With the state of Alabama sitting on an education budget surplus of more than $2.7 billion, as well as around $1 billion in unspent federal dollars from the American Rescue Plan Act, Alabama Senate President Pro Tem Greg Reed said allocating those funds would be his top priority for this upcoming session.
“I would say the No. 1 priority is going to be budgets, that’s our No. 1 job,” Reed told Alabama Daily News.
“The great news is Alabama’s economy — for a lot of reasons that I think are certainly as a result of a very conservative approach to budgeting — has been very strong. Alabama has been super pro-business, and so as a result, even through the pandemic, our economy has been strong.”
As ARPA funds carry certain spending restrictions generally geared toward infrastructure and health care, Reed said he and his colleagues would most likely target broadband and water and sewer infrastructure and hospitals with those federal dollars.
“I think on priorities for our ARPA (will be) water/sewer, broadband, medical topics (such as) hospitals, nursing homes (and) issues that are going to be important in individual communities related to things that are approved that supports families (and) senior adults, those kinds of things.”
In 2010, the state of Alabama was facing a $65 million budget shortfall with only $17 million available in the state’s rainy day fund. In order to pass a balanced budget, then-governor Bob Riley was forced to make significant cuts to the state’s education and General Fund budgets.
Today, Reed explained, the state’s finances are in much better shape.
“We have filled up rainy day funds, we have filled up rolling reserve funds, we’ve created additional safe savings accounts, (and) we’ve paid off some bonds,” Reed said.
“So that even makes the opportunity for what we’re doing with the surplus resources be that much more significant.”
Reed said that even though the state’s finances have significantly improved when compared to just over a decade ago, it was imperative that state leaders maintain a fiscally conservative approach when allocating funds – an approach, Reed argued, that was responsible for improving the state’s finances in the first place.
Regarding the general fund budget, Reed said funding additional mental health resources was another high priority for himself and his colleagues.
“As far as priorities for the general fund budget, I think (funding) mental health (resources will be a priority). There’s (also) going to be an additional request for Medicaid funding just because some things are changing post-Covid in Medicaid in particular.”
Since the pandemic began, federal authorities have provided additional Medicaid funding, but prohibited state-level agencies from removing recipients from their rolls. Roughly 84 million people nationwide are covered by the government-sponsored program, which has grown by 20 million people since January 2020, just before the COVID-19 pandemic hit.
The federal government is set to phase out additional Medicaid funding to states by the end of 2023, requiring states such as Alabama to reassess its own Medicaid spending.
Alabama is one of 12 states that did not expand Medicaid following the passage of the Affordable Care Act in 2010, which, among other things, would have allotted significant federal dollars to help states expand the program. As such, Alabama routinely ranks as among the worst states in health care access for low-income residents, ranking 45th out of 51 in a 2021 study by Health Care Insider.
Continuing on the topic of funding mental health resources, Reed said that a majority of his colleagues have identified the state’s mental health crisis as a major concern.
“ I’ve been very supportive of the crisis center program that we’ve begun to roll out when we started that as a pilot program,” Reed said.
“We’ve added more money into that, and I think that’s important. I think we hear not only from schools but jails and everything in between, that the mental health issues that we’re dealing with statewide and nationwide are of significance. I think continuing to have resources go to the Department of Mental Health and a multitude of different areas is a topic that’s important to the Legislature.”
Regarding education, Reed said that teacher compensation was another potential inclusion in the 2024 budget.
“I think on the education side, we need to continue to be watching how we compensate educators,” Reed said. “I think being able to think about that if we’ve got a surplus is certainly something important.”
Gov. Kay Ivey must submit her proposed budget to the state Legislature on the second day of their regular session.