The State of Alabama fiscal year begins this week and we finally have a budget for the year. Constitutionally, the only mandatory requirement that the Legislature has each year in their legislative session is to pass the budgets. The Education budget was approved during the four month Regular Session, but it was uncertain if we would have a budget for the beleaguered General Fund.
Gov. Robert Bentley called a Special Session in early summer to pass a budget. However, despite costing taxpayers around $400,000, there was still no budget. Therefore, the Governor called yet another Special Session for September. The third time was a charm. A budget was passed with only two weeks to go until the fiscal year begins this Thursday.
It is uncertain what would have happened if the legislature had failed on their third try. Most people assumed the state would have simply closed down. The Governor and Legislature avoided a total shut down of State government. However, most state agencies and most state workers would argue that the recently passed budget partially shuts down state operations.
It is indeed a patched together, barebones budget. The $1.7 billion General Fund Budget level funds the major departments of Medicaid, Corrections, Mental Health, Human Resources, Pardons and Paroles and the Court system. Most other State agencies saw cuts of between 5 to 10 percent from last year’s budget.
In the end, the legislature cobbled a budget together by taking $80 million dollars out of the Education coffers and also passing a 25 cents per pack increase on cigarettes, which will raise another $70 million dollars. Therefore, the General Fund is receiving around $150 million in additional funding.
Governor Robert Bentley began the year proposing a hodge podge of tax increases totaling $720 million dollars of new money for the General Fund. He later pared that down to $540 million dollars in proposals. The Legislature quickly and decisively made it clear to our old doctor governor that they were real Republicans and they did not want any part of new tax revenue. They sent Bentley a message that they adhered to the cardinal Rule of Republicanism, “No New Taxes.” It also was made apparent to the administration that the Governor might propose, but the Legislature disposes when it comes to appropriating state dollars.
In the end, however, the Legislature did adopt $150 million of the $540 million proposed by the Governor in February. As the final Special Session began, it was generally bounced about that $200 million dollars was the amount needed to keep state government at least afloat for another year. Even though the large agencies like Medicaid and Prisons were level funded, they said rising costs could still affect basic services. This budget keeps prison capacity in the state at 200 percent. The Federal Courts took over California prisons at less than 150 percent of capacity.
The Alabama Department of Environmental Management was emaciated. Its budget was reduced from $1.2 million to $280,000, a 77 percent cut. Their director indicated that they would make up their deficit by raising fees on permits by 20 percent.
The Department of Senior Services and the Attorney General’s office were especially hit hard. Most insiders believe the Attorney General’s budget has been targeted the past two years because Attorney General Luther Strange’s office is prosecuting House Speaker Mike Hubbard.
The real loser in the General Fund battle is public education. For over three decades, from the 1970’s to 1990’s, education dollars were sacred. Dr. Paul Hubbert and his AEA were so powerful and dominant that he would have never allowed the Legislature to rob $80 million from the educators to balance the General Fund Budget.
When the Republicans took control of the Legislature in 2010, they made it their mission to dismantle and destroy the AEA. They accomplished their mission in four short years. Therefore, it was an easy prey to simply take education money to resolve this year’s dilemma.
This budget is only a short term fix. There were no long term solutions addressed. The General Fund Budget will need another transfusion next year, but for now the legislature has found an easy solution – just take it from education. The AEA has no political clout or power anymore. In fact, the AEA has been so decimated they do not even have a PAC.
Let the fiscal year begin. The next Regular Session is only four months away.
See you next week.