On Wednesday, the Alabama Housed Ways and Means General Fund Committee advanced Senate legislation, SB1, to pay off the final balance on a debt that the Legislature borrowed from the Alabama Trust Fund.
Senate Bill 1 is chaired by State Sen. Greg Albritton.
State Representative Rex Reynolds chairs the committee.
“I expect this to go quick as this committee passed the same legislation as a House Bill last week and passed on the House floor,” Reynolds said. “Since I am carrying the bill, I will turn over this to my Co-Chair, Rep. [Kyle] South.”
Rep. Kyle South asked that the bill be brought up.
Reynolds said, “SB1 is the exact same bill as HB2. It appropriates $59,975,672 to pay off the balance owed to the Alabama Trust Fund. It is what we committed to under the People’s Trust Act.”
The bill received a favorable report, and the committee adjourned. The full House can consider SB1 as early as Thursday.
The Senate passed SB1 on Tuesday. The House also passed its trust fund debt bill, HB2, on Tuesday.
The Alabama Trust Fund is funded by revenues from the state’s oil and gas leases. It serves as the state’s savings account. A portion (69%) of the investment revenue from the Alabama Trust Fund is used to fund the state general fund (SGF). The remainder of the ATF revenues also funds cities, counties, Forever Wild, and senior services.
State SGF revenues dropped from approximately $2.1 billion a year during the Great Recession to $1.6 billion. Once all the reserve fund and federal emergency bailout funds were exhausted, and budget cuts were made, state Legislators were left with the difficult decision. They could release thousands of state prisoners and/or cut benefits for hundreds of thousands of Alabamians who get their healthcare from Alabama Medicaid (which would have resulted in a federal lawsuit). Alabama Medicaid and the Alabama Department of Corrections are the two largest agencies funded by the SGF. Voters in 2014 approved a plan by legislators to raid the $3.2 billion Alabama Trust Fund to avoid devastating general fund cuts
The ATF balance was $2,430,232,27 in 2015. As of September 30, 2022, the balance declined by $767 million due to investment downturns to $3.1 billion. The ATF distributed $197.4 million in FY2022.
The Senate Finance and Taxation General Fund Committee, chaired by Albritton, met on Wednesday and gave a favorable report to the American Rescue Plan Act appropriations bill, HB1, which appropriates $1,060,000,000 in one-time federal dollars given to the state by Congress. The committee did not take up HB2, so at this point, it appears that SB1 will be the trust fund repayment bill that is best positioned for passage.
The full House can now consider the legislation as early as Thursday.
The Alabama Legislature is currently in its First Special Session. It is hoped that the body will be able to resume the 2023 Alabama Regular Session on Tuesday, March 21.
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