By Brian Lyman
Call it anticlimactic. Call it a breather between two very difficult budget debates.
Don't call it the end.
The Alabama Legislature ended a tense and unsuccessful special session Tuesday with passage of a handful of bills, most unlikely to impact a minimum $200 million shortfall in the state's General Fund budget. The deficit, if addressed solely through cuts, could slash state services, force layoffs of state workers, and possibly lead to lawsuits.
The House of Representatives and Senate could not find common ground on a solution. Divisions within the chambers also hurt efforts at addressing the shortfall. With each chamber killing the other's budget proposal, eyes Tuesday turned toward the reset button.
House Ways and Means chairman Steve Clouse, R-Ozark, said after adjournment that he believed a House move to cut $156 million from Medicaid -- which leadership insisted was a way to convey the seriousness of the budget issue -- had led to progress in the budget fight.
"We're back to square one," Clouse said. "But I think square one is a lot clearer now . . . I put up the amendment to isolate what I call the big elephant in the room, Medicaid, to try to generate some interest there, which it certainly did."
Gov. Robert Bentley, speaking to reporters Tuesday afternoon, said the session was "a failure, and I am disappointed."
"They have known about this issue, about this problem, for a number of months," he said. "The first failure occurred in the regular session. We called them back in in the special session, and they failed to pass a budget."
The governor said he will call a second special session. Bentley did not have a date for the session Tuesday afternoon, but said it would come before Oct. 1, the start of the 2016 fiscal year.
The House of Representatives Tuesday formally killed a $1.65 billion General Fund budget that narrowly passed the Senate on Monday. The budget, similar to one approved by the Legislature in June, cut state agencies by at least five percent and, in some cases, wiped out their General Fund appropriations entirely.
"The message it sends is that we never had a plan," said Rep. Laura Hall, D-Huntsville.
Some sniping between the chambers took place. Rep. John Knight, D-Montgomery, repeated his criticism of a Senate committee's move to kill two House bills dealing with oversight and removing earmarks from some agencies' revenue streams. Sen. Rodger Smitherman, D-Birmingham, criticized the House vote to kill the General Fund budget Monday evening.
"It's ridiculous for the House to kill the budget to (create) more anxiety for the citizens of Alabama," he said.
Most of the House's time Tuesday went to a lengthy debate over a bill sponsored by Sen. Trip Pittman, R-Montrose, which would require nonprofits that qualify for sales tax exemptions to obtain a certificate saying so. Democrats suggested it unfairly penalized nonprofits. Republicans said the bill aimed to prevent any abuse that may occur.
During the lengthy debate, Knight, calling for a point of order, asked House Speaker Mike Hubbard, R-Auburn, if the General Fund had been indefinitely postponed. Hubbard said yes.
"Then why are we here?" Knight asked.
The bill passed 48 to 22, after about three hours of debate. After passage, the House quickly moved through its remaining calendar before adjourning early in the afternoon.
Earlier in the day, the Senate recessed on a motion made by Senate President Pro Tem Del Marsh, R-Anniston. Marsh said he wanted to see how the House handled Senate legislation aimed at improving accountability for public money before beginning business.
"I know it's hard for you senators to talk about revenue measures when you won't be accountable first," Marsh told the body. "We tried to do that."
The Senate adjourned soon after the House left Tuesday.
Bentley called the Legislature back into session on July 13 in a move that surprised legislators. The governor has said in the past the timing was designed to tamp down on a push for gambling in the special session. He repeated that Tuesday, saying he did not want a lottery or casino-type gambling to be the "centerpiece" of the session.
"I wanted to go ahead and call it quickly so the gambling machine did not have time to ramp up and build up," Bentley said. "That's why we called it. It was a calculated decision to do that."
Democrats and Republicans in both chambers said the early call put a stop to efforts to develop solutions that could pass the chambers. Clouse said that with legislators vacationing in July -- as many Alabamians do -- the call put the Legislature at a "disadvantage."
"It was just almost impossible, with the challenges we have there," he said. "We really need to have a full 30-day session."
Bentley said Tuesday legislators had been working on the budgets since at least March, and should have known he could call a special session at any time.
"They came in and immediately took took three weeks off, and then they came back and really didn't have enough time to finish what they were going to finish," he said. "Or should have finished."
Problems beginning, solutions unknown
The effect of budget uncertainty are becoming visible. The State Employees Insurance Board, which sets insurance rates for state employees, has postponed consideration of insurance rates for next year. The board relies on state agency payments -- allocated through the General Fund -- for most of its funding.
"What we would do is proceed as status quo," said William Ashmore, CEO of the SEIB. "If nothing were to change, then we would keep everything in place as is until we hear different from the Alabama Legislature."
Legislators, meanwhile, will return to negotiating a budget solution, and trying to find bridges to repair a three-way split between Bentley, the House and the Senate. While Bentley and House leadership have included new tax or revenue measures in their budget proposals, Marsh has insisted that there is no support for taxes in the Senate. In turn, Bentley and House leaders have been skeptical of proposals from Marsh to use legalized gambling as part of a General Fund fix. The governor and the House have also disagreed about the amount of revenue needed to fix the budget.
Democrats in the House have said they will not consider voting for new taxes unless Medicaid expansion and a lottery are part of the mix. Clouse said Tuesday that Democrats would be "at the table" on budget negotiations; however, Republican legislative leaders, with large majorities in both chambers, do not appear to have made Democratic votes critical to their packages.
"There's not been any discussion," Hall said. "There's been some assumptions, and you know what that means."
Amid the fighting, there are some broad agreements. Bentley and legislators in chambers want to transfer the state's use tax, a growth revenue, to provide stability to the General Fund. Raising a business privilege tax threshold also seemed to have broad support before a House revenue plan collapsed last week.
Clouse said Tuesday that he believed it was clearer to House members that revenue measures were needed. The chairman said he thought the General Fund needed about $200 million in revenue for stability, though he said some cuts were likely.
"But it can't just be this meat cleaver approach," he said. "We have to get to level-funding on these major agencies, such as Medicaid and prisons. And of course, Medicaid and prisons are going to require more than level-funding for the reforms that we put into effect and start implementing those reforms."
Bentley said Tuesday he believed $300 million in revenue for the General Fund would create a long-term solution. The governor legislators were "going to have to vote on taxes" to find a proper solution.
"There will be some tough decisions made," he said. "The decisions will be adequately fund the services of government in this state, or have drastic cuts that will hurt people. That's what we need to remember. These cuts are not just to fund archives, or to fund Medicaid or to fund an agency. These cuts affect people's lives."
(c)2015 the Montgomery Advertiser (Montgomery, Ala.)