2015 Legislative Update: Week 11

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On Thursday this week, the Legislature came one small step from completing its work on the Education budget. It is expected that shortly after the House reconvenes on Tuesday, May 26 the body will approve the conference committee report and send the $5.9 billion spending measure to the Governor for his review. The General Fund budget, on the other hand, remains a source of much controversy and debate. The Legislature has just six (6) meeting days remaining in the session, which must be concluded by midnight June 15.

The Education Trust Fund Budget
The Education budget made its way through the Legislature this year without much trouble. In fact, the bill passed the House on Thursday unanimously after less than one hour of debate. Representative Bill Poole (R-Tuscaloosa), the House Education Budget Chair, noted on the floor that the budget focused on putting more resources into the classrooms. As passed the measure would direct $49.6 million in additional funds to the classrooms, including $10 million in increased spending for Alabama’s Pre-K program.

The General Fund Budget
The House of Representatives has passed a General Fund budget on Tuesday, but as Representative Steve Clouse (R-Ozark), House General Fund Budget Chair, noted “I don’t think any House members are satisfied with this.” Unfortunately, when there weren’t sufficient votes to pass any increased revenue measures, the House was forced to pass a bare bones budget that would cut spending by $204 million (11%) as compared to the current fiscal year. The total budget approved by the House was $1.64 billion in State spending on non-educational functions of government. Unlike the Education Budget, the vote on the General Fund was generally split along party lines, passing by 66-36.

Several ideas for increasing revenue remain under discussion. These include the Governor’s $541 million tax package, unveiled back in February; a combination of revenue measures that would generate approximately $150 million, at one time favored by the House leadership; a gaming and lottery package sponsored by Senate Pro Tem Del Marsh (R-Anniston) estimated to raise $400 million; and a compact with the Creek Indians that would raise an initial $250 million, with possible annual payments going forward based on a percentage of revenue.

The Governor has threatened to veto the budget passed by the House. At this point, a special session during the summer seems likely if an agreement can’t be worked out in the next three weeks.

Other Legislation of Interest
Internet Sales "Tax"
On Thursday, The Senate passed Senate Bill 437, by Senator Trip Pittman (R-Daphne) which would give tax breaks to large online retailers who voluntarily collect use tax due from their Alabama customers. This would be an alternative to online sales tax collection, which would have to be passed by the Federal Government, but which has stalled in Congress. As most shoppers know, online retailers with no nexus to the State are not required to collect and remit State sales tax. What many shoppers don’t know, however, is that they are still legally required to report and pay that amount on their own. The estimated loss in revenue to the State in uncollected sales and use tax as part of online sales approaches $200 million annually. Senator Pittman’s bill will be assigned to a House Committee, likely the House Ways and Means General Fund Committee.

Alabama Alcohol Beverage Study Commission
On Wednesday, the Alabama Alcohol Beverage Study Commission, chaired by Representative Alan Harper (R-Tuscaloosa) and Senator Paul Sanford (R-Huntsville) met for the first time for organizational purposes. The Commission was created the session by Resolution, in large part in response to the dozens of bills that have been introduced in the past several years that would impact Alabama’s three-tier system of alcohol sales and regulation. The Commission will meet over the summer and fall, and will report to the Legislature prior to the 2016 on possible changes to Alabama’s alcohol laws. The Commission’s mission expressly does not include examining the possible privatization of the ABC Board’s retail operations.

Guns in Cars
On Thursday, the Senate approved Senate Bill 14, by Senator Gerald Allen (R-Tuscaloosa). The bill would allow anyone in Alabama to carry a loaded handgun in their car without a permit. The bill is now in the House, but will not receive its committee assignment until Tuesday. It is expected that it will be sent to the House Judiciary Committee, chaired by Representative Mike Jones (R-Anniston).

Marriage Licenses
Senate Bill 377, sponsored by Senator Greg Albritton (R-Bay Minette), was passed by the Senate on Tuesday and has been assigned to the House Judiciary Committee. The bill would essentially remove the State from the marriage business by removing the State’s authority to issue marriage licenses. Couples wishing to have their marriage recognized by the State would simply file a contract with the Probate Judge.

Government Oversight and Accountability
A measure that would create the Joint Legislative Committee on Government Oversight and Accountability passed the House on Thursday. House Bill 257, by Representative John Knight (D-Montgomery) is designed to provide increased oversight of government spending and operations. If it receives final passage, the Committee would consist of six (6) members from both the House and Senate.

Medicaid Long Term Care
The continued transformation of Alabama’s Medicaid program took several steps forward on Tuesday with the Senate’s passage of Senate Bill 431 by Greg Reed (R-Jasper). The bill extends the managed care approach to the delivery of care for Medicaid patients to nursing homes through the creation of Integrated Care Networks (ICN’s). The ICN’s will work in coordination with the Regional Care Organizations, created by the Legislature previously to deliver care to the Medicaid population on a capitated (as opposed to a fee for service) basis. The House version of the bill, HB585 by Representative April Weaver (R-Brierfield) has already been reported out of the House Health Committee. On Wednesday, the House Health Committee favorably reported Senator Reed’s bill, which is now in line for final passage.

Next Week
As noted above, the Legislature has met for 24 of the 30 days allowed for the Regular Session. They will reconvene on Tuesday, May 26. The House will begin at 1:00 and the Senate reassembles at 2:00.