Does the Right Hand know what the Left Hand is Doing?

As the financial problems of the state mount, the Legislature and Governor hold out hope that a solution will literally fall in their lap (or better yet, wash up on shore).

As we drill (sorry, I promise I will quit with the puns) into these problems, you will discover that there is an irony here that is quite disturbing.

Before we get into that however, lets first list some of the things the Governor and Legislature would spend money on if they had it:

The General Fund expenditure wish list includes raises for state employees (each 1% equals approximately $20 million), payback the ATF General Fund Rainy Day Fund ($161 million), payback the ATF for GF operating budget ($437 million), build new prisons ($600 million+), expand Medicaid (bottomless pit), hire more troopers, and hire more prison guards, etc.

The Education Fund expenditures wish list includes reducing classroom size, pay raises for teachers (each 1% equals $34 million), more funding for pre-Kindergarten program, more funding for AMSTI, expand technology to the classroom, etc.

So with no desire to increase taxes, how are we going to pay for all this?

Ask our leaders and they will tell you that they hold out hope that financial salvation is on its way in the form of the BP oil spill settlement.

The BP settlement is extremely complex.  In an effort to make it as simplistic as possible, imagine that there are three “pots of money” involved. 

The first pot is the civil penalties that must be paid to the federal government.  Congress, through the July 6, 2012 Restore Act, set up the Gulf Coast Restoration Trust Fund for the coastal states that were affected.  80% of the civil penalties will be deposited in the trust fund and invested.  Alabama, as one of these states impacted, is due its portion.  These funds, however, are to be used only in the coastal region for cleanup, restoration, etc.  It is from this “pot” that the Governor is planning to build the hotel/resort at the Gulf State Park.

The second pot is the economic damages incurred by individuals on a case by case basis for economic damages caused to them by the economy being influenced negatively by the oil spill.  This fund has received much media attention of late as BP has now returned to court asking that the settlement that they had previously agreed to be set aside.  Not only did they agree to it, but they were responsible for drafting it.  These funds go to individuals and companies, not to the state.

The third pot is the “honey hole” for the Governor and Legislators.  This money will come as either a settlement or as a result of a trial between the State and BP over lost tax revenues the state’s economy incurred due to the spill.  If it comes to a trial, Alabama will be the first state (of five) to take their shot.  The amount at issue is being estimated to be potentially in excess of $1 billion.  That’s right…$1 billion.

AFA had the temerity to suggest (and actually introduced legislation) that the money from the third pot be put into the Alabama Trust Fund and protected and utilized for the benefit of our citizens in perpetuity.  Not so fast….we were told by legislators and the Governor that our idea was not a good one and that it was dead on arrival.

But I digress…we can discuss the merits of what to do with the money at a later date (and I assure you, we will).  The purpose of this article is to point out the troubling irony associated with this pot of gold.

You see…who is responsible for getting us this gold?   The Attorney General is the state’s lawyer and he has been diligently working to see that the state gets its fair share.  He is actually the lead attorney for all the states negotiating with BP.  Because of Luther Strange’s professional and competent management, Alabama is situated better than any other state regarding these negotiations.

Wait a second….something doesn’t make sense here.  Careful evaluation of the proposed FY15 General Fund appropriations bill shows that the Office of the Attorney General has been “zeroed out.”

 If the State’s plan for funding its wish list is being controlled by the success of the Attorney General, wouldn’t we want to make sure his office is fully funded in order to have the resources to do the best job possible?

There seems to be a conflict between the constitutional office of Attorney General and other state leaders.  These state leaders believe that the Attorney General has the capability to “self fund” the office through “future settlements.”  What happens if these prospective settlements fail to materialize?  Good question…and one that we will continue to look into.

Stay tuned…I don’t think this drama is near from over…..

The Rolling Reserve Act- Part III- Leave it Alone

This article is the third of a three part series evaluating the Rolling Reserve Act and its importance to the fiscally responsible management of the state’s education appropriation process…..

As mentioned in Parts I & II (see: www.alaforestrygovtaffairs.org/the-rolling-reserve-act-part-i-whats-the-big-deal/ and www.alaforestrygovtaffairs.org/the-rolling-reserve-act-part-ii-its-working-just-fine/), the Rolling Reserve Act is an integral part of the state’s budgeting process for education appropriations.  There is, however, a move afoot to tinker with the Act.  Let’s take a closer look at that….

LFO is estimating that FY15 receipts will exceed the Rolling Reserve Act cap by $157 million.  The ETF Rainy Day fund housed in the Alabama Trust Fund will be fully repaid by its constitutionally mandated time period (fingers crossed!).  So legislators and special interests are now beginning to question whether it’s necessary to continue the restraints imposed by the Rolling Reserve Act.  They argue that $157 million could be spent in numerous ways (teacher pay raise) that are better than putting it away for protection against future proration.

We would argue that the Act is working just fine and should be left alone.  The ATF Rainy Day Fund protects just 6.5% of the total ETF expenditures.  A fully funded Education Trust Fund Stabilization Fund will protect another 20%.  Combining these two funds results in a proration protection plan equal to 26.5%.  That is sound fiscal management.

Once the Education Trust Fund Stabilization Fund is fully funded, the Rolling Reserve Act surpluses then go toward building a trust fund to be used for capital projects for schools.  That is sound fiscal management.  And, the beginnings of (heaven forbid!) a responsible approach to long range planning.

This three part series has focused on the Rolling Reserve Act and its impact toward repaying the ETF Rainy Day Fund.  Keep in mind however that in 2009, the legislature also drained the ATF General Fund Rainy Day Fund of $181 million.  There is no Rolling Reserve planning tool for the General Fund appropriations process and guess what?  Not one thin dime has been repaid to replenish the amount borrowed, which by constitutional mandate, must occur by 2020.

One mistake made in the process of developing the Rolling Reserve Act is that the Act is set forth in the Alabama Code as opposed to having been done as a constitutional amendment.  As the hysteria builds to try to work around the Act, efforts will increase to repeal it.  If it were embodied in the Constitution, it would be much harder to make it go away. 

Speaking of the hysteria…there are also continual efforts to “work around” the Act’s cap requirements.  The cap for FY15 is set at $5,899,655,878.  At this point the FY15 ETF appropriations bill has passed the Senate and the House and now is likely headed a conference committee.  The House version provides spending at $5,931,782,878 (exceeds cap by $32 million) and the Senate version has spending at $5,915,987,426 (exceeds cap by $16 million).  How is this possible?

Good question…and one that seems to trouble a lot of folks.  When asked, most legislators have no good answer and frankly seem surprised to learn of this.  It appears that revenues are “diverted” and spent before they are placed in the Education Trust Fund. 

Where do they get the authority to do this?  Another good question.  It appears that it is a conflicts of law question.  On the one hand we have one statute, the Rolling Reserve Act, that sets forth the cap by a formula and requires any revenues in excess of the cap to be used for proration protection.  On the other hand, there is a second statute, the Education Trust Fund appropriation bill, passed annually, that appears to just ignore the Rolling Reserve Act statute.  The legislative leadership does appear to be “trying” to comply with the cap, but when they don’t make it, they don’t let its requirements impede their appropriations.

Again, if the Rolling Reserve Act was a constitutional amendment, rather than just a statute, then the ETF appropriation bill could not trump its requirements. 

So if we are going to change or tinker with anything in conjunction with the Rolling Reserve Act, lets pass it again, but this time as a constitutional amendment.

Forestry Commission Merger Bill Dies in Senate- Lots of Black Smoke on the Horizon

Yesterday was the last legislative day for bills to be considered in the same house from which they originate.  SB411, seeking to merge the Alabama Forestry Commission into a newly named Department of Agriculture, Forestry and Industries, was not brought for consideration and thus died for this session.

The bill was originally scheduled for consideration on Wednesday, but a late amendment proposed by the Alabama Farmers Federation (ALFA) caused some disagreement among the members and as a result the bill’s sponsor, Arthur Orr (R- Decatur) decided against moving the bill forward.

The Alfa amendment proposed changing the methodology of selecting the State Forester.  Their amendment would allow Alfa, the Forestry Association and the Alabama Forestry Commissioners to each make a recommendation for the State Forester position and the Governor and Commissioner of Agriculture, Forestry & Industries would then pick one from those three recommendations.

AFA stated its opposition to the amendment as we wanted the recommendation to continue to come from the Alabama Forestry Commissioners.

Though the bill died for this session, we fully expect it to come again next session.

On a related topic, the Alabama Senate Finance & Taxation General Fund Committee passed its version of the General Fund appropriations yesterday and, as expected, it didn’t include any good news for state agencies.  The Senate version of the FY15 appropriations bill set forth expenditures at $1.839 billion, an increase of 1.83% over last year. 

The Alabama Forestry Commission was allocated $8.76 million, a 4% decrease from last year.  The bill also included $685 million for Medicaid (11.38% increase) and $394 million for Corrections (a ½% decrease).

Assuming that appropriated expenditures equal revenues, then actual revenues anticipated are approximately $1.693 billion (remember that $145.7 million is being used as revenue from the third and final installment of the funds “borrowed” from the Alabama Trust Fund).

The “new” legislature (elections are being held this year) will meet next spring to work on the FY16 appropriations.  Here is where things really get nasty.  Looking forward, if you grow the actual FY15 projected GF revenues at 2%, then the legislators will have approximately $1.727 billion to work with.  Assuming that Medicaid and Corrections are level funded (wishful thinking), this would leave $648 million for all other agencies.  Comparing apples to apples, in the FY15 appropriations bill, those same agencies were funded at $760 million.

This leads to a scary bottom line that indicates these other agencies will see at least a 15% funding cut in the FY16 GF appropriations bill.  For purposes of the Alabama Forestry Commission, this would result in a reduction of $1.31 million in FY16 as compared to FY15.

And frankly, that’s the best case scenario.

A more plausible scenario is that Medicaid continues its 10-15% growth appetite and/or the U.S. Department of Justice requires the state to address prison overcrowding.  This could result in a draconian 25-50% reduction in funding available for other General Fund agencies.

The absolute worst case scenario, the “nuclear option”, is that certain state agencies get “zeroed out”.  Before you dismiss this as outside the realm of possibility, consider the Alabama Department of Conservation and Natural Resources (DCNR), the Alabama Department of Environmental Management (ADEM) and the Office of the Attorney General.

As many of you know, DCNR has been operating for years with no funding from the General Fund.  More recently, ADEM has been operating very near zero funding for the last several years.  Finally, the Office of Attorney General was completely zeroed out in the Senate passed GF appropriation this week.  In all three of these cases, the logic is that the agencies have the capacity to “stand alone” and use resources available internally to fund their ongoing operations.

Stay tuned….

Legislative Session Weekly Wrap Up

The legislature worked three legislative days this week leaving three days remaining.  They will take off next week for Spring Break and will resume on Tuesday, April 1st. (Seems appropriate?).

In this past week, the Education Trust Fund appropriation bill passed the House of Representatives in a much different form than that passed by the Senate.  A conference committee has convened and discussions to resolve their differences are ongoing with an expectation that the final vote will occur upon their return.  Neither the House nor the Senate version of the bill contains a pay raise for teachers and the Governor has said that he would veto the bill if that is the case.  So this will be interesting to watch unfold.

The Senate still must take up the General Fund appropriation bill that has already passed the House.  Senate action is anticipated on the day they return.

Consolidation efforts have by and large been put off until next year.  The only remaining bill that has any potential for passage is HB350, sponsored by Representative Ed Henry (R- Hartselle), which moves the Office of Examiners of Public Accounts (the state’s audit function) to the State Auditor’s Office.  The bill has passed the House and is available for consideration on the Senate floor.

A bill expanding counties and municipalities right for limited home rule has passed the Senate and is in the House.  We are watching its progress very carefully.

Hmmm….AEA Alive & Kickin in the House Republican Caucus?

Yesterday, the Alabama House of Representatives voted on the $5.9 billion appropriations bill for the Education Trust Fund.  The vote was extremely close, 51-47 in favor of passage, especially when compared to other controversial measures debated before the House.  Granted, there are always contentious items within the appropriations process, including exceeding the Rolling Reserve Cap, funding for the PACT program and other items.  But this year most of the rancor was over whether to give teachers a pay raise and/or increasing funding for PEEHIP, the education employees health insurance.

The House Republican caucus is composed of 67 members, 50 of which voted for passage.  15 Republicans joined 32 Democrats to vote against the bill.  Of the two remaining Republicans, one passed and one is marked as absent.  The sole Independent, Richard Laird (I- Roanoke) voted for passage.

So what was the rationale behind the Republicans that voted against the bill?

Hunting Bills Moving Through Legislature

Several bills affecting hunting are moving through the legislative process.  SB240, sponsored by Senator Roger Bedford (D- Russellville), makes it illegal to use drones to interfere with hunting and fishing.  It has passed the Senate and is awaiting consideration on the House floor.

HB322, sponsored by Representative Mark Tuggle (R- Alex City) and Senator Scott Beason (R- Gardendale), titled the Sports Person’s Bill of Rights, sets forth a constitutional amendment designed to clarify that the people of Alabama have the right to hunt, fish, and harvest wildlife using “traditional” methods, subject to reasonable regulations that promote conservation and management of fish and wildlife and preserve the future of hunting and fishing.  Hunting and fishing shall be the preferred means of managing and controlling wildlife.  The bill has passed the House and is in the Senate’s Agriculture & Forestry Committee today.

HB534, sponsored by Representative Steve Hurst (R- Munford), would require the Department of Conservation to promulgate a rule restoring the fall turkey season.  This bill is in the House Agriculture & Forestry Committee today and still must go to the Senate.

On a side note, SB354, sponsored by Senator Scott Beason (R- Gardendale) allowing persons to carry a pistol in their vehicles without a concealed pistol permit has run into significant opposition on the Senate floor.  The bill was debated last Thursday for several hours without Beason being able to obtain the 21 votes needed to close the debate.  It is unknown at this time as to whether this bill will be brought up again on the Senate floor.

Legislative Day 26- Appropriations Status

Today marks the 26th legislative day with both houses convening this afternoon, leaving 5 legislative days in which to finish up a good bit of work.  The most pressing items are the two major appropriations bills providing FY15 funding for the ETF and the GF.  The ETF appropriation bill passed the House yesterday and now returns to the Senate for concurrence or to be assigned to a conference committee.  There are major differences between the House and Senate versions so a conference committee is anticipated.  The GF appropriation bill is in committee in the Senate today, having already passed the House.

The Rolling Reserve Act- Part II- It’s Working Just Fine

This article is the second of a three part series evaluating the Rolling Reserve Act and its importance to the fiscally responsible management of the state’s education appropriation process…..

As mentioned in Part I (see:  www.alaforestrygovtaffairs.org/the-rolling-reserve-act-part-i-whats-the-big-deal/), the Rolling Reserve Act is an integral part of the state’s budgeting process for education appropriations.  Let’s now take a look at what has happened since its inception.

Taking a look back….

The ETF appropriations for FY2009 exceeded actual revenues and thus the Governor had to declare proration.  The ETF Rainy Day Account was drawn down completely with a transfer of $437.4 million.  This transfer triggered a constitutionally mandated repayment date of June 2015 (3/4 of the way through the FY15 budget cycle).

Prior to FY14 (starting October 1, 2013), the state had repaid $274.8 million, leaving a balance of $162.6 million.  Where did the repaid amount come from?

First, FY12 (the first budget cycle for the new leadership) resulted in actual revenues exceeding appropriations which allowed for the transfer of $14.4 million.  Second, in FY13 (the first budget cycle with the Rolling Reserve requirements) there was a total repayment of $260.4 million which came as a result of the Rolling Reserve Act where actual revenues ($5,703,241,423) exceeded the capped expenditure level ($5,442,852,452) resulting in the surplus being transferred for repayment.

So good, we have paid back $274.8 million, but we still owe the balance of $162.6 million which has to be paid by June 2015 (more on the significance of that date in a second).  So where will the rest come from?

For FY14 (concluding September 30, 2014), the cap was set at $6,014,101,843.  As the FY14 appropriations bill was being developed, the Legislative Fiscal Office (LFO) estimated that revenues would be $5,730,396,233, which is less than the cap.  The estimated revenues figure is what the legislature passed as an appropriated amount, not the cap. Because actual revenues were estimated to be below the cap, the Rolling Reserve Act did not come into play.  As deliberations began on the FY15 appropriation bill, LFO modified its previous FY14 estimates and now estimates that actual receipts will be $5,831,500,000 which would leave a surplus of $101,103,767 over what was appropriated.  The FY14 appropriations bill includes an absolute appropriation of $35 million for repayment.  Combining the surplus and absolute appropriation would be $136,103,767.  Right? 

Nope.  Hold the phone…since this is all occurring below the cap, the Rolling Reserve Act doesn’t kick in and so this surplus is not required to go to payback the Rainy Day Fund and now is available for conditional appropriations that were in the FY14 appropriation bill. 

Taking a look at those conditionals, there were two joint first priority conditionals that total $66 million ($65 for Rainy Day payback and $1 million for the Insurance Information and Research Center).  So reducing the surplus by that amount leaves approximately $36 million for second priority conditionals.  Looking again at the FY14 appropriation bill, there are 19 joint second priority conditionals totaling $31.8 million, which would then leave approximately $4.2 million in surplus available for the third priority conditional.  The only third priority conditional is a $150 million repayment of the Rainy Day Fund.

So in reality, what we can be sure of from the FY14 fiscal year, as far as paying back the Rainy Day Fund, is the $35 million appropriation.  If LFO’s revised estimates are indeed correct, then another $65 million (the first priority conditional) and possibly another $4.2 million (the third priority conditional) could materialize.

Assuming that LFO is close to being correct (actual indications at this point in time indicate the LFO might be overestimating the FY14 revenues), it would appear that there might be $100 million in payback from FY14’s budget cycle ($35 million absolute and $65 million conditional).  This would then leave $62 million that needs to be paid back as an absolute appropriation in the FY15 appropriation bill. 

There is currently a heated debate between the Governor’s office, the Senate and the House of Representatives as to what the Rainy Day Fund repayment appropriation should be in the FY15 appropriations bill.  The Governor and the House makes the assumption that LFO’s revised FY14 revenue estimates are lower than what will actually materialize.  They project that the FY14 repayment will be $135 million and thus they only include $27 million, as an absolute appropriation, in the recommendation for the FY15 appropriations bill. 

The Senate, however, has taken a more conservative and fiscally responsible route and includes $62 million, fearing that the economic projections made by LFO will not materialize for FY14.

An important date to keep in mind for FY15 is June, 2015.  This is the date that the constitution mandates that the ETF Rainy Day Fund be fully replenished.  The surplus available in FY15 due to the Rolling Reserve Act will not be available for repayment until the close of the fiscal year, therefore will not be available in June.  Thus, whatever amount chosen for repayment, the payment must occur as an absolute appropriation in the FY15 appropriation bill.

Regardless, the clear conclusion to be drawn from all this analysis is that the Rolling Reserve Act is working as intended.  Because of its requirements, arguably over $260 million was available for repayment that might not have occurred if the Legislature were to have had flexibility to spend it as it desired (can you say, teacher pay raise in an election year?).

Taking a look forward….

LFO has estimated for FY15 that revenues will exceed the cap by $157 million.  Assuming this is indeed the case, this will be money that will be transferred into the new Education Trust Fund Stabilization Fund (because the Rainy Day Account would have been fully repaid), which is limited to 20% of the prior year’s ETF appropriation (20% of this year’s ETF would be an amount of $1,146,079,247) which would make it about 12% full.  If that occurs, the Rolling Reserve Act will have created funds available in excess of $600 million for preparation for proration in the future.  If the Rolling Reserve Act creates similar surpluses over the next 8-10 years, the ETF Stabilization Fund will be completely full and that combined with the ETF Rainy Day fund would mean the state would have over $1.5 billion in reserves for the ETF to avoid proration in the event of another economic downturn.

Now that’s what I call being fiscally responsible and planning for the future.

Thank you Republican Legislative Leadership and thank you Rolling Reserve Act.

 

 

The Rolling Reserve Act- Part I- What’s the Big Deal?

This article is the first of a three part series evaluating the Rolling Reserve Act and its importance to the fiscally responsible management of the state’s education appropriation process…..

The three most fiscally responsible measures adopted by Alabama’s leaders over the course of the state’s history are the balanced budget requirement imbedded in our 1901 constitution, the formation in 1982 of the Alabama Trust Fund as a repository for oil and gas revenues derived from offshore royalties and lease payments, and the Rolling Reserve Act.

In Alabama, the state spends approximately $24 billion annually (that includes federal dollars that are directed through state agencies).  Two major appropriations bills address approximately $8 billion of these expenditures.  The Education Trust Fund (ETF) appropriations bill for FY2015 (begins October 1, 2014 and concludes September 30, 2015) is anticipated to be $5,899,655,878.  Revenue to offset these expenditures principally comes from the state’s income tax (60.8% in FY13), sales tax (27.2% in FY13) and utility taxes (6.8% in FY13).  Revenues for FY2015 are expected to be $6,057,000,000, leaving approximately $157 million in excess over expected expenditures. 

So why wouldn’t the ETF appropriations bill spend all of the available revenues?

The reason is the Rolling Reserve Act.  This Act was passed in the 2011 Regular Legislative Session.  Note the date.  2011 was the first regular legislative session after the change in control of the leadership of the legislature.  The elections in 2010 resulted in the Republican Party taking control of both the Senate and House of Representatives for the first time in 136 years.

Before I get into the Rolling Reserve Act, a discussion on proration is needed.

Proration is a nasty word in state governance.  Proration occurs when the Legislature passes an appropriations bill that exceeds actual revenues.  When it becomes apparent that this will occur, the Governor “prorates” the remaining appropriations for the rest of the fiscal year in order to balance with the actual revenues that come in.  Thus, every state department affected has to cut its spending by a certain percentage.  Each department affected has to cut the same amount.  In some instances, the ETF Appropriations and the GF Appropriations are both “prorated” but at different percentages because they are affected by different appropriation bills.  Interestingly, the ETF proration, when it occurs, does not affect teacher’s salaries, as they have annual contracts.  The other state personnel funded through the GF proration do not have this same protection.  So, when proration occurs in the ETF, the shortfall must be addressed through non-salary expenses.  When proration occurs in the GF, it’s not uncommon to see employees furloughed in order to meet the shortfall.

Prior to the change in leadership, the ETF had experienced proration in each of the previous four years.  Since the change, there has not been a need for proration.

Over time, the Legislature has adopted several methods to try to lessen the impact of proration.  In a special session in 2008, the legislature passed Amendment 803 to Alabama’s Constitution that set up the Education Trust Fund Rainy Day Account and the General Fund Rainy Day Account within the Alabama Trust Fund.  For the Education Trust Fund Rainy Day Account the amount is limited to 6.5% of the prior year ETF appropriations and must be paid back in six years.  For the General Fund Rainy Day Account the amount is limited to 10% of the prior year GF appropriations and must be paid back in ten years.

In 2009, to address proration, the legislature drained both rainy day accounts in the amounts of $437 million for the ETF and $181 million for the GF.  More on the dynamics of why that occurred later, but regardless, it happened and the new legislative leadership was left holding the responsibility of figuring a way to repay the funds.

Back to the Rolling Reserve Act…so the new leadership comes into office with the desire to stop proration and the need to pay for past indiscretions.  Their solution was to take one small bite at a time.  The first bite was to address the ETF.  They developed legislation that would require the state to set a “cap” for spending based on a prior 15 year “rolling” average of actual revenue income to the ETF (the aforementioned taxes).  This cap would be the maximum amount the legislature could appropriate to the ETF regardless of whether “anticipated” revenues indicated the potential to spend more.

If actual revenues did indeed surpass the cap, the surplus would be used to first repay the borrowed $437 million from the ETF Rainy Day Account, second to fund an additional anti-proration fund called the Education Trust Fund Stabilization Fund (limited to 20% of the current fiscal year’s ETF appropriation) and then finally into Education Trust Fund Capital Fund, which would be used to construct buildings for public education.

The first year that the “cap” went into effect was FY2013 (beginning October 1, 2012 and concluding September 30, 2013).  So, at this point, the Rolling Reserve Act has affected one complete fiscal year (FY13) and part of another (FY14, concludes September 30, 2014).  The legislature is now working on fiscal year appropriations for FY2015.

Since taking over leadership, the Republican majority has addressed three budget cycles (FY12, FY13 and FY14) and to date, no proration has occurred.  That’s a big deal.  The Rolling Reserve Act is a key component to the big deal.

 

Legislative Session Weekly Wrapup

Six legislative days remain in the 2014 Regular Session of the Alabama Legislature and much work remains to be done.  This past week saw indications that movement is beginning to occur.

The principal responsibility of the legislature each year is to pass appropriations bills for the various state agencies to operate in the next fiscal year (FY15, which begins October 1, 2014 and concludes September 30, 2015).  By constitutional mandate, the state’s spending must not exceed revenues.

The two main appropriation bills fund the Education Trust Fund (ETF) and the General Fund (GF).  The ETF appropriations bill has passed the Senate and has moved out of committee in the House.  There are significant differences between the Senate and House versions that will ultimately need to be addressed (more on that next week).  the House is expected to take up the ETF on the floor early next week.  The GF bill has passed the House and awaits action in Senate’s Finance & Taxation General Fund Committee.

Efforts to streamline state agencies are beginning to move, albeit slowly.  The bill restructuring the Legislature’s operations has passed the Senate and awaits consideration on the floor of the House after passing out of the House Internal Affairs Committee yesterday.  The bill transferring the Alabama Forestry Commission to the newly named Department of Agriculture, Forestry & Industries passed Senate committee and awaits action on the Senate floor which could potentially occur early next week.  It still must go to the House.  The bill moving the Examiners of Public Accounts to the State Auditor has passed the House and now will be addressed in Senate committee.  The bill combining the Pardons & Paroles Board into the Department of Corrections has passed out of committee in the Senate and is set for floor consideration next week.  It must still pass the House.  A bill abolishing the Alabama Beverage Control Board was introduced in the Senate yesterday.  Likelihood of it moving forward in this legislative session is slim (analysis of this will be provided at a later date).

The legislature is expected to work three days next week and plans to take it’s spring break the following week.