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Lawmakers get Ivey’s budgets; one ‘heartburn’ issue noted

By WILL WHATLEY and MARY SELL, Alabama Daily News

MONTGOMERY, Ala. – Gov. Kay Ivey introduced her education and General Fund budgets to state lawmakers this week, with popular provisions like a teacher pay raise, increases for cash-strapped agencies and more money to expand the state’s First Class pre-kindergarten program.

State House budget leaders said Thursday they didn’t see major changes coming to Ivey’s proposed $2.1 billion General Fund budget and $7.1 billion education budget this week, with one possible exception.

Ivey’s proposed education budget — the largest in the state’s history — allocates about $35 million for Children’s Health Insurance Program (CHIP), which has historically been paid for with General Fund dollars.

“We believe there is plenty of justification that healthy children are better learners,” state Finance Director Kelly Butler said this week about funding the health care program through the education budget, which already has about $11 million in public health expenses in it.

About 178,000 Alabama children receive health care funded through the federal Children’s Health Insurance Program (CHIP). Some of those children are on Medicaid and others are enrolled in All Kids, a program for low- and middle-income families.

Leaders on the Senate education budget committee, including chairman Arthur Orr, R-Decatur, and Sen. Tim Melson, R-Florence, have said CHIP should be a General Fund expense.

“(The program) is worth funding, but it should not come from the Education Trust Fund,” Melson said Thursday. “Especially since it will balloon over time.”

Ivey last month said putting the CHIP funding in the education budget was part of an effort to end transferring money from the Alabama Department of Transportation every year to support other General Fund agencies. In gathering support for her 10-cent-a-gallon gas tax increase to fund road and bridge improvements,  some questioned why money was being diverted from ALDOT each year. That gas tax and infrastructure plan was approved by lawmakers earlier this month.

Orr on Thursday said he appreciated Ivey’s work to stop the $63-million-a-year transfer from ALDOT, but he has “real heartburn” about putting CHIP in the education budget. Especially, he said, when the General Fund is expected to have more than $100 million to carryover to the 2021 budget year.

Orr’s committee will start work on the education budget next month.

“The initial feedback from colleagues I’ve talked to, they do not want to take the money from the ETF,” he said.

Speaker of the House Mac McCutcheon, R-Monrovia, said Thursday there are discussions about splitting the CHIP funding between the state’s two budgets.

“CHIP is very vital to our state and we have to find a way to fund it,” he said. “There are discussions about trying to split some of that cost off, but I would emphasize they are only discussions.”

Other proposals in Ivey’s education budget includes:

  • About $161 million for a 4 percent raise for K-12 and community college educators;
  • Increases of between 5.5 percent and 6 percent for universities;
  • An additional $25 million for the voluntary pre-K program to help expand it to additional sites and children;
  • A $2 million increase for K-12 English as a Second Language programs. Butler said more money was requested by the department of education because of demand in the school systems.

House education budget committee chairman Bill Poole, R-Tuscaloosa, said he Ivey gave lawmakers a good starting point.

“We’ll certainly solicit the opinions of all members but specifically committee members about priorities and I expect there will be some changes But at the same time I think Gov. Ivey has put out a responsible and reasonable budget that I think substantially aligns with what I anticipate being the priorities of the House members,” Poole said.

Both 2020 budgets are an increase from the current year.

House General Fund budget committee chairman Steve Clouse, R-Ozark, said he hopes to get that budget out of committee soon after lawmakers return from next week’s spring break.

“I don’t really foresee any big differences,” Clouse said. “There’s going to be a few little things that will be tweaked around the edges but as far as the big items with Medicaid and prisons and public health, I don’t really see any changes coming really.”

That budget proposal includes:

  • A 2 percent pay increase for state employees that will cost $12 million;
  • An $5.7 million increase for the Alabama Law Enforcement Agency to hire and outfit 50 new troopers;
  • An $8 million increase for the Alabama Department of Mental Health to help it meet new federal regulations.
  • A $40 million increase for the Alabama Department of Corrections. Most of that will be used to hire about 500 new correctional officers for the understaffed prisons and increase salaries for current employees.

When asked by Sen. Cam Ward, R-Alabaster, what the department could do with its budget if it was unable to meet the goal of 500 new officers, Butler said that any money left would be rolled over into the department’s budget in fiscal year 2021.

“I believe (ADOC) will also ask for an additional $40 million for the next few years in a row,” Ward said. Its goal is to hire 2,000 more officers by 2021, he said. At more than $517 million, ADOC’s General Fund allocation is second only to Medicaid.

That agency, which provides health care to more than 1 million low-income Alabamians, has requested less money in 2020, about $703 million.

Sen. Linda Coleman Madison, D-Birmingham, questioned why the Alabama Medicaid Agency did not request more money in the budget, which only continues “bare bones” services and does not “contemplate the opportunity for Medicaid expansion.” Butler said the agency was funded at the level requested by Medicaid Commissioner Stephanie Azar.

Ivey proposes carrying over an available $105 million from the 2020 budget to 2021, when an increase of about $70 million is expected for the Children’s Health Insurance Program and increases for Medicaid are expected.

Alabama Daily News reporter Caroline Beck contributed to this report.

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