By Neisha Roberts
The Alabama Baptist
Like a family that lives paycheck-to-paycheck, so the state of Alabama had to adjust its General Fund budget to avoid a $200 million shortfall for the fiscal year 2016 that begins Oct. 1 — and the potential government shutdown that would have ensued.
Thankfully legislators came to an agreement Sept. 16 with a vote of 23 to 9 in the Senate and 71 to 21 in the House, approving the $1.7 billion budget and squeezing out $166 million in new revenue, along with ending the special session that began Sept. 8.
But the agreed upon budget didn’t come easily. It took a grueling six months and two special legislative sessions before legislators agreed on the new budget. It was finalized with Gov. Robert Bentley’s signature Sept. 17.
The new budget, which is $83 million less than the 2015 budget, will maintain funding for some agencies and cut funding from others. Those that will remain the same are Medicaid, corrections, mental health, human resources and the court system. The budget will make an $80 million transfer of use taxes from the Education Trust Fund (ETF); increase taxes on cigarettes by 25 cents per pack; increase taxes on new prescriptions by 15 cents; and make a $400 per bed tax increase on nursing homes. The last two tax increases will help defer the cost of Medicaid.
Pardons and paroles will receive an additional $11 million, part of the $16 million now earmarked for prison reform in the state.
The Alabama Department of Environmental Management will see one of the largest losses, as its budget will be reduced from $1.2 million to $200,000. The Alabama Department of Economic and Community Affairs will lose $1.8 million of its $9.3 million allocation.
Transferring money
Although ETF will lose $80 million by way of Senate Bill 27’s passage, the 2016 fiscal year school budget should not be affected, according to news sources. The money being transferred would have gone into a budget stabilization account and not necessarily used for operations.
This transfer of money was paired with another bill, House Bill 29, and will amend the Rolling Reserve Act to free up money for school spending. The Rolling Reserve allocated money until the budget stabilization account reached 20 percent of the previous year’s ETF spending, but HB 29 will allow for a smaller reserve of 7.5 percent.
According to al.com, Rep. Bill Poole, R-Tuscaloosa, chairman of the House Ways and Means Education Committee, said the two bills would help both the General Fund and school funding in the long run.
After vetoing the budget lawmakers passed in early June, Bentley tweeted that the approved General Fund budget “isn’t a perfect budget, but we have made important changes to the way our state budgets. State agencies will be ready to operate Oct. 1.”
However, the long-term deficit in the General Fund remains, Bentley said, at about a half-billion dollars.
“We didn’t fundamentally solve the problems of the General Fund. Not yet. But we have made a start,” Bentley said.
He also said he would give serious consideration to supporting so-called “growth taxes” in the future, an effort spearheaded by Sen. Paul Sanford, R-Huntsville. The bill, also called the 78–22 bill, would “dump all tax dollars that grow over time as the economy grows into one pot of revenue,” according to al.com. The money would then be divided with 78 percent going to schools and colleges and 22 percent going to the General Fund.
With the next regular session to begin in February 2016, legislators will again need to be prepared to balance the books before the next paycheck, so to speak.
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