The recently completed Regular Session of the Alabama legislature was a success.  It began on a high note and ended positively.  Why?  There was plenty of money to spend.  Both the General Fund Budget and the Education Budget had historic amounts of money.

Most of the focus of the Session was on budgeting, as it should be, because that is the only constitutional mandate that the legislature is tasked with in the 105 day Regular Session.

Gov. Kay Ivey laid out her agenda in her State of the State address, then sent her proposed budget requests over to the legislature.  The governor’s speech outlining her legislative agenda was about doing good things for education.  However, her desires were vague and her ask list was long and wishful, like a kid’s Christmas wish list.  It called for the state to give away the store.  It was as though she was running for reelection which everyone knows she cannot do.  Therefore, the veteran Senate treats her politely, but has relegated her to a lame duck status.  The legislature has taken total control of the budgeting process, as they should do under the Constitution.  The governor proposes and the legislature disposes.  The days of a strong armed, powerful, omnipotent governor that controls both the Executive and Legislative Branches are over.  The King George Wallace era is gone, probably forever.

The surplus in the Education Budget was enormous.  How to spend this surplus became the focus of the entire session.  There is a very accurate political assessment, that it is much more difficult to deal with a surplus budget than a lean or deficit budget.  George Wallace told me about this same thing during his last term as governor when I was a freshman legislator.

Accolades go out to Senator Arthur Orr (R-Decatur), Chairman of the Senate Education Finance and Taxation Committee and Representative Danny Garrett (R-Trussville), Chairman of the House Education Ways and Means Committee.  These two gentlemen essentially, singlehandedly wrote the Education Budget and did a masterful job.  They were cognizant that what goes up has to come down.  Therefore, they created several savings accounts and rainy day funds for the rainy days ahead, because they will come.

The Education Budget was an historic $11.5 billion.  It gave increases for pre–kindergarten programs, school supplies, school nurses and a significant 2% cost of living salary increase to teachers and support personnel.  All colleges and universities in the state received increased funding.  Non-education entities were given money.  There was $100 million for prison education.

The high profile aspects of the Education Budget windfall werea onetime rebate going back to taxpayers in November.  Governor Ivey had wished for a $400 per person and $800 per couple rebate.  However, the final result is $150 per person and $300 per married couple.  Most legislators preferred eliminating the grocery tax or long-term tax cuts to this one-time check back in November.  

The surprise in the Christmas stocking from the Education Budget surplus is the reduction on the state sales tax on groceries.  Eliminating or reducing the state tax on groceries has been championed by Democrats for years, as the tax is regressive and hurts the state’s lowest income earners the hardest.  However, the measure garnered Republican bipartisan support this year after 20 years and passed with an overwhelming vote in both Chambers. It is, however, a gradual reduction.  The grocery tax would decrease 2% in two steps,with the tax being reduced 1% this year and another 1% percent new year, if the funds are available.

The state General Fund had a good year as well.  The $3 billion General Fund was record shattering.  The largest in history.  The Chairmen, Senator Greg Albritton (R-Escambia) and Representative Rex Reynolds (R-Huntsville), oversaw a $159 million increase over the current year.  The largest increases in the budget were in Medicaid by $69 million and Corrections by $59 million more.

State employees will see a 2% increase in pay, which will go into effect as the new fiscal year begins October 1. The legendary head of the Alabama State Employees Association, Mac McArthur, has quietly garnered state employees a cost of living raise, five out of the last six years.

See you next week.