“While the General Fund budget looks really good for what it is, what it is is not enough.” Arise policy analyst Carol Gundlach breaks down what’s missing from the General Fund budget that the Alabama House passed April 9.
Issue: Budgets
Alabama’s K-12 funding still far lower than a decade ago, despite recent gains
Alabama increased state education funding in 2018, but the legacy of years of extreme cuts remains, according to a new report from the Center on Budget and Policy Priorities (CBPP), a nonpartisan research organization based in Washington, D.C.
Alabama increased its K-12 formula funding by 1 percent per student last year. But that funding is still far below pre-recession levels: 15 percent less per student after adjusting for inflation.
“It’s good that state K-12 funding is moving in the right direction again, but Alabama must do much more to get our education system back on track,” Alabama Arise executive director Robyn Hyden said. “Otherwise, we risk falling even further behind states that invest more in their schools.”
Formula funding is the main state revenue source for K-12 schools nationally. It is especially important for schools in high-poverty areas, which educate a disproportionate share of black and Hispanic children. But state cuts have forced many cities and counties to cover more of the cost of education. Between 2008 and 2016, the national average for state funding declined by $167 per student. Average local funding grew by $161 during that time.
“The effects of state funding cuts are evident in teacher pay. Some 42 states cut the average teacher’s salary relative to inflation between 2010 and 2017,” said Michael Leachman, CBPP’s senior director of state fiscal research. “That is why teacher protests have emerged in many states recently.”
Adequate school funding can strengthen state economies. But steep funding cuts make it hard for states to reduce class sizes, extend learning time and enact other reforms to help students thrive.
“Alabama should close income tax loopholes that overwhelmingly benefit wealthy people and large corporations,” Hyden said. “That would allow our state to boost investments in K-12 education and offer pre-K to all families. And it would increase economic opportunities for low-income students and communities of color, who face the greatest barriers to education.”
How to advance our vision for Alabama’s next century
What kind of future do we want for Alabama? It’s a question worth reflecting on as our state enters its third century this year. Are we all right with limiting power and prosperity to a select few? Or would we rather build a state where everyone has a voice and where people of all races, genders and incomes have a real chance to get ahead?
Alabama Arise believes in justice and opportunity for all, and our policy priorities flow from that vision. It’s why we support expanding Medicaid for Alabamians who can’t afford coverage. It’s why we want to rebalance an upside-down tax system that taxes struggling families deeper into poverty. And it’s why we urge stronger investments in education, housing, public transportation and other services that improve quality of life and promote economic opportunity.
We expect lots of infrastructure talk at the Legislature this year. The regular session starts Tuesday, but lawmakers may move quickly into a special session on the gas tax. Gov. Kay Ivey has asked legislators to increase the state’s 18-cent gas tax by 10 cents over three years. That money would fund road and bridge maintenance and other infrastructure improvements.
Many of Alabama’s deteriorating roads are overdue for repair. But the definition of “public infrastructure” goes far beyond tar and gravel. Education, health care and public transportation also help lay the foundation for shared prosperity. This session could bring chances to strengthen those investments – and to make the tax system that funds them more progressive.
Hope on grocery tax, Medicaid expansion
One key breakthrough could be on a longtime Arise priority: ending the state grocery tax. We came heartbreakingly close in 2008, when a bill to untax groceries passed the House and fell one vote short in the Senate. But Arise members never gave up the advocacy fight. Now legislators face renewed pressure to end or cut the state’s 4 percent sales tax on groceries. (Some conservative lawmakers are urging a grocery tax reduction to accompany a gas tax increase.) Alabama is one of only three states with no tax break on groceries. It’s a highly regressive tax on a basic necessity, hitting hardest on people who struggle to make ends meet.
Pressure also is building for Alabama to expand Medicaid to cover more than 340,000 adults with low incomes. Medicaid expansion would save hundreds of lives annually and create a healthier, more productive workforce. It also would help save rural hospitals, support thousands of jobs and pump hundreds of millions of dollars into the economy.
Our work for a brighter, more inclusive future won’t end there. We’ll keep pushing for stronger consumer protections against high-cost payday loans. We’ll make the case for the state to fund public transportation and remove barriers to voter registration. And we’ll continue seeking an end to injustices in Alabama’s civil asset forfeiture and death penalty systems. Visit our website and follow us on Facebook and Twitter for updates on these issues throughout the year.
Budget hearings show need for Alabama to expand Medicaid, boost public investments
Alabama needs to expand Medicaid and invest more in education and other human services. Those were key takeaways from this week’s state budget hearings in Montgomery. The hearings highlighted a range of policy challenges and illustrated the connections between many of them.
We heard a lot of talk this week about the need to strengthen Alabama’s “infrastructure.” Many legislators say the state just doesn’t have enough money to make further investments in human infrastructure – the services like health care, child welfare and public safety that serve as a basic measure of what we value. But that’s incorrect.
Alabama’s lack of money for education, health care, child care and other services isn’t a natural force like the weather. It’s the result of decades of policy choices, as our Tax & Budget Handbook shows. And better choices can lead to better outcomes for Alabama.
Medicaid expansion could cut costs for corrections, DHR
Numerous agency leaders identified Alabama’s fraying rural health care system as a major concern. Rural hospital closures hurt communities and make it harder to get care. A lack of mental health care takes a toll on families, schools and workers. And both challenges increase financial strain on the corrections system.
The opioid epidemic is one problem that cuts across multiple areas: corrections, education, human resources, law enforcement, Medicaid, mental health and public health. Many parents fighting addiction lose child custody to the Department of Human Resources (DHR), which struggles to recruit foster parents for an average $16 daily allowance.
While bare-bones health agencies tackle the epidemic’s medical consequences, Alabama’s corrections system has emerged as the largest provider of mental health services, with many of them linked to substance use disorders.
That’s true even as Alabama’s prison overcrowding remains staggeringly high. The state prison system once operated at nearly double its designed capacity. Recent sentencing reforms helped cut that rate to 163 percent, and Corrections Commissioner Jeff Dunn expects it to sink to 145 percent. But further reductions are unlikely without broader changes, Dunn said.
Rural hospital closures affect prison overcrowding, too. Sen. Cam Ward, R-Alabaster, said a private prison in Perry County is vacant despite an appropriation to buy it. The county has no hospital, which would make it hard to use the prison even if the state bought it, Ward said.
Medicaid expansion would cut costs and improve lives across all these areas of concern. It would stem the tide of rural hospital closures. It would expand access to mental health and substance use treatment. And that would save many Alabamians from going to jail or losing child custody. Arise members and other advocates must keep making the case for Medicaid expansion throughout 2019.
Decades of inadequate funding cause unmet needs, staff shortages
Our state’s upside-down tax system requires most Alabamians to pay twice the share of income in state and local taxes that the richest households pay on average. It also means Alabama struggles to raise enough money to fund health care, child welfare and other important services.
Staff shortages were a running theme at this year’s budget hearings. Alabama’s corrections and mental health commissioners both emphasized problems with hiring and keeping qualified employees. DHR cited high turnover in child welfare staff, who are first on the scene when children’s safety is at risk. And the Alabama Law Enforcement Agency (ALEA) needs more state troopers to ensure highway safety.
DHR Commissioner Nancy Buckner asked lawmakers for an additional $21 million for 2020. Buckner said DHR struggles to retain staff, especially in the stressful child welfare division, which has 36 percent turnover. “Anything you can see on TV, we probably have multiple cases,” Buckner said.
The new money would allow for salary increases, technology improvements, and higher payments for foster families, Buckner said. Foster parents are difficult to recruit, she said, and the opioid epidemic has left more children in foster care.
For corrections, Dunn asked for another $42 million to hire and retain 500 prison guards and improve mental health services. (Low unemployment makes it harder to retain officers, Dunn said, because they often can earn more at safer jobs.) A federal judge has ordered Alabama to address its guard shortage and inadequate health services in state prisons.
ALEA Secretary Hal Taylor requested another $8.7 million to provide raises and hire 50 new state troopers. Up to 200 troopers could retire soon, Taylor said, and ALEA must compete with other departments for officers.
K-12 schools seek to hire more teachers, expand mental health support
Alabama schools discussed their needs for 2020 as well. State school Superintendent Eric Mackey requested an additional $295 million from the Education Trust Fund. With that money, schools could hire more teachers in grades 4-6 and invest more in the Alabama Reading Initiative. They also could hire more school nurses and provide a $600 allowance per teacher for classroom supplies.
Mackey asked for an extra $270 per student to teach about 25,000 students for whom English is a second language. And he requested another $22 million for school safety improvements and school-based mental health services.
Mackey echoed other agency heads by raising concerns about future personnel shortages. A recent survey of high school seniors found only 4 percent want to become teachers, down from 12 percent in previous surveys, Mackey said.
Sen. Vivian Figures, D-Mobile, asked Mackey to address the state Department of Education’s listing of 76 schools as “failing.” Most of those schools are in low-income areas and serve mostly black students. Mackey said the Alabama Accountability Act requires him to designate the lowest performing 6 percent of schools as “failing,” no matter how well they may educate students. The Accountability Act, enacted mere hours after introduction in 2013, diverts tens of millions of dollars a year from public schools to private school scholarship funds.
ALL Kids, pre-K, SNAP offer models for success
The budget hearings painted a stark picture of Alabama’s challenges, but they brought good news, too. Lawmakers heard numerous examples of how investments in health care and education are paying off.
Alabama’s rate of uninsured children is among the South’s best, and ALL Kids is a big reason why. The program provides health coverage for children whose low- and middle-income households don’t qualify for Medicaid. ALL Kids was the country’s first Children’s Health Insurance Program, and it remains a national performance leader in children’s health coverage.
The Program for All-Inclusive Care for the Elderly (PACE) provides an exemplary community-based long-term care option for residents of Mobile and Baldwin counties. The state’s commitment to pre-kindergarten has created a model for early childhood education. And aggressive workforce training programs in K-12 and two-year colleges are boosting Alabama’s economic potential.
Medicaid Commissioner Stephanie Azar highlighted investments in long-term care reform and primary care reform. The statewide Integrated Care Network (ICN) has already launched its case management system, designed to steer more long-term care patients into home- and community-based services. On the primary care side, Alabama Coordinated Health Networks (ACHNs) will launch in seven regions this fall. That move will bring Medicaid decision-making closer to communities and emphasize preventive and coordinated care.
Buckner thanked DHR’s Food Assistance Division for ensuring Alabamians received benefits under the Supplemental Nutrition Assistance Program (SNAP) during the recent federal government shutdown. Facing a Jan. 20 deadline to distribute February benefits, employees worked nights and weekends to approve 1,700 SNAP applications.
Buckner also praised the Food Assistance Division for earning federal bonuses of $2.4 million for timely processing of applications and low error rates in benefit calculations. Unfortunately for Alabama, which has a highly efficient and accurate SNAP program, Congress ended future bonuses in the 2018 Farm Bill.
It’s time to invest in a brighter future
Successful investments like these aren’t “one and done.” Alabama must resume providing some state money for ALL Kids next year as full federal funding ends. PACE seeks to expand, but its requests have been rejected so far. Only one-third of Alabama’s 4-year-olds are enrolled in pre-K. And gearing up for the 21st century will require even bolder workforce development.
Treading water is not enough. Education, Medicaid and other vital services need more funding so they can do more than the bare minimum. Smart investments in these services will pay off in a stronger, healthier future for all Alabamians.
Policy director Jim Carnes, policy analyst Carol Gundlach and communications director Chris Sanders contributed to this post.
Alabama’s state higher ed funding cuts since 2008 are country’s third deepest
Alabama’s cuts to state higher education funding over the last decade are among the deepest in the country, according to a new report from the Center on Budget and Policy Priorities (CBPP), a nonpartisan research organization based in Washington, D.C. The funding decline persisted even as the state’s economy began to rebound from the Great Recession.
Since 2008, Alabama has slashed state higher education funding by 34.6 percent or $4,290 per student, CBPP found. The state’s cuts are the nation’s third worst by dollar amount and fifth worst by percentage. Nationally, the average cuts since 2008 are 16 percent or $1,502 per student.
Alabama’s inadequate public investment in higher education over the last decade has contributed to rising tuition prices, often leaving students with little choice but to take on more debt or give up on their dreams of going to college. Between 2008 and 2018, the average tuition at public four-year institutions in Alabama jumped by $4,329, or 69.8 percent – far outpacing the national average growth of 36 percent. These soaring costs have erected barriers to opportunity for young people across Alabama, particularly for black, Hispanic and low-income students.
“Pushing the cost of college onto students and their families will not make our state stronger,” Alabama Arise policy analyst Carol Gundlach said. “We must invest adequately in higher education to be able to build an Alabama where everyone has the opportunity to succeed.”
Americans’ slow income growth has worsened the college unaffordability problem. While the average tuition bill increased by 36 percent between 2008 and 2018, median incomes grew by just over 2 percent. Nationally, the average tuition at a four-year public college accounted for 16.5 percent of median household income in 2017, up from 14 percent in 2008.
In Alabama, a college education is even less affordable, especially for black and Hispanic families. In 2017, the average tuition and fees at a public four-year university accounted for:
• 21 percent of median household income for all Alabama families.
• 32.2 percent of median household income for black families in Alabama.
• 26.8 percent of median household income for Hispanic families in Alabama.
“The rising cost of college risks blocking one of America’s most important paths to economic mobility,” said CBPP senior policy analyst Michael Mitchell, the report’s lead author. “And while these costs hinder progress for everyone, black, Hispanic and low-income students continue to face the most significant barriers to opportunity.”
Financial aid has failed to bridge the gap created by rising tuition and relatively stagnant incomes. As a result, the share of students graduating with debt has increased. Between 2008 and 2015, the share of students graduating with debt from a public four-year institution rose from 55 percent to 59 percent nationally. The average amount of debt also increased during this period. On average, bachelor’s degree recipients at four-year public schools saw their debt grow by 26 percent (from $21,226 to $27,000). By contrast, the average amount of debt rose by only about 1 percent in the six years prior to the recession.
A large and growing share of future jobs will require college-educated workers. Greater public investment in higher education, particularly in need-based aid, would help Alabama develop the skilled and diverse workforce it needs to match the jobs of the future.
“All Alabamians, regardless of their income or where they grow up, deserve an opportunity to reach their full potential,” Gundlach said. “Our state should end tax breaks for large corporations and invest in making college more affordable for the students who need assistance the most.”
Medicaid expansion, end to grocery tax highlight Alabama Arise’s 2019 priorities
Medicaid expansion and legislation to end the state sales tax on groceries are among the top goals on Alabama Arise’s 2019 legislative agenda. More than 200 Arise members picked the organization’s issue priorities at its annual meeting Saturday, Sept. 8, 2018, in Montgomery. The seven issues chosen were:
- Tax reform, including untaxing groceries and closing corporate income tax loopholes.
- Adequate funding for vital services like education, health care and child care, including approval of new tax revenue to protect and expand Medicaid.
- State funding for the newly created Public Transportation Trust Fund.
- Consumer protections to limit high-interest payday loans and auto title loans in Alabama.
- Legislation to establish automatic universal voter registration in Alabama.
- Reforms to Alabama’s criminal justice debt policies, including changes related to cash bail and civil asset forfeiture.
- Reforms to Alabama’s death penalty system, including a moratorium on executions.
“Public policy barriers block the path to real opportunity and justice for far too many Alabamians,” Alabama Arise executive director Robyn Hyden said. “We’re excited to unveil our 2019 blueprint to build a more just, inclusive state and make it easier for all families to make ends meet.”
Alabama’s failure to expand Medicaid to cover adults with low wages has trapped about 300,000 people in a coverage gap, making too much to qualify for Medicaid but too little to receive subsidies for Marketplace coverage under the Affordable Care Act. Expanding Medicaid would save hundreds of lives, create thousands of jobs and pump hundreds of millions of dollars a year into Alabama’s economy. Expansion also would help keep rural hospitals and clinics open across the state.
The state grocery tax is another harmful policy choice that works against Alabamians’ efforts to get ahead. Alabama is one of only three states with no sales tax break on groceries. (Mississippi and South Dakota are the others.) The grocery tax essentially acts as a tax on survival, adding hundreds of dollars a year to the cost of a basic necessity of life. The tax also is a key driver of Alabama’s upside-down tax system, which on average forces families with low and moderate incomes to pay twice as much of what they make in state and local taxes as the richest Alabamians do.
Education budget, landlord-tenant changes, HIV drug bill advance in Alabama Legislature
K-12 teachers in Alabama wouldn’t get a raise next year under the Education Trust Fund (ETF) budget that a House committee approved Wednesday. The House is expected to vote on the plan next week.
The committee’s $5.9 billion budget would restore $10 million of state funding for Alabama State University that the Senate had removed. It also would include slight increases for K-12 and higher education, though next year’s ETF funding still would not come close to pre-recession levels. Check out AL.com’s report for more details.
Landlord-tenant revisions move closer to becoming law
Bills that would adjust several parts of Alabama’s landlord-tenant law in property owners’ favor are on the move in the Legislature. Without debate, the House voted 98-0 Tuesday for HB 523, sponsored by Rep. Paul Beckman, R-Prattville. A day later, a House committee approved SB 291, sponsored by Senate President Pro Tem Del Marsh, R-Anniston.
Both proposals would give landlords more time to refund a security deposit or give notice of why they are keeping some or all of it. The bills would increase that window from 35 days to 60 days. The measures also would allow landlords to treat a property as abandoned if electrical service is cut off for at least a week. In addition, landlords would have to provide only a seven-day written notice if they plan to terminate the lease for a violation that does not involve failure to pay rent. That would be down from the current 14-day timetable.
The only difference between the bills involves renters’ right to correct problems cited as a lease violation without getting the landlord’s written consent. SB 291 would give renters four chances every 12 months to correct such problems, while HB 523 would provide only two chances every 12 months.
Senate panel OKs bill to allow redistribution of some unopened HIV drugs
Pharmacies that dispense HIV medications for or in HIV clinics could redistribute certain unopened drugs under a bill that the Senate Health Committee approved Wednesday. SB 437, sponsored by Sen. Linda Coleman, D-Birmingham, moves to the Senate. A nearly identical House bill – HB 138, sponsored by Rep. Patricia Todd, D-Birmingham – passed the House 99-0 last week and awaits the Senate committee’s consideration.
HIV clinics now must destroy unopened medications if patients do not show up for treatment. HB 138 and SB 437 would allow pharmacies to dispense those drugs to other patients and would set controls on handling and oversight of the drugs. Arise and other consumer advocates last year urged Gov. Robert Bentley to support this policy change as his Medicaid Pharmacy Study Commission met to look at ways to reduce costs in the state’s Medicaid drug assistance programs.
Lawmakers will return Tuesday for the 25th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.
By Chris Sanders, communications director. Posted March 14, 2014.
Medicaid work requirements, ALL Kids, prison mental health funding among top 2019 budget challenges in Alabama
Alabama Medicaid had good news for legislators last week, but it won’t last long. Lower-than-expected prescription drug costs will help Medicaid carry $53 million forward into 2019, meaning the agency will need less General Fund (GF) money next year than initially expected, Medicaid Commissioner Stephanie Azar said during state GF budget hearings Thursday. But that still won’t solve Medicaid’s need for stable, adequate long-term support.
Medicaid funding is just one of many GF challenges for Arise and other advocates this year. In a move that would create new barriers to health care for many low-income households, Alabama may seek to increase copays and impose work requirements for some Medicaid patients. The future of federal funding for ALL Kids, which provides health coverage for more than 85,000 children across the state, remains uncertain. Alabama also faces a federal court order to invest more in mental health care and other health services in state prisons.
Those issues and many others stand against the backdrop of a GF that struggles with a long-term structural deficit. That means GF revenue growth is not strong enough to keep pace with ordinary cost growth for Medicaid, mental health care, corrections and other services.
But lawmakers may be able to get through this year without addressing those deeper budgetary problems. The GF will carry forward $129 million into next year, enough to cover most of the requested increases for Medicaid, mental health care and corrections if Congress provides full federal funding for ALL Kids over the next two years.
The Legislature will have to finalize budgets for both the GF and the Education Trust Fund during a fast-moving 2018 regular session, which began Tuesday and is expected to end in March.
Temporary ‘good news’ won’t solve long-term Medicaid funding woes
Medicaid provides health coverage for one in five Alabamians – most of whom are children, seniors, pregnant women, or people with disabilities. The federal government provides about 70 percent of Medicaid funding in Alabama. The rest comes from the GF (11 percent) and other state sources like provider taxes on hospitals, nursing homes and pharmacies (19 percent).
Medicaid received $806 million from the GF last year, of which $105 million was one-time money from the state’s share of the BP oil spill settlement. Medicaid’s 2019 GF request is for $757 million. That would be 6 percent less than the agency’s total GF allocation last year, but 8 percent more than the amount that Medicaid received out of recurring GF revenues.
The end of Medicaid’s regional care organization (RCO) initiative in July 2017 also drew great legislative interest during the hearings. Azar discussed an “RCO pivot,” which will preserve several features of the RCO plan, with a broader scope and some structural changes. The basic idea of coordinating patient care to produce better health outcomes will continue to drive the reforms, Azar said. But new federal rules will allow Alabama to include more categories of patients in the new system.
Like the RCOs, the “pivot” plan will build on existing care management initiatives known as “health homes,” Azar said. Health homes seek to cut costs and keep patients healthier by using primary care doctors to coordinate enrollees’ health care. Alabama Medicaid has operated health homes since three regional pilot projects launched in 2010.
Arise is committed to ensuring strong consumer oversight and community engagement in whatever shape the new Medicaid reforms take. In a written proposal to Medicaid last fall, Arise emphasized that our statutory responsibility to provide consumer representatives for RCO advisory committees and governing boards gave Arise and our partners at the Disabilities Leadership Coalition of Alabama both a wealth of experiential learning over the last three years and a team of trained appointees eager to participate in the transition.
Azar reaffirmed her support for consumer involvement after the budget hearing, but advocates must keep up the pressure to ensure that principle becomes reality. To that end, Arise and our allies will provide comments on the draft Medicaid reform plan when it is unveiled in coming weeks.
Medicaid work requirement, copay proposals would hurt low-income Alabamians
Arise will seek to minimize the harm from proposals to increase Medicaid copays and impose work requirements on some Medicaid beneficiaries. Azar mentioned the possibility of increasing Medicaid copays but offered few details, other than noting that federal law would limit them to no more than 5 percent of a household’s annual income. She also said it remains unclear whether it would cost the state more to implement such a program than it would raise in return.
Azar’s discussion of work requirements was much more robust. Alabama soon will request a federal waiver to impose a work requirement for Medicaid beneficiaries in the “Parent and Other Caretaker Relative” category, Azar said. That group includes about 75,000 of the more than 1 million Alabamians with Medicaid coverage. Caretaker responsibilities, disabilities and other factors preclude many of them from working outside the home.
On an encouraging note, Azar highlighted the importance of an “exclusion list” of circumstances that would exempt many members of this group from the requirement. The scope of such a list will be a primary focus of Arise’s advocacy.
The White House has welcomed states to impose or increase work requirements and other “personal responsibility” measures for Medicaid patients, and Alabama is moving in that direction. For the vast majority of people served by Alabama Medicaid – children, seniors, and people with disabilities – the expectation of employment is not appropriate.
Most states requesting work requirements so far have expanded Medicaid to cover low-income adults without disabilities, which Alabama has not done, Azar pointed out to lawmakers Thursday. Research shows that Medicaid work requirements would limit access to the health care that many beneficiaries need to stay in the workforce while doing little to increase employment among low-income families.
ALL Kids’ future still in limbo as Congress drags feet on federal CHIP funding
Congress’ failure to provide long-term federal funding for the Children’s Health Insurance Program (CHIP) is another threat to affordable health care in Alabama. That inaction jeopardizes ALL Kids coverage for more than 85,000 Alabama children whose low- and moderate-income families earn too much to qualify for Medicaid.
ALL Kids’ future has been uncertain since long-term federal CHIP funding expired on Sept. 30, 2017. As available funding dwindled, ALL Kids in December announced that the program would end Feb. 1 without additional money. Congress approved temporary CHIP funding in December, which forestalled that move. But if the uncertainty continues, ALL Kids officials said Thursday, they will mail letters this month announcing that the program will freeze enrollment in February and terminate in March.
Under the Affordable Care Act, states have been receiving an enhanced federal match for their CHIPs, which in Alabama amounted to 100 percent federal funding. It remains unclear how Congress will handle this funding formula in a long-term funding plan. The Department of Public Health has requested an extra $53.6 million from the GF next year in case Congress requires Alabama to resume providing state matching money for ALL Kids.
For Medicaid, the loss of CHIP funding would mean that an additional 87,000 children whose Medicaid coverage is paid for by ALL Kids – but cannot legally be terminated – will move to the Medicaid budget. That would increase the state’s cost to cover those children.
Alabama was the first state to win approval for its CHIP when Congress created the program in the late 1990s. It has played a huge role in reducing the state’s rate of uninsured children from 20 percent then to just 2.4 percent today. Arise and other advocates urge Congress to honor this historic commitment by moving forward with a five-year plan for full CHIP funding without further delay.
Federal lawsuit to force more state investment in mental health care in prisons
Mental health care in Alabama prisons is “horrendously inadequate,” a federal judge ruled last summer. That led to an order for the state to solve the chronic understaffing in its prison system, particularly among corrections officers and mental health professionals. Corrections Commissioner Jeff Dunn has requested an additional $80 million in GF support over the next two years to address those issues.
Staffing in Alabama’s prison system is at only half of its expected level, Dunn told lawmakers Thursday. In some facilities, that number is as low as 30 percent, he said. Sentencing reforms have helped reduce the state’s prison overcrowding from 190 percent of designed capacity to 160 percent in recent years, but Alabama still has the nation’s “highest overcrowding percentage,” Dunn said.
State education funding up but still lower than a decade ago
Alabama’s education funding will be up again next year, but it still will be well below its inflation-adjusted level from 2008, before the Great Recession. The Education Trust Fund (ETF) funding cap for 2019 will be $6.6 billion. That’s $216 million, or 3.4 percent, higher than this year’s allocations. The Rolling Reserve Act sets the cap annually based on a moving average of the previous 15 years of ETF revenues. Gov. Kay Ivey’s proposed ETF and GF budgets include cost-of-living raises for both education employees and state employees.
By Jim Carnes, policy director, and Chris Sanders, communications director. Posted Jan. 9, 2018.
Budgets for FY 2018 fall short of real need
The Alabama Legislature last week passed 2018 state budgets that once again fall short of meeting critical needs. While lawmakers avoided a repeat of last year’s General Fund (GF) crisis, which required a special session to resolve, the new budgets highlight structural flaws that will continue to hinder public services in our state until leaders and voters approve fundamental tax reform.
Medicaid dodged a bullet this year in the GF. The barebones program that underpins our entire statewide health system squeezed by with so-called level funding – the same roughly $700 million in state funds as last year – plus the second and final $105 million installment of BP oil spill settlement funds. The lack of an increase deepens concerns about the scaled-back launch of regional care organizations (RCOs), already delayed to October 1. Level funding for other GF agencies such as Mental Health, Public Health and Corrections leaves them ill-prepared for contingencies like lawsuits and outbreaks of illness.
On the Education Trust Fund (ETF) side, the picture is only slightly better. The ETF passed by the Legislature on May 18 increased funding for K-12 education by $24 million, allowing for the hiring of about 150 new, and much-needed, teachers for grades 4-6. It also increased funding by $13.2 million for Alabama’s well-regarded, but not universally available, pre-kindergarten program.
Alabama is unusual among states in that we have two major state budgets. The Education Trust Fund (ETF) supports public schools, community colleges and universities, along with a handful of public/private entities like Tuskegee University. The ETF also funds some state agencies that provide education-related services. The General Fund budget (GF) funds the rest of state government.
Alabama is also unusual in the extent to which we “earmark” our taxes, designating the purposes for which certain taxes may be spent. Our constitution earmarks most “growth” taxes – those that increase when the economy is good – to the Education Trust Fund (ETF). Examples of growth taxes are income and sales taxes. Many taxes that don’t grow with the economy are earmarked to the GF and, as a result, the GF fails to grow as the economy and the need grows over time.
The consequences of Alabama’s flawed tax and budget system are clearly visible in the new budgets. Most glaring is the Legislature’s failure to fund the state’s Medicaid program adequately. For the past two years, infusions of $105 million from the BP oil spill settlement have helped prevent massive Medicaid cuts. But this two-year boost, agreed upon during last year’s General Fund negotiations, leaves the state facing a funding cliff for a program that insures more than one in five Alabamians – mostly children, seniors and people with disabilities.
The 2018 GF Medicaid allocation of $701.4 million is still $42.2 million short of the Governor’s already inadequate funding request. At this level, Medicaid will be able to keep providing basic services, but its ability to proceed with regional care organization (RCO) reforms that would emphasize preventive care may be at risk. Alabama would give up $747 million in promised federal funds if it fails to implement RCO reforms.
Of the other GF agencies, only trial courts and the badly stressed juvenile probation officers (JPO) program received small increases ($1.3 million for the courts and $1.8 million for JPOs). But in neither case did increased funding keep pace with the increased need.
In the ETF, higher education received a $4.6 million increase, but nearly every dollar of this went to Alabama’s National Guard scholarship program. Costs for this program have grown very rapidly over recent years, restricting the Legislature’s ability to provide increases for other purposes in higher education. The 2018 ETF also provided a $26.4 million increase to Veterans Affairs for scholarships for disabled veterans, their spouses and their children. Responding to concerns about the rapidly rising costs of these scholarship programs, the Legislature passed SB315 by Senator Gerald Dial (R-Lineville), tightening scholarship eligibility and benefits. Community colleges, which provide much of the workforce development in the state, were essentially level funded, as was the Department of Commerce’s workforce development program.
The Department of Mental Health received $3.5 million more from ETF than in 2017, but this was much less than the $10.5 needed to settle the anticipated lawsuit over mental health services for low-income children. For the first time, the stretched-thin juvenile probation officers program received a small ETF appropriation of $750,000 for truancy enforcement services.
A third way in which Alabama’s budget is unusual is that the ETF’s Rolling Reserve statute has imposed an artificial cap that restricts how much can be appropriated to education, even if additional revenue is available. Funds available above that cap can be given to K-12 schools and universities for one-time infrastructure and technology expenditures. SB307 by Senator Arthur Orr (R-Decatur), passed on May 19, makes $15 million available to universities from the Education Technology fund and $41.3 million for K-12 for technology, buses and other infrastructure needs.
Avoiding an emergency special session to fill a budget gap is a very low bar for legislative success. Even worse is Alabama’s habit of defining “level funding” as “same dollar amount.” A better practice is to calculate a “current services budget” that keeps up with inflation and population growth. Only a bold move on tax reform can stop the steady deterioration caused by inadequate budgets year after year.
GOP tax plan would slash taxes for wealthy people while laying groundwork for cuts to education, Medicaid
Arise Citizens’ Policy Project executive director Kimble Forrister issued the following statement Friday, Nov. 3, 2017, in response to the release of U.S. House Republicans’ tax proposal:
“The House Republican tax plan is an expensive new giveaway to wealthy households and big corporations at the expense of working families. It would offer little or nothing to most Alabamians, and it actually would increase taxes for many low- and middle-income folks.
“This plan would add at least $1.5 trillion to the national deficit – and to pay for it, many in Congress will try next year to cut everything from education and Medicaid to food assistance for struggling families. Those cuts would make it even tougher for hard-working Alabamians to make ends meet.
“Taking from those who have the least to give to those who have the most is no way to build a better economy, a better state or a better world. Congress should reject this tax bill and focus instead on closing corporate tax loopholes and investing in education, health care, transportation and other vital services that help struggling families get ahead across Alabama and across the country.”