Governor Kay Ivey declared the 2023 First Special Session a success on Thursday afternoon after signing both bills into law.
House Bill 1 appropriated $1,060,000,000 in federal American Rescue Plan Act (ARPA) funds.
“I commend the Alabama Legislature for, once again, answering the call to invest these one-time funds wisely to make improvements in Alabamians’ quality of life, including water, sewer, and broadband expansion projects, as well as health care,” Gov. Ivey said. “Alabama can now look to a future of greater promise thanks to the steps we have taken this week to invest these funds wisely.”
Gov. Ivey also signed Senate Bill 2, a supplemental appropriation from the state general fund to pay off the remaining debt to the Alabama Trust Fund.
“Eleven years ago, during more challenging economic times, the state made a pledge to repay $437 million borrowed from the Alabama Trust Fund in order to bolster the General Fund,” Gov. Ivey said in a statement. “Last week, I called upon the Alabama Legislature to finally pay back the remainder of these borrowed funds, noting that, unlike D.C., we pay our debts. Today, I am pleased to report that lawmakers have responded to my call by swiftly passing legislation appropriating the final $59,997,772 payment due to the Alabama Trust Fund. This is responsible stewardship of the people’s money and a fitting start to a historic Session. I am proud to sign this Act restoring the Alabama Trust Fund.”
The state was forced to prorate the education trust fund (ETF) and state general fund (SGF) budgets in the fiscal year 2011 following the Great Recession of 2008 to 2010. The Legislators in 2009 and 2010 had wrongly expected a quick bounce back in the economy, so they did not make the cuts in the budgets needed to prepare state government for the new revenue realities once reserves and federal bailout funds were exhausted, resulting in a much harder budgetary hit than should otherwise have been necessary.
In 2014, voters approved a plan to allow the Legislature to raid the Alabama Trust Fund (ATF). The ATF is funded by oil and gas revenues and serves as the state’s investment account. A portion of that money’s earnings is used for several purposes, including supporting the SGF. Legislators promised voters that they would pay that money back. The state took $437 million from the ATF and made annual payments to pay that back for years. SB1 takes SGF surplus dollars left over from the fiscal year 2022 to pay back the remaining $59,997,772 balance freeing up fSGF revenues for other purposes moving forward.
HB1 appropriates $339,175,000 for healthcare, including $25 million for Mental health and $9 million for the expansion of telemedicine. $260 million will be used for broadband expansion, including a cybersecurity component.
$395 million will go to water and sewer projects, and $55 million will be used to compensate state agencies for the negative impacts of the COVID-19 pandemic. $1,179,000 will go for administrative costs of overseeing and allocating the money. This is the second and final tranche of the ARPA money.
Ivey called the special session during her state of the state address on March 7. Now that the special session is over, the 2023 Alabama Legislative Regular Session will resume on Tuesday.
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