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Budget sticking points remain as Legislature enters final week

By MARY SELL, Alabama Daily News

MONTGOMERY, Ala. — Alabama’s two proposed 2020 budgets are a combined $9.24 billion dollars, but their final passage depends on an agreement about $35 million for low-income children’s health insurance.

“The CHIP issue is probably the biggest right now — who is going to handle the CHIP issue,” Senate President Pro Tem Del Marsh said about funding the state’s $35 million match to the federal Children’s Health Insurance Program.

Whether the state funds it through the $2.1 billion General Fund or the $7.1 billion Education Trust Fund remains the biggest sticking point facing lawmakers as they enter what is likely the last week of the 2019 legislative session.

“It is going to be handled,” Marsh said.

Meanwhile, the Senate-passed General Fund budget still takes $20 million a year from the Alabama Department of Transportation and gives it to courts. A $35 million transfer from ALDOT to courts has been ongoing for years, but Gov. Kay Ivey proposed to stop it when she was looking for support for the gas tax and infrastructure plan lawmakers approved in March.

“I don’t want to (take money from transportation) but here again we thought we had an agreement (on CHIP),” House General Fund committee chairman Rep. Steve Clouse, R-Ozark, said.

CHIP challenge

Legislators aren’t balking at paying the state’s tab for the federal Children’s Health Insurance Program.  However, some crafters of the state’s two budgets disagree on which of them should carry the line item, and several legislative leaders said they didn’t know how the CHIP funding will be resolved.

At issue is a federal requirement that states chip in for CHIP, which in past years was 100 percent federally funded.

“We knew that the children’s insurance program was going to be a challenge,” House Speaker of Mac McCutcheon, R-Monrovia, said Thursday.

Ivey put the CHIP funding in her proposed education budget. The Senate took it out.

Senate education budget chairman Arthur Orr, R-Decatur, believes that, at least for this budget year, the General Fund should pay for CHIP.

Compared to recent years, the 2020 General Fund conversations have been fairly tame. Medicaid didn’t need a major increase in funding, most agencies are getting slight increases and state employees are getting 2 percent pay raises. The General Fund has a planned carry forward of more than $100 million. But that’s because 2021 isn’t looking as rosy and lawmakers are planning for some major cost increases — including Medicaid and CHIP.

“I appreciate the issues that are anticipated in 2021,” Orr said. “But I’ve also been around long enough to know that a lot of things can change in a year.”

The education budget saw a major increase in revenue for 2020 but there are still unmet school-funding needs. Orr said that if needed, the education budget will help with CHIP in 2021.

So, Orr’s 2020 Senate budget didn’t have CHIP funding, but neither did Clouse’s House-passed General Fund budget, leaving a hole. Funding was added when each budget switched chambers — in fact, CHIP is overfunded on paper at the moment. The General Fund currently has the entire $35 million — thanks to an amendment Orr added on the Senate floor on Wednesday. Meanwhile, the House committee-approved education budget has $17.5 million, meant to be half the CHIP funding, but technically bringing it to $52 million between the two budgets.

“Maybe we just leave all that money in CHIP for (2021) — that’s a potential option, isn’t it?” Senate General Fund budget chairman Greg Albritton, R-Atmore, said about the additional money.

He’s argued the item belongs in the education budget, but settled on a 50/50 split.

“Let there be $52 million. Fine.”

The dispute will be handled in a conference committee of select lawmakers from each chamber that will iron out the differences between the House and Senate versions of the General Fund. Another conference committee on the education budget is likely after the House takes it up this week.

“I don’t know what’s going to happen,” Albritton said.

Orr, Albritton and Clouse expect more meetings among budget leaders soon.

About 174,000 Alabama children receive health care funded through the CHIP. About 88,400 of those children are on Medicaid and the other 85,500  are enrolled in All Kids, a program for low- and middle-income families.

House education budget chairman Rep. Bill Poole, R-Tuscaloosa, said after a budget committee meeting last week that CHIP is important to the state.

“We have one of the highest rates of insurance coverage for children in the country, and that is important,” Poole said. “We struggle on some health care issues and some coverage issues and access issues but not in that area with children, so we need to fund CHIP.”

Roads and bridges transfer

A few days before she unveiled her 10-cent-a-gallon gas tax increase proposal, Ivey suggested stopping at least some of an $63 million annual transfer from transportation to the courts and law enforcement.

Some lawmakers had pointed out that it’s hard to sell a gas tax increase when money currently meant for roads and bridges is going to other state agencies.

Ivey’s budget proposal left $35 million in ALDOT that had been going to courts, leaving a hole for the General Fund to make up.

“In my (General Fund) budget, I transferred $20 million from transportation to courts,” Albritton said.

That budget passed 30-to-0 on Wednesday and went back to the House due to the amendments added in the Senate. Clouse said he doesn’t like the idea of taking transportation money, but may have to.

“(The General Fund) is looking at taking a big hit if we have to do all of CHIP funding and lost that $35 million (from transportation).”

Alabama Daily News reporter Caroline Beck contributed to this report.

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