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Takeaways from 2019 Legislative Session

Brandon Moseley

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The 2019 Alabama regular Legislative Session is over, and a lot happened that could substantially change how Alabama is governed. While hundreds of bills passed, here are the 11 biggest takeaways from the regular session that just ended and the special session.

The state has more money for education. Following the Great Recession payments to the education trust fund in income tax and sales taxes paid plummeted. The state raided the Alabama Trust Fund for emergency money, but once those rainy day funds were exhausted, the Legislature just cut education across the board in 2011, 2012 and 2013. Universities raised tuition. Maintenance on school buildings was postponed. Teachers saw smaller take-home pay. Schools were told to do more for less. The schools survived the austerity measures, but the state was left with being 50th in education according to U.S. News and World Report. Money is flowing into the ETF at a rate we have not seen in a decade. Not only has there been no proration in the last several years, but the Legislature has over $280 million in extra money to spend in supplemental appropriations for education. On Friday, the Legislature approved the largest education budget in history. State support for the four-year colleges is still below 2008 levels, but every college is getting a boost in the 2020 budget. There is more money for teachers, books, buses, pre-K classrooms, and maintenance, and it is hoped that the new funds will help the state get off the bottom nationally in education.

The Legislature voted for Board of Paroles and Pardons reform. The Legislature voted to replace the old board with a new board, and the governor will have far more control over the agency than previous governors have had. There were too many cases of murderers being released too early. Add to that some very high-profile murders by parolees with very long, violent records and a parole board that seemed oblivious to public safety concerns.

Alabama’s crumbling infrastructure is going to get improved. Roads and bridges have never been a high priority for the Alabama legislature, but that is expected to change in coming years. While the prospects of the federal government doing a major infrastructure improvement package seems increasingly unlikely, the Legislature voted to raise gas taxes by 10 cents a gallon over the next three years. The Legislature also passed bills allowing future road projects to be built by private companies and paid for with tolls. The enormously expensive I-10 bridge connecting Mobile and Baldwin Counties is going to be paid for by electronic tolls that record every vehicle that passes by and then bills the motorist as a user fee. It will cost more to drive around the state, but there will be funds to repair the roads and bridges moving forward.

The state is making a major move toward improving broadband. There are 800,000 people in the state that do not have access to high-speed internet. The state Legislature passed two bills and put up $20 million in state grant money to try to cut that number substantially. The grant program is administered by the Alabama Department of Economic and Community Affairs. HB90 expanded the grant program for broadband providers in rural and under-served areas. HB400 allowed electric operators to operate and install broadband on their existing easements either directly or through affiliates.

The state has a growing teacher shortage. Austerity packages in the aftermath of the Great Recession meant that teacher pay froze for almost a decade and a number of school systems did not replace retiring teachers. That combined with ongoing population decline in many Alabama counties have sent the message to young people that teaching is not a lucrative profession to be in. Now, many of those teachers are being lured into the private sector for greater opportunities. Between that and retirements many school systems can’t find qualified people to hire to fill all the vacancies. The state Legislature responded to that by giving education employees and across the board 4 percent pay raise and enough funding that there should not be an increase in insurance premiums.

The Legislature also increased pupil supply money. Legislators hope that leads to greater teacher retention and the recruitment of more young teachers. The Legislature also gave superintendents more flexibility in staffing by greatly increasing the length that a teacher can teach on an emergency certificate. The Legislature also passed legislation allowing school boards and sheriffs to hire retired law enforcement officers to work as school resource officers and school security. This is to address the number of schools that still don’t have an armed security presence.

Alabama was voted an anti-abortion rights state when voters passed amendment two last November, which would outlaw abortion if Roe v. Wade is overturned. The Legislature passed HB314 to try to hurry that along by defying the federal courts and declaring abortion illegal. There is an exception to protect the health of the mother, but no exception for rape and incest. This statute has already drawn a federal lawsuit by Planned Parenthood and the ACLU, but going to federal court in hopes that this leads to Roe v. Wade being overturned was a stated goal of the sponsors.

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Corrections officers are getting a pay raise. The federal courts have told the state that it must do something about the chronically overcrowded and understaffed prisons, which a U.S. Department of Justice report called the most dangerous prison system in America. A corrections officer has been murdered. Inmates have murdered inmates. Inmates have been raped by inmates. The court has ordered the state to do something about the lack of enough corrections officers. The Legislature responded by passing $40 million in additional funding to hire 500 more corrections officers and raise the pay across the system in order to improve officer retention.

The voters get to decide if they want to keep the elected State Board of Education. The Legislature approved a constitutional amendment to allow voters to decide if they want to replace the board with an appointed commission and repeal the Common Core Standards. The state’s public schools are mired at the bottom in reading, math and science performance, and the Legislature is ready for a course change. They think that the governor can do a better job picking than partisan elections have done and believe that the voters will agree.

There is going to be a major move to do something about the aging prisons. Prisons are understaffed, overcrowded, violent, hot, deteriorating. Well, that bill is coming due. Alabama’s 27 prisons, detention facilities and holding camps are getting to be 50, 60 and 70 years old, and Gov. Kay Ivey is has said she is determined to do something about replacing most of them, either with the Legislature’s help in a special session this fall or through executive action. Either way, the taxpayers are going to have to pay for it, and that means more for prisons coming out of the state general fund moving forward.

Third grade just got to be more important. The House passed legislation requiring that every child, outside of those in special education, have to read at a third-grade level or they will not be able to move on to fourth grade. Studies show that students who don’t read at grade level by the fourth grade don’t have good educational outcomes. The NAEP uses fourth and eighth grade for the assessments that measure states and ranks them by performance on the standardized tests. Students held back will get extra help from reading coaches to try to catch up and master literacy.

Medicaid Expansion seems unlikely in the foreseeable future. The rural hospitals and the Democrats made a major push to expand Medicaid, and it went nowhere. The state’s archaic budgeting system makes finding new money in the state general fund enormously difficult, and transferring funds from education to the general fund is almost impossible. The prisons were underfunded during the recession to keep Medicaid benefits flowing to poor children, poor pregnant women, poor seniors and disabled people. With the federal government forcing the state to deal with prisons and the cost of funding the Children’s Health Insurance Program, which was passed back to the state, there is no money in the state general fund to pay for Medicaid expansion. The lottery was not enough to improve that situation significantly, but even that modest effort to increase state general fund revenues failed in this session.

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New unemployment claims held steady in June, state says

Micah Danney

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The number of Alabamians filing for unemployment insurance held more or less steady over the course of June, with 18,340 new claims added during the last week of the month, according to the Alabama Department of Labor.

There were 19,950 new claims in the first week of June and 18,367 in the second week, then a slight jump to 18,671 in the third week. 

The month’s total of 75,328 new claims comes after Gov. Kay Ivey relaxed some restrictions meant to slow the spread of COVID-19 and allowed more businesses to open. The numbers vary by industry and county, but generally represent some stabilization, according to department spokesperson Tara Hutchison.

“They remain significantly down from a high in excess of 100,000 in April, which is good news. I don’t know if we can really expect anything one way or another in this unprecedented situation, but the decline from early in the pandemic is of course welcome news,” Hutchison said.

About 60 percent of last week’s new claims were attributed to COVID-19. 

The state’s unemployment rate dropped from 13.8 percent in April to 9.9 percent in May. That compares to a rate of 3 percent in May 2019.

Jefferson County had the highest share of new claims last week at 2,626, followed by Mobile and Montgomery counties at 1,900 and 1,400, respectively.

The worst-hit industries that are categorized were administrative and support services, food service and bars, transportation equipment manufacturing, general merchandise stores, nursing and residential care facilities and educational services. 

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As of May, counties with the lowest unemployment rates are Clay County at 5.6 percent, Geneva County at 6.3 percent and Shelby County at 6.5 percent. 

Counties with the highest unemployment rates are Wilcox County at 19.3 percent, Lowndes County at 18.3 percent and Greene County at 16.4 percent.

Major cities with the lowest unemployment rates are Vestavia Hills at 5.2 percent, Homewood at 5.4 percent and Madison at 6.2 percent.  

Major cities with the highest unemployment rates are Prichard at 18.6 percent, Selma at 17.1 percent and Gadsden at 15.7 percent.

Wage and salary employment increased in May by 42,500, according to the department.

Average weekly earnings increased to a record high in May, rising to $905.25 per week, representing an increase of $66.43 over the year.

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Secretaries of State share joint statement on importance of USMCA launch

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Following the completion of the necessary measures to comply with commitments under the United States-Mexico-Canada Agreement (USMCA), the Agreement officially enters into force today, July 1, 2020.

As Secretaries of State who oversee the business filings process in the respective states of Alabama, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Ohio, Texas, and Wyoming, Secretaries John H. Merrill (Alabama), Paul D. Pate (Iowa), Michael G. Adams (Kentucky), Kyle Ardoin (Louisiana), Michael Watson (Mississippi), John R. Ashcroft (Missouri), Bob Evnen (Nebraska), Frank LaRose (Ohio), Ruth Hughs (Texas), and Edward A. Buchanan (Wyoming) recognize and appreciate firsthand the positive impact the USMCA will have on entrepreneurs across the country.

“Alabama’s international engagement fuels job growth and increases exports. The success of Alabama businesses depends on the participation and competitiveness of our global counterparts. Alabama totaled $6.6 billion in exports to Canada and Mexico in 2018, supporting families and businesses across the state” noted Alabama Secretary of State John H. Merrill. “I was delighted to join President Donald J. Trump in January of this year as he signed this mutually beneficial agreement, and I look forward to its future success.”

“The USMCA is a great opportunity for Iowa’s farmers, businesses and families. The launch of this agreement comes at a vital time for our country and will provide a much needed boost to our economy. Canada and Mexico bought $6.5 billion worth of goods from Iowa in 2018 and this deal ensures our partnerships with these neighbors will continue,” stated Iowa Secretary of State Paul Pate.

“The USMCA entering into force is a great deal and a win for American and Louisiana workers. The USMCA will help support and grow our economy, boost small businesses, help our farmers, manufacturers, and workers, and ensure more Louisiana-made products can be sent internationally. Trade is important to Louisiana’s economy and this deal will help boost both,” stated Louisiana Secretary of State Kyle Ardoin.

“During a time when the future of our economy seems nebulous, the USCMA creates a portal for modern opportunities and prosperous partnerships,” said Mississippi Secretary of State Michael Watson. “The enhanced agreement will undoubtedly revive businesses and help boost innovation in our state. I applaud President Trump’s leadership and dedication to ensuring a fair playing field for Mississippi farmers, ranchers, and entrepreneurs.”

“Missouri is grateful for this historic agreement, which will help Missouri agriculture and businesses grow with more jobs and increasing exports.  As our economy recovers, getting businesses and people back to work, this will help ensure success for large and small businesses who compete and form partnerships with our neighbors.  We stand ready to assist our entrepreneurs and businesses,” replied Missouri Secretary of State John R. Ashcroft.

Nebraska Secretary of State Bob Evnen noted, “The USMCA provides expanded opportunities for Nebraska’s livestock industry, and our ag commodity and specialty crop producers. The USMCA builds on the successes and corrects the problems of NAFTA, and gives us expanded opportunities for Nebraska’s ag trade with our friends in Mexico and Canada. This excellent agreement now serves as a template for other international free trade agreements, so we have cause for optimism on many fronts.”

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“Today is a day Ohio’s farmers and entrepreneurs have been waiting for,” said Ohio Secretary of State Frank LaRose. “As our nation’s economy continues to recover, the USMCA is a much needed boost as they compete on the global stage. Thanks to the leadership of President Trump, Senator Portman and bipartisan leaders from across our nation, Ohio is poised for our next giant leap, and my office looks forward to helping make it happen.”

“Last year alone, trade between Texas and its two largest trade partners—Mexico and Canada—totaled more than $200 billion. This exchange supports the more than 950,000 Texas jobs that are tied directly to trade with Mexico and Canada,” said Texas Secretary of State Ruth Hughs. “The implementation of the USMCA provides tremendous benefit to all parties involved in the trade deal and will help to ensure years of mutual economic benefit and prosperity for all. We look forward to further strengthening our relationship with our trade partners as we enter a new era of innovation and success.”

“The USMCA trade deal has high standards and rebalances North American trade to provide a stronger market for Wyoming’s and our Nation’s goods. This is a great day for our country, as businesses will better be able to participate in cross-border trade. USMCA ensures fair business practices by our neighbors and now the advantage will be back in the hands of the American worker,” stated Wyoming Secretary of State Edward Buchanan.

This historic trade agreement will result in freer markets, fairer trade, and strong economic growth across North America, creating new opportunities for American workers, farmers, ranchers, and business owners.

 

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Ivey announces SiO2’s $163 million expansion in Auburn

Brandon Moseley

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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.”

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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.

 

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ADOL announces extended benefits program to begin

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The Alabama Department of Labor announced today that the state will begin offering Extended Benefits (EB) for those who qualify and have exhausted previous benefits.

This is a separate program from the Pandemic Emergency Unemployment Compensation (PEUC) program that was enacted under the CARES Act.

The EB program is a federal program that is triggered when a state’s insured unemployment rate exceeds 5.9 percent. Alabama’s weekly insured unemployment rate* of 6.11 percent triggered the state onto a 13-week EB period beginning the week of May 31. It is usually available during times of adverse economic conditions. The last time Alabama offered the EB program was during the Great Recession of 2008.

While EB is available for UP TO 13 weeks, not all claimants will be eligible to receive all weeks.  Alabamians can begin claiming these benefits on July 5, 2020.

Claimants must first exhaust all regular UC and PEUC benefits before they will be eligible for EB benefits.  Claimants must not be eligible for unemployment compensation benefits in another state or Canada, must have no disqualifications, have qualifying wages, and must have at least one week in the benefit year that begins in an EB eligibility period. Specific eligibility criteria can be found at: https://wdr.doleta.gov/directives/attach/UIPL/UIPL_24-20.pdf.

Individuals are only entitled to benefits if they are no longer working through no fault of their own and they MUST be able and available for work.  The EB program has more stringent work search requirements and requires claimants to engage in a “systematic and sustained” effort to obtain work during each week and to provide evidence of efforts.  Due to the pandemic, the submission of required work search contacts has been TEMPORARILY waived due to Covid-19 restrictions. However, claimants should continue to look for work where possible, and maintain a record of their efforts on a weekly basis.  This waiver may end at any time.  Once this waiver ends, claimants will be required to provide a minimum of three (3) work search contacts each week during the weekly certification process. 

ADOL will notify those eligible for EB benefits via the UI Claims Tracker and by mail. Claimants will not have to apply for these benefits, but should continue to file weekly certifications.

 

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