Alabama General Fund could be $200 million short of requests
by Tim Lockette
Feb 02, 2013 | 4251 views |  0 comments | 6 6 recommendations | email to a friend | print
MONTGOMERY — Alabama’s General Fund revenue is about $200 million short of what state agencies say they need for 2014, Senate President Pro Tem Del Marsh, R-Anniston, said Friday.

The seeming shortfall might not be as bad as it sounds, Marsh said. While revenue for the General Fund, which pays for most non-education state agencies, isn’t projected to grow significantly in 2014, state agencies are asking for more money. That doesn’t mean the Legislature has to give them more money, Marsh said.

“Obviously, people are going to be screaming and hollering that they can’t do without,” Marsh said.

Lawmakers will get their first full look at the state’s budget figures Tuesday, when the Legislature convenes for the 2013 session. Past sessions have been plagued by growth in the state’s bill for Medicaid, which has swelled due to a post-recession increase in the number of Alabamians in poverty.

Last year, voters approved an amendment to take $437 million from a state trust fund to help pay for Medicaid for the next three years. But Medicaid costs continue to grow beyond the amount covered by that measure. Marsh said Friday that Medicaid’s 2014 budget request would likely be $60 million more than the budget request from the year before.

Medicaid is one portion of the state budget that lawmakers often aren’t at liberty to cut. Federal law requires the state to provide certain minimum services through Medicaid.

Still, Marsh said, it’s been done before.

“We don’t have to give them everything they ask for,” he said, noting that in 2012, the Medicaid asked for $625 million and got $603 million.

State Health Officer Don Williamson said Marsh’s estimate is likely based on the preliminary numbers his office provided to legislators weeks ago. He said that number is a “departure point” for budget talks.

“We’re still working on a number,” he said.

Alabama runs its government on two budgets. The General Fund covers non-education agencies and gets its money from state trust funds and a variety of taxes, and usually grows slowly. Schools are funded through the Education Trust Fund, or ETF, which gets its money from sales and income taxes, which grow when the economy does.

The ETF appears to be in better shape than the General Fund, according to Sen. Trip Pittman, R-Daphne, chairman of the committee that handles the education budget in the Senate. He said he expected the $5.4 billion education budget to grow by about $250 million for 2014. Much of that money was already committed, he said, to paying back loans from a state trust fund.

Prior commitments to other state programs, Pittman said, would leave little room for teacher pay raises.

“A pay raise, if there’s going to be one, is going to be very small,” he said.

The lack of growth in the General Fund has become an annual complaint for legislators. Marsh and Pittman both say they don’t expect the Legislature to raise taxes to bolster the General Fund. Rep. Patricia Todd, D-Birmingham, has filed a bill that would raise cigarette taxes by about 30 cents per pack. The same measure failed last year.

In past sessions, Gov. Robert Bentley has proposed merging the two budgets, but has met with resistance from legislators. Pittman said he opposed the idea because it could lead to Medicaid eating into education funding, just as it has eaten up the General Fund.

“The General Fund has really become the Health Care Trust Fund,” he said.

Capitol & statewide correspondent: 256-294-4193. On Twitter @TLockette_Star.
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