September 17, 2015
Legislative Days 5-7
Alabama Legislature Approves $1.7 Billion General Fund Budget, Sends To Governor Bentley
The Alabama Legislature this week completed the Second Special Legislative Session and sent a General Fund Budget to Governor Bentley for his signature. This was the third legislative session in Alabama since meeting for the first Regular Legislative Session in March, and the Second Special Legislative Session focused solely on passing a General Fund Budget.
When Governor Bentley first called a special session in order to fill the budget shortfall in the State’s General Fund Budget, there was some uncertainty as to how much money the legislature needed to find in order to avoid any cuts to state agencies. During the latest special session the legislature settled on $200 million being needed to avoid any state cuts. On Tuesday, however, with several legislators being staunchly opposed to tax increases, the legislature was able raise $166 million in new revenue for the General Fund. This included an $80 million transfer in use tax funds from the Education Trust Fund to the State General Fund.
$86 Million In New Taxes
- 25-cent per pack tax increase on cigarettes
- $400 per-bed tax on nursing homes
- 15-cent per prescription tax on pharmacies
On Wednesday the Senate began debate on the General Fund Budget that had been passed by the House earlier in the week. With $166 million in new revenue for the General Fund, the Senate was able to pass a budget that level funded Medicaid, the Department of Human Resources, the Judicial System, the Department of Mental Health, and the Department of Corrections/Pardons and Paroles including an $11 million appropriation for the prison reform measures passed during the Regular Session. Other state agencies, for the most part, received a 5.5% cut. The House concurred with the Senate changes, and the budget was sent to Governor Bentley last night for his signature who said, “I will carefully review the budget once it is received by my office, and I expect to sign it.” Governor Bentley’s full statement can be seen here.
$1.7 Billion General Fund Budget
- Medicaid, Corrections, Mental Health, Human Resources and the court system level funded
- Department of Senior Services loses $1.4 million of $30.3 million
- Alabama Department of Environmental Management loses about $1 million of $1.2 million allocation
- Pardons and Paroles is also level funded, but gets an additional $11 million for prison reform
Legislators will soon begin working on their plans for the next Regular Legislative Session which will begin in February 2016. Having endured two special sessions this year focused on the budget, we expect to see efforts by several legislators to reform the budgeting process as well as the way the legislature appropriates funds to state agencies.