Alabama Governor Calls Another Special Session to Address Budget Crisis

by | September 3, 2015

By Brian Lyman

Alabama Gov. Robert Bentley said Tuesday that he will call legislators back into session on Sept. 8 to address a $200 million shortfall in the General Fund budget.

The formal call detailing the issues to be addressed will be released later this week, according to the governor's office. Legislative leaders have indicated they will likely revive proposals brought up in the two sessions earlier this year. Those have yet to win final passage.

Jennifer Ardis, a spokeswoman for the governor, said earlier on Tuesday that Bentley was "close to pulling the trigger" on the special session. "The governor has his plan," she said. "It's minor details we're working out."

The General Fund faces a shortfall of at least $200 million in the 2016 fiscal year, which starts Oct. 1. Addressing the shortfall through cutting could lead to layoffs and devastate state services. The Alabama Law Enforcement Agency has already warned that it will have to shut down most drivers' license offices in the state should the cuts take effect.

Other cuts could be devastating. Reductions in Medicaid could impact the roughly 1 million Alabamians, more than half of whom are children, who are eligible for the program. It could also hurt the privately insured: pediatricians depend on Medicaid payments to keep their offices open, and many would have to cut back their services to meet the demand.

The cuts could also undermine efforts to address the state's prison overcrowding crisis, and could lead to layoffs of state employees. "There are a lot of folks getting concerned that this October 1 date is really approaching," House Ways and Means General Fund chairman Steve Clouse, R-Ozark, said Monday. "They're really concerned about mental health funding, Medicaid, the court system, juvenile probation officers, circuit clerk officers (and) public safety. "I think all these stakeholders are really getting concerned at this late hour, and I'm getting concerned too."

Two sessions of the Legislature have failed to find a solution for the shortfall. The governor, House of Representatives and Senate often find themselves at odds. Sometimes the divisions represent a three-way standoff. Other times, one group seems to cut into the dance of the other two.

Bentley has proposed a package of tax increases -- the latest was $300 million -- that have failed to advance through the Legislature. The House has proposed its own revenue measures which have yet to move out of a committee. Senate President Pro Tem Del Marsh, R-Anniston, has proposed legalized gambling as a potential solution, but both Bentley and House leadership have expressed skepticism about that.

The second special session may rehash the plots of the previous two sessions on the General Fund, though the ending remains unknown. Marsh last week said he had gotten many phone calls from people calling for tax increases to balance the budget, mainly from state employees. He remains opposed.

"People tend to vote their pocketbook, and I don't blame them," he said. "That's where the concerns are coming from, from state employees." Clouse said members of the Democratic and Republican caucuses met informally last week to discuss possibilities for revenue. There may be few new ideas. Most plans center on transferring the use tax, a sales tax on out-of-state purchases, from the Education Trust Fund to the General Fund. But the proposals discussed are those discussed before: A repeal of a FICA deduction to make up the $225 million loss in the ETF from the use tax transfer, plus increases in the maximum amount owed under the business privilege tax and the cigarette tax.

"I think there's the possibility of something new, but I just don't know what it would be right now," Clouse said. "I think it's just a continuation of the caucuses talking amongst themselves, the different plans they may support, and the amount of revenues."

For now, votes will have to come from within the Republican caucus. Democrats will not vote for new revenues without trade-offs.

"Our terms are very clear," said Lance Latham, a spokesman for the House Democratic Caucus. "It's going to have to be Medicaid expansion and a lottery, or we're not voting for new taxes."

Rachel Adams, a spokeswoman for House Speaker Mike Hubbard, R-Auburn, said in a statement he was speaking with the governor and leadership in the hopes of finding a budget solution.

"He is hopeful that an open dialogue will lead to common-sense reforms and ensure that essential government services continue to be provided," the statement said.

Marsh said he will not bring back his lottery and gambling proposal from the prior two sessions, though other legislators may attempt to revive the lottery proposal. With revenue measures starting in the House, Marsh said he had spoken more with Hubbard on the budget than with the governor.

"I keep in close contact with the speaker," he said. "As long as I do that, the direct communication (with Bentley) isn't necessary."

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