Goat Hill Report- Week Ending May 5, 2023

This week, the Alabama legislature had a three-day work week and completed Days 16, 17 and 18 of the 2023 legislative session out of the maximum 30 legislative days. The session is expected to conclude by mid-June. Details of this week’s notable action are provided below.

Education Budget and Supplemental Budget Pass the House

On Thursday, the Alabama Senate approved a record $8.8 billion state education budget for fiscal 2024 and an unprecedented $2.8 billion supplemental spending bill for the current fiscal year. Both proposals contained substantial amendments from the recommendations Gov. Kay Ivey sent to lawmakers at the beginning of the session – particularly the supplemental budget. Some of the most significant Senate changes to the supplemental budget plan include: whittling Ivey’s proposed income tax rebates from $400 for individuals and $800 for couples to a little more than $100 per filer; eliminating $200 million for a Main Street program, $31 million for an airport project in Mobile, $25 million for the Port of Mobile and $25 million for a water park complex in Montgomery near Maxwell Air Force Base; removing funding for a proposed health care-focused magnet high school in Demopolis and replacing it with a feasibility study on the proposal instead.

Increases in spending in the supplemental include: $40 million for school safety grants that schools can apply for; $30 million for a new “Distressed Institutions of Higher Education Revolving Loan Program” administered by the State Treasurer that is aimed at helping Birmingham Southern College; $200 million in projects at colleges and universities;  $180 million to create a K-12 Capital Grant Program administered by the lieutenant governor; and $500 million for a proposed Educational Opportunities Reserve Fund, an additional reserve fund to help the education budget weather any future economic storm. Senate Education Budget Chairman Arthur Orr (R-Decatur) noted that income tax receipts have declined compared to last year, which necessitated the reserve fund to be able to continue the important programs that require additional funds each year like the Numeracy Act, the Literacy Act, and the salary matrix for educators.

As for the FY2024 ETF budget, it includes a 2% raise for K-12 and community college educators. Overall, the budget provides $5.9 billion to K-12 learning, $2.4 billion to higher education and $195 million to early childhood education. The Senate kept Ivey’s proposal to add $25 million in funding for the requirements of the Alabama Numeracy Act, an initiative to strengthen math skills in elementary-aged students. The Senate also included:

•             $15 million for college and career ready grants to help schools obtain resources to help students earn one of 10 college and career readiness indicators such as passing an Advanced Placement Exam or earning a career technical credential.

•             $4.5 million for a program to recruit teachers who have a STEM major, with the Alabama Commission on Higher Education steering that effort.

•             An additional $9 million to the Department of Mental Health for institutional and community treatment and care programs bringing the total to $76.9 million for next year.

•             $8 million more for the state’s Pre-K program in the bill, bringing total funding to $182 million.

Some of the new spending was made possible because the Senate zeroed out $25 million from the Department of Economic and Community Affairs’ Rural Broadband Program, with Chairman Orr explaining that ADECA is “over capacity as far as what they can deliver, as far as laying fiber across the state.”

The proposals now move to the House where additional changes could be made.

Contentious School Choice Bills Considered

As the second half of session unfolds, a major topic of interest is the fate of school choice proposals before the Legislature. On Wednesday afternoon, the House Education Policy committee narrowly advanced HB363 by Rep. Terri Collins (R-Decatur) related to charter schools. If enacted, HB363 would modify the governance of the state’s existing Public Charter School Commission and change policies related to the appeals process for newly proposed charter schools. Advocates for Rep. Collins’ bill would also like to address equitable funding for existing charter schools – but that component is not a part of the current proposal. Most stakeholders agree that its inclusion would be very difficult to obtain this year. Sen. Will Barfoot (R-Pike Road) has introduced a companion bill to HB363 in the upper chamber which is also awaiting action and could be heard soon.

The same House committee also heard public testimony on HB295, the Parental Rights in Children’s Education (PRICE) Act, which is being sponsored in by freshman Rep. Ernie Yarbrough (R-Trinity). HB295 is a companion bill to the Senate version by Sen. Larry Stutts (R-Tuscumbia) and would provide for the establishment of an education savings account (ESA) program in the state of Alabama. Grassroots advocates have been swarming the halls of the Legislature in recent weeks in support of the bill(s), while organizations representing teachers and local school systems have cast warnings about the negative impact the PRICE Act would have on public education in the state. A fiscal note prepared by the Legislative Services Agency (LSA) projects that the cost of the program could reach almost $700 million once fully implemented – a significant hit to state’s Education Trust Fund (ETF) budget. No final vote was taken on Rep. Yarbrough’s bill, and the fate of Sen. Stutts’ bill is very much in question after it was “double-referred” for consideration in a second Senate committee next week – which has led to criticism about stalling tactics from certain legislative leaders.

With just twelve legislative days remaining in the session, the outlook for meaningful school choice legislation in Alabama is mixed at best.

Discussion Emerges About New State House

Conversation surfaced this week about a new State House for the Alabama legislature with the progress of legislation which initiates the process for a new building. SB222 by Sen. Sam Givhan (R-Huntsville) gives the legislature control over the city block directly behind the existing State House. Secretary of the Senate Pat Harris said the title on that property, which is currently a parking lot, says it’s owned by the state. The bill specifies it would be State House property. On Tuesday, the Senate unanimously approved SB222 with little discussion.  Last fall, the Alabama Legislative Council, the 20-member administrative body of the Alabama Legislature that oversees joint operations of the Alabama Legislature and owns the State House, approved a resolution directing senior legislative staff “to begin discussions with the Retirement Systems of Alabama, which has extensive experience and expertise in the provisions of building facilities for government agencies, regarding potential costs and options for new or relocated legislative facilities for review and consideration by the council.” Harris said if a new building is constructed, it would be planned and financed by the Retirement Systems of Alabama (RSA), which has constructed and owns multiple buildings in downtown Montgomery that house state agencies. The Legislature would then lease it from RSA or refinance and take over the bonds on it. RSA recently put out a request for proposals for architectural firms to provide “site investigation, analysis, planning, professional design, architectural and engineering services and other related services for new legislative offices and associated facilities.” The current State House has a growing list of needed repairs. A 2021 engineer’s report detailed nearly $52 million in improvements over the next decade to keep the 60-year-old building functional, including to the HVAC and electrical systems. Public access has also been a longstanding concern for many. Interested observers are sometimes turned away from sitting in on committee meetings due to space constraints.

The Alabama Legislature will reconvene on Tuesday, May 9, 2023.

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