Lawmakers set to tackle state budgets

Published 2:02 pm Friday, December 21, 2012

In February, legislators will meet in Montgomery to hammer out Alabama’s General Fund budget and Education Trust Fund.

Rep. Charles Newton, who represents District 90, said he expects to see an increase in the approximately $6 billion Education Trust Fund, which is funded by ten tax sources, the largest of which are the individual and corporate income tax, sales tax, utility tax, and use tax.

“During the last few years we have seen that revenue diminish, which forced us to do some different things like reduce the number of teaching slots,” Newton said. “I believe this year we’re going to have a little more money for education, and I hope we’ll be able to replace some of those teaching slots that we lost.”

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Newton said there has also been talk of a pay increase for teachers. If that is approved, it would be the first pay increase for teachers since 2008.

Newton wasn’t as optimistic about the state’s General Fund budget, which he says totals nearly $2 billion.

The General Fund supports state programs such as child development and protection, criminal justice, conservation efforts, economic development, public health and safety, mental health, Medicaid, legislative activities and the court system.

Taxes from more than 40 sources are deposited into the General Fund, with the largest sources being the insurance company premium tax, interest on the Alabama Trust Fund and state deposits, oil and gas lease and production tax, cigarette tax, ad valorem tax, and Alabama Alcoholic Beverage Control Board profits.

“We earmark so much of our money that we don’t have the flexibility to move money around when we need to,” Newton said. “I think we could hear talk of combining the two budgets into one to create more flexibility, but I don’t think we’re close to taking action on that yet.”

In September, Alabama voters overwhelmingly approved the transfer of more than $437 billion from the Alabama Trust Fund to the state’s General Fund.

The money, which will be transferred over three years, will be used to support the court system, prisons, Medicaid and other non-education areas of government.

With the passing of the referendum, which allows for the transfer for $145.8 million a year for the next three fiscal years, the General Fund is budgeted to spend nearly $1.7 billion in fiscal year 2013, a cut of $36.2 million from this year’s expected General Fund spending.

Newton said the bulk of the money in the General Fund is used to fund the state’s prison system and Medicaid, which provides health care for nearly 1 million Alabamians, cost the state approximately $615 million, while funding for the prison system is nearly $365.5 million.

Newton said that while there aren’t a lot of people lobbying for the state to spend more money on he prison system, the Department of Corrections, which oversees the state’s prisons, is under funded, which has led to overcrowding in the prisons.

He said the Department of Corrections has told lawmakers its needs another $40 million just to operate at it current level.

Newton said the Affordable Care Act will have an impact on how the state funds its Medicaid program.

“Under the new program, 300,000 to 400,000 more Alabamians will be eligible for Medicaid,” he said. “Gov. (Robert) Bentley’s position is that we can’t afford that, even with the federal government paying a portion of the costs. There are a lot of answers we don’t have yet, but I think it will impact the budget when we formulate it in February.”

The 2013 Regular Session will convene Feb. 5.