Revenue for the state's General Fund may shrink by as much as $28 million in fiscal 2014, state officials said in budget hearings Tuesday morning. Meanwhile, state agencies are asking for $263 million more than than they'll get by the end of fiscal 2013, which ends Sept. 30.
State number-crunchers say the situation isn't as bad as it was last year — when the Legislature opened with half-billion-dollar gap in the budget — but it's a budget squeeze that has become familiar to legislators since the 2008 recession.
"Every year, I keep expecting it to get better, and every year it's the same thing," said Rep. K.L. Brown, R-Jacksonville.
Norris Green, director of the Legislative Fiscal Office, told lawmakers the General Fund — which pays for non-education agencies — will have $1.66 billion on hand in 2014, about $28 million less than the $1.68 billion budgeted for the current year.
Finance Department Director Marquita Davis offered rounder, rosier numbers, saying the General Fund would take in about $1.7 billion. But both offices see the General Fund growth as essentially flat, at best, and both see state agencies' requests outstripping the General Fund.
At issue is the continued growth in Medicaid and the Department of Corrections. Together, budget officials say, the two departments take up 56 percent of the General Fund. In 1997, only 36 percent of the budget went to the two agencies. A growing prison population and a post-recession increase in the Medicaid rolls are largely responsible for that growth.
Gov. Robert Bentley's office has not yet released official budget requests for most state agencies, but Davis said Medicaid needed $700 million. That's nearly $100 million more than the $603 million the agency got in 2013, and tens of millions more than the request lawmakers predicted.
Asked for his actual budget request Tuesday morning State Health Officer Don Williamson declined to cite a number.
"I need $700 million, but I won't request that much," he said.
The situation for the Education Trust Fund, which pays for the state's schools, looked better than the General Fund picture. Alabama's education system is paid for largely through sales and income taxes, and Norris said the school system would likely have $237 million more on hand in 2014.
That growth was due to growth in the state's economy. Davis said the economy was projected to grow by 2.9 percent in 2014 and 2.6 percent in 2015.
Davis said Alabama wasn't alone in struggling to pay the bills after the recession.
"All states are facing these dilemmas," she said.
Davis presented a list of what other states are doing to fill budget gaps. Illinois released inmates, she said, and Georgia consolidated colleges. Fourteen states have raised cigarette taxes, Davis said.
Alabama has tried cuts, as well. The state has 34,657 employees in 2013, Davis said — about 3,000 fewer than in 2010. State officials are also trying to rein in the cost of Medicaid; a commission appointed by the governor has recommended moving to a system similar to managed care, while legislators are considering a bill intended to trim fraud and waste from the system. Lawmakers last year rejected a cigarette tax that would have generated an estimated $220 million per year. A smaller tax is proposed as a bill this year.
Bentley has rejected a call to expand Medicaid to about 300,000 new clients, something called for in the Patient Protection and Affordable Care Act, also known as Obamacare. Critics of that decision noted that the federal government would pick up the tab for the first three years of the expansion. Bentley said the system couldn't be expanded until it was fixed.
Rep. Patricia Todd, D-Birmingham, asked both Green and Davis if they'd calculated the budget effect of expanding Medicaid. Both said no.
"The reason we have not focused on it is that the governor's position is that he is not expanding Medicaid," Davis said.
Capitol & statewide reporter Tim Lockette: 256-294-4193. On Twitter @TLockette_Star.