Goat Hill Report- Week ending March 10, 2023

The 2023 Regular Session of the Alabama legislature began on Tuesday, March 7, and shortly thereafter the session was suspended until Tuesday, March 21 in order to prepare for a much-rumored Special Session. Repeating the tactic she utilized four years ago to pass an increase in the state’s gas tax for transportation infrastructure, Governor Kay Ivey called the Special Session during her State of the State address on Tuesday night. Lawmakers are now tasked with passage of legislation allocating the second tranche of federal American Rescue Plan Act (ARPA) dollars, which totals over $1 billion.

Procedural Move

Governor Ivey’s proclamation calling for the Special Session specifically limited the session to the issue of ARPA funding – as well as a one-time appropriations bill to pay off an existing debt to the Alabama Trust Fund (ATF). In Alabama, only the Governor can call the legislature into special session, however the tactic of suspending the Regular Session and holding a quick Special Session requires the support of the legislature (as opposed to a Special Session that is called at a point in the year when the legislature is not in session). A Special Session allows the legislature to focus on just one set of issues without lawmakers also trying to bargain and barter for votes on other bills – and by holding it during the time period already designated for the Regular Session, the state avoids the significant cost of holding a Special Session at another time of the year when the legislature has to be convened. 

The ARPA Legislation

In response to the COVID-19 pandemic, the federal government has appropriated billions of relief funds – initially through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and then through the American Rescue Plan Act (ARPA). Governor Ivey and legislative leaders previously reached an agreement that the Governor would recommend and the legislature would give final approval to broad categories for allocation of the funds, and the Governor/executive branch would disperse the funds to specific entities via memoranda of agreement, application and grants. The current $1.06 billion “ARPA 2” spending plan that is under consideration includes many of the same spending priorities from the “ARPA 1” funds, which were allocated in a January 2022 special session. The proposed ARPA 2 spending plan, introduced as HB1 by Rep. Rex Reynolds (R-Huntsville), would allocate the federal funds as follows:

•             $339 million for healthcare costs, including: $100 million to reimburse hospitals for pandemic-related expenses; $100 million to reimburse nursing homes; and $25 million to support mental health programs and services.

•             $400 million for water and sewer infrastructure projects as prioritized by the Alabama Department of Environmental Management (ADEM).

•             $260 million for improvement and expansion of broadband network access and cybersecurity services.

•             $55 million for projects that address economic impacts of the pandemic. The legislation states that the Department of Finance may distribute the money for a wide range of community programs such as food bank assistance, housing assistance and child welfare programs.

On Thursday, the HB1 was considered in the House Ways & Means General Fund Committee. The Committee approved the bill on a voice vote after a short discussion. The bill is now poised for a vote on the House floor when the legislature returns next Tuesday. The bill will then move to the Senate for consideration. Barring unforeseen developments, the special session is expected to conclude next Thursday.

Governor Ivey’s State of State Address

On Tuesday, Gov. Kay Ivey delivered her annual State of the State address to kick off the 2023 legislative session. Although there was much anticipation about the Governor’s plans for the $1.06 billion in federal ARPA funds and her call for a special session to allocate those funds, there was considerable buzz about the Governor’s plans for the unprecedented $2.8 billion surplus in the state education budget. Ivey’s speech unveiled a plan for the budget surplus that includes one-time income tax rebates of up to $400 per taxpayer and $800 for families – an item which is expected to be hotly debated in the coming months. Ivey’s plan for the extra education dollars also included 2% pay raises for teachers, as part of her goal to raise Alabama’s starting salaries to be the highest in the Southeast by the end of her term. Ivey also proposed the establishment of the Alabama School of Healthcare Sciences, mandatory kindergarten before starting first grade, and more start-up money for charter schools. In their response to the Governor’s proposals, Democratic legislative leaders reiterated their established policy positions by countering that Ivey and the legislative majority should consider removing the state 4% grocery tax on food and expanding Medicaid to cover working poor families.

The Alabama Legislature will reconvene on Tuesday, March 14th to continue with the special session.

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