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….

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

  1. The first year of any new Legislative term is the one most likely to see proposals for new taxes. Stay tuned!

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