Trip Pittman: Education is an investment in Alabama’s future
In the special session that starts on Tuesday, Governor Bentley and the legislature will continue to work to pass a General Fund (GF) budget before the start of the 2016 fiscal year on October 1st. The challenges facing the GF budget are exploding costs associated with Medicaid, prisons, mental health, public safety and human resources, but Medicaid is the primary driver of costs. In 2004, Medicaid received a state appropriation of $200 million, which constituted 15% of the GF budget. By fiscal year 2015, Medicaid received $700 million, or 36% of the GF budget. For 2016, Medicaid has requested $750 million dollars. Unfortunately, because the federal government establishes Medicaid’s regulations there is little that Alabama can do to contain these cost increases. While the costs for programs like Medicaid have risen, Alabama’s economy and the state’s tax revenues are still recovering from the worst economic downturn since the Great Depression, meaning fewer dollars are available to solve rising costs for all of state government including education. In order to account for decreased education funding during the Great Recession, over the past few years the legislature made sound fiscal reforms that were difficult at the time but which have established a more secure foundation for education. Those reforms included changes to the Teacher Retirement System (TRS) and to the Public Education Employees Health Insurance Plan (PEEHIP), to stabilize and protect those programs. Further reforms included the elimination of the Deferred Option Benefit Plan (DROP) that had spiraled out of control. Classroom sizes were increased (we still have yet to return classroom sizes to their pre-recession ratios) and the legislature passed tenure reform, the Alabama Accountability Act, and a law expanding education choices for families by allowing the formation of charter schools. The Republican majority has accomplished all these reforms while fully funding Education appropriations over the last five years without proration and paying $437 million of debt back to the Alabama Trust Fund. These reforms were only possible with the 2011 passage of a budget reform law referred to as the Rolling Reserve Act (RRA). The RRA forces the legislature to write responsible budgets based on historical data rather than estimates, and established a stabilization account as a firewall to ensure our classrooms will not be thrown back into the devastating cycle of proration if the economy slows. Yet even with all these cost-saving reforms, funding for education is still $500 million less now than it was seven years ago at the start of the Great Recession. So the solution to the General Fund deficit should not be to dip into an Education budget still on the mend. To solve the underlying challenges in the GF budget, increased revenue coupled with structural reform is required. Options for additional revenue include a tax increase of $0.25 cents per pack of cigarettes, or perhaps reforming the business privilege tax to free small businesses from this expense while asking large and multi-state businesses to pay a little more. Other options could include a small tax on the purchase of soft drinks, an increase to the state sales tax, or removing or reducing the federal FICA deduction on individual tax returns. Some legislators, opposed to additional revenue measures but also somehow opposed to GF budget cuts, want to divert money from the education to the GF budget. They talk of shifting more of the Use Tax (which collected approximately $225 million in 2014) from Education to the GF budget without any replacement. Some even propose combining the budgets or raiding the Education budget’s stabilization account and diverting its projected balance to the General Fund, ignoring the fact that the stabilization account exists to prevent budget proration in uncertain economic times like we currently face. I hope my fellow legislators will oppose measures to raid education resources and thereby hinder essential on-going reforms. To divert almost a quarter billion dollars annually away from education avoids solving the underlying GF budget problems and will achieve nothing more than kicking the can down the road. Similarly, characterizing the projected, non-recurring funds in the Education budget’s stabilization account as a surplus is incorrect. Balancing the GF budget upon mere projections of non-recurring revenue is fiscally irresponsible and would have long-term negative consequences. The Education budget is Alabama’s jobs budget. By that I mean the Education budget invests in our workforce and economy by funding Alabama’s nationally recognized Pre-K program, our K-12 schools, community and technical colleges, and universities and research institutions. These investments are the key to Alabama’s future prosperity and will ensure our citizens can continue to pursue the American dream of economic independence and political liberty. Which legislators will stand with me and call for fiscally responsible solutions for the GF budget that do not involve the diversion of desperately needed education funds? The 21st-century economy will challenge us like never before and to succeed our children need the best education we can offer. A budget challenge exists, but it is with the General Fund, not the Education budget, and the legislature and Governor Bentley need to solve the General Fund deficit without compromising our future. # # # Senator Trip Pittman, a small business owner, represents District 32 (Baldwin County) in the Alabama Senate. He is Chairman of the Finance and Taxation Education Committee.
Legislative session enters home stretch with no budget fix
Alabama lawmakers on Tuesday begin the home stretch of the legislative session with their biggest challenge still unsolved: a shortfall in the general fund budget. There are four legislative meeting days remaining and so far no consensus on how to handle a projected $200 million shortfall in next year’s general fund budget. Legislators have been unable to agree on tax increases or on a proposal to shift some money from the education budget to avoid cuts to key state agencies. “I think most are resigned to a special session,” Senate Finance and Taxation General Fund Chairman Arthur Orr, a Republican of Decatur, said. The stalemate comes after months of negotiations by legislators on ways to fill the budget hole and warnings by Gov. Robert Bentley about the severe cuts to state services that will occur if they don’t. Lawmakers have rejected Bentley’s call for $541 million in new taxes. House GOP members temporarily backed a smaller $151 million tax increase but withdrew it after Senate leaders said GOP senators would oppose it. The session is expected to conclude next week, but by law must end by June 15. Here is a look at the status of other issues before lawmakers this session: Payday loans An effort to limit what payday lenders can charge on the short-term loans appears to be stalling again this legislative session. A House committee approved a bill that would give borrowers more time to repay a loan, taking the window from 14 days to six months. However, the bill has not gotten a vote on the House floor. Alabama Accountability Act Alabama lawmakers are close to making changes to a controversial school choice program that helps families pay for private school. A conference committee is considering the bill to expand the yearly cap on the tax credits that fuel the scholarships from $25 million to $30 million. It would also tighten income requirements on the scholarships and increase reporting requirements on the organizations that grant the scholarships. Abortion The bill that would ban abortion clinics within 2,000 feet of public K-12 schools has been approved by the House of Representatives but has not gotten a Senate vote. The bill would force a Huntsville abortion clinic, one of the state’s five abortion clinics, to move or close. Another House bill would ban abortions once a fetal heartbeat can be detected, which can happen as early as six weeks into a pregnancy, but has not gotten a floor vote. Marriage licenses/Gay marriage A bill, brought in response to the possibility of the U.S Supreme Court legalizing same-sex marriage, would get Alabama out of the marriage license business altogether. The bill would do away with current state marriage licenses issued by probate judges. Instead, couples would take a contract witnessed by a couple’s minister or attorney. The state Senate approved the bill but it has not gotten a House vote. Gambling A bill aimed at allowing a lottery and casinos in the state is dead for the session. The proposal did not get a floor vote in the Alabama Senate. In the final four days of the session, senators, under legislative rules, must unanimously agree to send approved Senate bills down to the House for consideration. The procedural hurdle dooms senators’ controversial bills in the final days of the session. Medical marijuana Like the gambling legislation, a Senate bill to allow the use of medicinal marijuana for certain illnesses and conditions, is also dead for the session because it did not get a Senate floor vote. The bill did get out of the Senate Judiciary Committee this year. Republished with permission of The Associated Press.
Alabama legislative week in review: May 26-28
The 26th legislative day ended with reports from House and Senate lawmakers that an August Special Session is likely in order to finish discussions on overcoming the states short-term and long-term budget shortfalls. Agenda items before lawmakers in August could include Senate President Pro Tem Del Marsh’s lottery and gaming proposal, various measures to increase state revenue, and a controversial proposal from Sen. Gerald Dial to eliminate earmarks and unify the education and general fund budgets. At a public hearing on Wednesday, agency chiefs outlined a list of horrible outcomes — from prison closures to shortages in mental health services — should the austere general fund budget come to fruition. Despite those concerns, lawmakers gave the budget proposal a favorable report by a vote of 13-0, moving the stripped-down budget closer to reality. Here is a quick week in review going through all of the major headlines from this week’s legislative agenda: Alabama lawmakers offered a final unanimous vote on a bill that would allow physicians to prescribe terminally ill patients promising, but unapproved medical treatments. House Bill 463, known as the Right to Try Act, allows doctors caring for people with terminal illnesses to prescribe medications that the Food and Drug Administration has deemed promising, but not yet ready for mass consumption. Thursday’s vote makes Alabama one of at least 12 states that have passed right to try legislation this year. • • • The Alabama House passed a bill to establish integrated care networks to allow more Medicaid recipients to stay in their homes instead of nursing homes. • • • The House also voted 68-26 to expand the Alabama Accountability Act and tighten restrictions on scholarships and the groups that distribute them.’ • • • Gov. Robert Bentley appointed the state’s first commission to oversee Alabama’s 25 community and technical colleges. Lawmakers say the eight-member commission will help schools to focus on developing more specialized training programs and preparing entry-level employees to meet growing workforce demands. • • • The House Judiciary committee offered a favorable report on House Bill 657, to ban employment discrimination on the basis of “immutable” characteristics that do not effect job performance. Bill sponsor Rep. Mike Ball said that the measure would protect differences in gender expression, gender identity and sexual orientation. The following day, lawmakers blocked House Bill 615, Rep. Chris England’s proposal to establish civil rights protections against any discrimination based on sexual orientation, gender identity, or familiar status.
House OKs expanding program helping pay for private school
The Alabama House on Thursday voted to expand a program that helps some families pay for private school, but it also wants to tighten restrictions on scholarships and the groups that distribute them. The House of Representatives voted 68-26 to approve changes to the Alabama Accountability Act. The Alabama Accountability Act provides income-tax credits — a dollar-for-dollar reduction on an income-tax bill — in exchange for donations to the scholarship-granting organizations. Children in failing public schools have priority for the scholarships. Failing schools are the bottom 6 percent of K-12 schools on standardized test scores. The bill expands the cumulative yearly cap on donations from $25 million to $30 million. It would also tighten income restrictions on recipients and expand reporting requirements for the organizations that hand out scholarships. Senate President Pro Tem Del Marsh praised the proposed changes to the program he helped create two years ago. He said the cap needed to be raised after a scholarship granting organization did not raise enough money to renew scholarships while there was ongoing litigation over the program. “It tightens up a lot of the accountability. I think it makes excellent challenges to the Accountability Act and will allow those worthy students and parents to continue to in the program,” Marsh said. The bill would also increase reporting requirements and specify that the Department of Revenue can audit the scholarship-granting organizations. The proposal would also tighten income requirements on new scholarship applicants to 185 percent of the federal poverty level. That means a family of four would have to earn $44,123 or less each year to qualify for the scholarship. The Alabama Senate sent the bill to conference committee to review a House change that will require the Department of Education to maintain a database of scholarship recipients’ test scores. Republished with permission of The Associated Press.
