Goat Hill Report- Sine Die

Alabama Legislature Ends Monday, May 18, 2020

Following one of the most bizarre legislative sessions in recent memory, the legislature adjourned sine die Monday. Due to the COVID-19 global pandemic, many legislative days were lost and the legislature scrambled to pass budgets and local bills while socially distancing in a state house that was closed to the public.

The legislature approved the General Fund and Education Trust Fund budgets over a week ago despite push back from the Governor’s office regarding CARES Act funding. In a tersely worded statement on May 7, Governor Ivey said she “never desired to control a single penny of this money” and ceded control to the legislature for spending the approximately $1.8 billion from the federal government. She also indicated she would not sign the General Fund budget until she received a detailed plan from the legislature on how they intended to spend the money, which must be spent by December 30, 2020.

On Thursday of last week, the Governor sent a letter to legislators detailing her intention to propose an Executive Amendment to the General Fund regarding distribution of the CARES Act funds. The amendment includes $300 million for reimbursements to state agencies, $250 million to local governments, $200 million for the delivery of healthcare, $53 million for equipment and infrastructure necessary for remote work, $300 million for expenditures related to technology/infrastructure for remote learning, and several other expenditures. According to guidance from the U.S. Treasury, all CARES Act funds must be spent on items directly related to COVID-19.

Despite the tension between the Senate and Governor’s office, the Senate and House concurred with the Executive Amendment and adjourned sine die Monday afternoon. Now, we wait on the Governor to call one or more special sessions to address issues such as prisons, broadband, supplemental appropriations, and more. The general consensus is that special sessions will be held in late summer/early fall.

Recap of School Construction Bond and Budgets

The Legislature passed a 1.25 billion dollar construction and capital expenditure bond during the last week of the session. The funding distribution is based on existing formulas and would allocate about $912 million to K-12 schools, $218 million to state colleges and universities, and $120 million to community colleges. The last bond issue for school construction was approved 12 years ago. Part of the current bond proposal would retire approximately $67 million from the last bond issue and replace it with money borrowed at a lower interest rate. The money should result in much needed school construction projects and increase demand for concrete and concrete masonry products.

ETF and General Fund Budget

The General Fund Budget was less than Gov. Ivey requested at the beginning of the session, before the coronavirus pandemic hit, but still about $168 million more than the previous year. The budget does not include the previously proposed 2% state employee pay raise, but it maintains a $94.4 million (13%) increase for Medicaid. The budget also increases state funding for the Alabama Department of Public Health by $35.5 million, or nearly 50%. Most of the money will go toward paying an increased state share of the federal Children’s Health Insurance Program (CHIP), which provides a sliding scale of health insurance to children living in households making up to 312% of the poverty level ($67,766 a year for a household of 3). Mental Health will get an increase of $26 million, and Corrections will get an increase of $21 million.

Despite a projected loss in revenue due to the coronavirus pandemic, the legislature passed a 7.2 billion dollar EFT Budget this year. Governor Ivey’s originally proposed budget included an approximate $411 million increase over last year, but the budget approved by the legislature was pared down to a $90 million increase. K-12 schools received an increase of $73 million over this year. Community colleges got an increase of $11 million. That includes a $4 million increase for programs offering dual enrollment for high school students and a $1 million increase for prison education. Universities and colleges got an overall increase of $38 million, with each four-year institution receiving at least 2% more than this year. The budget did not include a previously proposed pay raise for teachers.

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