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House passes general fund budget, 2 percent state employee pay increase

Brandon Moseley

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The Alabama House of Representatives passed the state general fund budget, HB152, on Tuesday. HB152 is sponsored by House Ways and Means Chairman Steve Clouse, R-Ozark. HB152 passed 103 to 0.

The House also passed HB166, sponsored by the late Rep. Dimitri Polizos, R-Montgomery, to give state employees a 2 percent cost of living allowance. There was no bonus for retired employees.

State Rep. Kelvin Lawrence, D-Hayneville, handled HB166 on the House floor after Polizos unexpectedly passed away from a heart attack.

Lawrence said the pay raise bill has a fiscal note of $40 million. HB166 passed 103 to 0. Chairman Clouse said the budget is “a process. It is like putting a big puzzle together.”

The state has one budget for the state general fund and a second budget for education, the education trust fund. The state also has billions of dollars in off the budget funding from other sources and billions in federal matching dollars.

The 2020 fiscal year SGF budget that passed the House funds the SGF $2,145,825,797. The FY 2019 SGF was $2,054.901,265 and the 2018 SGF was just over $1.9 billion.

The Alabama Department of Corrections will receive $517,053,750 in the 2020 general fund budget. The budget includes additional money to offer more money for prison guards in order to recruit and retain more guards. ADOC hopes to hire an additional 500 guards. The federal government has recently cited the state for its chronically underfunded and understaffed prisons.

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The Alabama Department of Mental Health received $127,929,306 in the SGF.

The Alabama Medicaid Agency was budgeted $703,419,531, a substantial decrease from 2019 due to the improving economy and some one time money from a tobacco settlement.

Rep. Kerry Rich said there are not enough beds for the mentally ill.

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“We are not going to pass any new taxes,” Rich said. “If we are going to fix it, it is with a lottery. That will bring in $100 million, maybe $150 million. If we did a compact with the Poarch Creek Indians that would bring in $850 million a year.”

Clouse said he is proposing carrying over $105 million from the 2020 fiscal year budget to the 2021 fiscal year budget because he anticipates that the state will have to increase its funding of the Children Health Insurance Program by over $70 million and will need more funding for Medicaid.

“We know that we are going to have to come up with at least $110 million more next year for CHIP and Medicaid,” Clouse said.

“Down the road there is a dinosaur waiting to eat us up,” said State Rep. John Rogers, D-Birmingham. “We got to bite the bullet to put the money in the general fund to help the people of Alabama.”

State Representative Artis “A.J.”McCampbell, D-Livingston, said the state has been given 60 days to present a plan to address the federal government’s concerns about Alabama’s prison system.

“We are now considered to have the most violent prison system in the country,” said State Rep. Christopher John England, D-Tuscaloosa.

“Mega prisons are absolutely not the way to go,” England said. “If the current leadership remains in place they are going to be as dangerous and as poorly run as they are now. The same person who has been in charge the last four years should not be given a billion dollars to spend on new prisons.”

England warned the Ivey administration will get us tied into a private prison lease agreement that we will never be able to get out of.

“We don’t know what the governor is going to ask to build the new prisons,” said State Rep. Napoleon Bracy, D-Prichard. “We have got to get some revenue from somewhere.”

Rogers said there is not enough money in an Alabama lottery. He suggested legalizing sports betting and possibly raising property taxes in order to better fund prisons and expand Medicaid.

Clouse said expanding Medicaid would cost the state general fund budget $168 million a year.

“When there are 200 prisoners to one guard, who is really running the prisons? The prisoners are,” Rogers said. “You can’t give a man enough money to risk his life.”

Reporters asked Clouse how many new prison guards will be hired and how much the pay will be raised for guards.

“The goal is to hire the 500,” Clouse said. “The goal is a 20 percent pay raise.”

“What is the cost of building three new prisons?” Clouse said. “We are waiting to see if that is feasible and if that is the way the governor wants to go.”

“The governor has been very communicative with the legislative leadership to try to find an answer on this,” Clouse said. “We have got to see what the cost is. There are a lot of concerns about the cost of lease deal.”

Clouse said the increase for ADOC this year will be to “try to secure more staff, security and hiring more mental health professionals.”

“It has been very difficult to find employees in this environment,” he said.

Clouse also said Medicaid will need $40 million more next year, 2021, and the CHIP will need $70 million more, and that is before any additional needs from Corrections or Mental Health.

Clouse told reporters he was happy to be able to offer a pay increase to state employees.

“That was certainly not on our radar four or five months ago, plus we were able to keep insurance rates from going up,” Clouse said.

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Economy

New unemployment claims continue to drop

Micah Danney

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(STOCK PHOTO)

There were 11,692 unemployment claims filed in Alabama last week, down from 17,439 the previous week, according to the Alabama Department of Labor.

Seventy-six percent of the claims from July 26 to Aug. 1 were related to COVID-19, according to the Alabama Department of Labor. That compares to 89 percent the week before.

New claims increased over the first half of July but declined in the second half.

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Economy

Alabama Power is returning $100 million to customers

Brandon Moseley

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The Alabama Public Service Commission approved a plan Tuesday to credit Alabama Power Company customers on their October bills. The move returns approximately $100 million to Alabama Power Company customers.

“Putting money back into the pockets of hard-working Alabamians is one of the ways we can help on the road to recovery,” Public Service Commission President Twinkle Andress Cavanaugh said on social media. “Alabama Power to refund $100 million to customers.”

The typical Alabama Power customer will receive a $25 credit on their October bill. The newly approved credit is on top of a 3 percent rate reduction that customers are already enjoying in 2020. This previous rate cuts and the October credit amount to about $300 million in savings for Alabama Power customers this year.

“We appreciate the commission voting today to expedite this credit for our customers,” said Richard Hutto, Alabama Power’s vice president of regulatory affairs.

The global economic collapse due to the COVID-19 pandemic has hurt people across Alabama. It has also dramatically lowered fuel costs for Alabama Power Company’s plants.

A typical residential customer using 1,000 kilowatt-hours of electricity per month is expected to receive a credit of $25. Customers who use more energy will receive a larger credit. Customers who use less power receive a smaller credit but had a smaller bill to begin with. Adjustments to fuel costs are typically calculated at the end of the year, with savings passed to customers beginning in January, but due to the economic downturn and pandemic-related job losses, Alabama Power and the PSC are rushing that money to Alabama families and businesses.

“Many of our customers have been hurt by COVID-19. We hope this credit will provide some additional relief at this difficult time,” Hutto explained.

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The 3 percent rate reduction, that took effect in January, was based on earlier estimates of lower costs for fuel and other expenses for 2020. The rate reduction alone equates to about a $4.50-per-month reduction for the typical residential customer.

“Our employees are working every day to keep costs low while providing industry-leading reliability for our customers,” Hutto added.

Alabama Power said in a statement that their total retail price is below the national average and has been for decades. When adjusted for inflation, the price customers pay for electricity is lower today than it was 30 years ago.

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Alabama Power has been assisting customers in other ways during the COVID-19 outbreak. Since the start of the pandemic, the company has suspended disconnects and late payment fees for customers hurt by the coronavirus.

Cavanaugh is seeking another term as president of the Commission.

“It is crucial that we have strong pro-jobs conservatives supporting President Trump’s agenda at all levels of government,” Cavanaugh said on social media.

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Economy

Payroll Protection Program deadline has been extended to Saturday

Brandon Moseley

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Congresswoman Martha Roby, R-Montgomery, this week reminded business owners that the deadline to apply for the Payroll Protection Program, knowns as the PPP, has been extended to Saturday.

“The Small Business Administration’s Paycheck Protection Program (PPP) application deadline was recently extended to Saturday, August 8,” Roby wrote in an email to constituents. “Do not forget to fill out your application if you are a small business that has been impacted by the Coronavirus pandemic.“

The PPP was a loan program administered by the Small Business Administration. It was part of the bipartisan CARES Act to address the economic collapse caused by the COVID-19 global pandemic and the forced economic shutdowns, which were implemented in the early months of the public health emergency in an attempt to slow the spread of the novel strain of the coronavirus and allow public health agencies and health care systems time to build up testing, contact-tracing and hospital bed capacity.

The PPP loans are 1 percent interest loans available through the SBA. If the business uses the money to make payroll and pay standard operating expenses then the loans will be forgiven. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers.

The PPP has been very popular, so much so that that program ran out of money just weeks after Congress passed it. Congress had to go back and provide more funding for the PPP.

Businesses can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

Senate Democrats are meeting with the Trump Administration, Senate Republicans and House leadership on a compromise plan for a fifth coronavirus relief package. A big point of contention has been the size of the total package. Speaker of the House Nancy Pelosi, D-California, supports a $3.2 trillion coronavirus relief bill while Republicans prefer a more modest $1 trillion relief bill. The two sides are expected to continue to negotiate through Friday in an attempt to reach a compromise before the August recess.

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Roby is serving in her fifth term representing Alabama’s 2nd congressional district. She is not seeking re-election.

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Economy

State’s unemployment claims slowed last week

Last week saw the lowest number of new claims since the week-to-week number first spiked from 1,824 to 10,982 when the lockdown started in mid-March.

Micah Danney

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The number of unemployment claims in Alabama slipped last week after increasing through the first half of July.

There were 17,439 claims filed from July 19 to 25, according to the Alabama Department of Labor. Of those, 15,461, or 89 percent, were COVID-19 related.

Claims soared at the start of the pandemic in late March, hitting a weekly high of 106,739 in the first week of April. The rate of new claims declined sharply in May, with each week counting under 30,000 claims.

Since then, the number has decreased somewhat steadily. Claims rose several thousand over the course of this month, from 19,058 in the week ending July 4 to 23,678 in the week ending July 18.

Last week saw the lowest number of new claims since the week-to-week number first spiked from 1,824 to 10,982 when the lockdown started in mid-March.

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