson County, he is currently usurping, intruding, and unlawfully holding that office,” the suit alleges.
Ivey’s office said she disagrees with the suit’s interpretation of the law.
“The state constitution gives the governor the authority to fill this vacancy,” said Gina Maiola, Ivey’s press secretary. “Judge Naftel is highly qualified to serve as probate judge, and the governor looks forward to his many years of excellent public service to the people of Jefferson County and the state as a whole.”
Barry Ragsdale, an attorney with the firm Sirote & Permutt, P.C., said that he has no issue with who Ivey chose, only how she did it.
“I frankly have nothing but respect for Judge Naftel,” Ragsdale said. “I think he’ll make a great probate judge. I think he’s going to end up being the probate judge, but it’s about protecting a process that we’ve had in Jefferson County for 70 years.”
Jefferson County was the first of six counties to create such a commission. It originally applied only to Jefferson County Circuit Court, but that was expanded in 1973 to include any judicial office, the suit says — including probate judges.
Ragsdale said it is important because the process is meant to provide local input into whom potential judges are. Commissioners are local citizens who likely know the people they nominate, whereas a governor probably doesn’t.
“That takes most of the politics out of it,” Ragsdale said. He noted that before the first commission was created in 1950, George Wallace appointed his relatives to the bench when vacancies opened. A local screening process prevents that, Ragsdale said.
“We have that, we fought for it, and we fought governors for decades to follow the process,” he said.
Ragsdale believes this is a case of a governor simply wanting to exercise power, he said.
“She’s absolutely wrong about what the law says, and we intend to prove that,” Ragsdale said.
Ivey announces SiO2’s $163 million expansion in Auburn
Alabama Gov. Kay Ivey announced Wednesday that SiO2 Materials Science plans to invest $163 million in an expansion at its Auburn facility.
The announcement came just after securing a major contract to supply the federal government with vials to support the COVID-19 vaccine effort if and when an effective vaccine is developed. The project will create 220 jobs.
“It is exciting to know that SiO2 will be directly involved in providing a product essential to addressing the COVID-19 crisis, which will impact not only Alabamians but the entire country,” Ivey said. “This is a testament to the ingenuity of this great company and its growing Alabama workforce.”
Economic developer Nicole Jones told the Alabama Political Reporter, “Vials produced by SiO2 Materials Science may be the critical component needed to ensure safety in the vaccine distribution process. The breakthrough technology developed by the Auburn-based company provides a glimmer of hope amidst challenging times and showcases how Alabamians are working diligently to craft solutions that will assist our nation and the world in the fight against COVID-19. In addition, the 220 new, high-skilled jobs housed in Auburn Technology Park West will bring economic benefits to Lee County as well as the entire state of Alabama.”
The expansion will allow SiO2 to increase its production capacity so that it can meet the expected demand for vials and syringes when a coronavirus vaccine is finally approved for mass use.
In June, SiO2 announced an $143 million contract with federal government agencies for a production scale-up of the company’s state-of-the-art packaging platform for storing novel coronavirus (SARS-CoV-2) vaccines and therapeutics.
Bobby Abrams is the CEO of SiO2.
“The pandemic presents an enormous challenge for all people,” Abrams said. “We are extremely grateful for Senator Shelby’s steadfast support and assistance, and we’re honored to collaborate with our government so a COVID-19 vaccine can be safely and quickly distributed. The State of Alabama and the City of Auburn for many years have been very supportive of SiO2 Materials Science during its research, development, commercialization, and now scale-up phases of the company.”
Over the last 10 years, SiO2 has developed its patented vial platform, which combines a plastic container with a microscopic, pure glass coating on the inside that is ideal for biological drugs and vaccines. The product, developed in Auburn with help from experts from four major U.S. research institutions, combines the benefits of both glass and plastic without drawbacks.
“There are problems with plastic, and there are problems with glass, and we resolve all of them,” Abrams said.
SiO2 will expand its existing facility at 2250 Riley Street and will invest in a new molding facility at 2425 Innovation Drive, both located in the Auburn Technology Park West.
Construction is already under way to expand the facility on Innovation Drive. The completed approximately 70,000-square-foot facility will increase the production capacity of SiO2’s injection molding operation.
“We’re proud to have some of the world’s leading scientists and product developers working in our community,” Auburn Mayor Ron Anders said. “With the presence of these companies and Auburn University’s outstanding medical and engineering programs, we believe we’ll see significant growth in the biotech industry right here in Auburn. On top of that, the well-paying jobs created through this project will result in significant economic opportunities for our local businesses.”
Greg Canfield, the secretary of the Alabama Department of Commerce, said that SiO2’s expansion project in Auburn will help ensure that the nation’s health authorities have an ample supply of vials and syringes to administer a vaccine for COVID-19 as soon as it is developed.
“Having a steady supply of SiO2’s innovative vials will represent a key strategic advantage for federal agencies wanting to act rapidly once a vaccine is available to counter the coronavirus,” Canfield said.
Robert S. Langer is a professor at the David H. Koch Institute at MIT and a company adviser.
A key element of SiO2’s product is enhanced safety for healthcare providers and for patients, who are at a lower risk of adverse side effects. A combination of plastic and a microscopic layer of glass also means vials and syringes won’t break, shatter or crack. SiO2 ships its products worldwide.
“Many drug development and drug formulation innovations can be limited due to variables associated with traditional glass vials and syringes,” Langer said. “The SiO2 vials and syringes eliminate these variables and allow drug development partners to bring their innovations to life.”
SiO2 is a privately-owned company based in Auburn, where it has around 200 employees. The Retirement Systems of Alabama provided early financial support for the company.
517,464 people have already died from the COVID-19 global pandemic, including 130,602 Americans.
Governor appoints Barbara Cooper as secretary of Department of Early Childhood Education
Gov. Kay Ivey on Wednesday announced the appointment of Barbara Cooper as secretary of the Alabama Department of Early Childhood Education.
“Dr. Barbara Cooper has spent her professional career dedicated to helping students achieve their greatest potential. She and I share the same goal, and that is to make Alabama a better place, which begins with our youngest citizens,” Ivey said. “With her vast experience in various administrative positions, Dr. Cooper is more than qualified, and I have no doubt that she will continue the impressive work of the Department of Early Childhood Education. I am confident that Alabama will continue leading the nation with the best early childhood education system.”
Cooper has over 30 years of education experience and most recently served in DECE since 2018. She previously served as the department’s director of the Office of School Readiness and the Birth to Grade 12 advisor for the Alabama Governor’s Office of Education and Workforce Transformation.
She was appointed by the Alabama State Board of Education to serve as the chief administrative officer during the Montgomery Public Schools Intervention where she worked to improve leadership and governance.
Cooper is currently in the process of earning a certificate in Early Education Leadership from Harvard University Graduate School of Education.
She also received a Ph.D. in Education Leadership and Innovation and a Master of Science in Administration, Supervision & Curriculum Development from the University of Colorado at Denver and a Bachelor of Science in Education from Western Illinois University.
“Education is the greatest profession and the work we do in our calling as educators will last beyond our lifetime,” Cooper said. “I look forward to serving Alabama’s children and families for many years to come. I appreciate Governor Ivey’s confidence in selecting me to serve in this new capacity and I look forward to hitting the ground running.”
Cooper’s administrative experience is vast as she has served as Deputy State Superintendent/Chief Academic Officer of the Alabama State Department of Education, Deputy Superintendent of Huntsville City Schools, Chief Equity and Engagement Officer of Aurora Public Schools (Colorado) and a Principal with Denver Public Schools. She has teaching experience ranging from elementary to teacher instruction.
The governor’s appointment is effective immediately.
Governor appoints Jim Naftel as Jefferson County probate judge
Gov. Kay Ivey on Wednesday appointed Birmingham attorney James “Jim” Naftel II as Jefferson County probate judge place 1.
Ivey spoke to Naftel Wednesday afternoon to inform him of her decision, according to a press release from Ivey’s office.
“As one of my appointees, you will be making important decisions that directly affect the citizens of Alabama. I have made honesty and integrity a priority in my Administration, and I know that you will embody these two virtues while serving the people of Alabama,” Ivey wrote in a letter to Naftel on Wednesday.
Naftel will replace Jefferson County Probate Judge Alan King, who was first elected to the judgeship in November 2000, and who retired in May after 19 years of service. King’s wife was killed just more than a year before his retirement in a hit-and-run in Denver.
Naftel has been an attorney with the law firm Maynard, Cooper & Gale, P.C. since 1998, and is a 1998 graduate of the University of Alabama School of Law.