State Senate leader files plan to check Medicaid, prison spending

Alabama State House

Senate President Pro Tem Del Marsh has introduced a plan to address what he sees as the deeper issue in the current budget dilemma: growth in state spending on Medicaid and corrections. Late last week, Marsh filed Senate Bill 476 to limit the Alabama Medicaid Agency to no more than 10 percent Alabama’s total discretionary spending and to keep funding for the Alabama Department of Corrections below 5.5 percent.

According to a Yellowhammer News report, Medicaid now accounts for about 9 percent of Alabama’s appropriations and corrections makes up 5.1 percent.

Marsh told Yellowhammer News that he brought the bill because of his concerns over how the two programs have expanded in recent years. Here’s a quote from that interview:

“Because of the budget situation, we have been forced to take a deep dive into the issues with the General Fund and look at ways to make deliverable changes in the way we spend taxpayer money,” Marsh said. “This bill gives both Medicaid and corrections room to grow from their current allocation but caps the amount so we can begin to control spending within those two programs.”

Appropriations for both programs come from the state general fund: the Alabama Medicaid Agency absorbs about 35 percent of the general fund and corrections accounts for another 20 percent. However, Alabama’s healthiest revenue streams – personal income and sales taxes – are earmarked for the Education Trust Fund, not the general fund.

The governor has cited lack of revenue in the general fund as the basis for his plan to increase taxes by $541 million.

So far, lawmakers have failed to come to consensus on how to address the shortfall.