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Montgomery Advertiser: Alabama Legislature preview

Tuesday, February 07, 2017

By Brian Lyman, Montgomery Advertiser

The state’s finances and ethics laws got pushed to the brink in 2015 and 2016. On the surface, the legislative session that starts Tuesday will – for Alabama politics – start in calm waters.

The always-troubled $1.8 billion General Fund – with flat revenues not expected to grow more than $25 million this year — will get a $105 million shot from the state’s share of BP’s settlement over the 2010 Gulf oil spill. If that doesn’t stop the bleeding in the budget, it will serve as a transfusion to keep state services going, at least through 2018.

“Unlike last year, where I was singing the blues, and unlike next year, when I’m going to be singing the blues, this year we can take a little deep breath because of the one-time money we get from BP,” said Rep. Steve Clouse, R-Ozark, the chairman of the House Ways and Means General Fund committee.

The $6.3 billion education budget should also see an increase of $90 million.  That will likely prevent major funding boosts, but it could be enough to pay for major expenses, such as insurance. If that’s not an ambitious goal, it’s one that, at least, doesn’t involve cutting services.

Not yet, anyway. Elected officials and advocacy groups are keeping one eye on the state and another on Washington. With Alabama dependent on federal funding to provide basic services to citizens, any changes to existing formulas could upend major state services and hurt those in the private sector. Nowhere is that concern greater than in Medicaid, a critical component of the state’s health care sector.

Possible changes to Medicaid’s funding formula — such as turning it into a block grant program — could squeeze the amount of money Alabama receives for the program. Alabama’s Medicaid program covers more than 20 percent of the state population. The federal government picks up more than two-thirds of its cost.

“The news that comes out of Washington, while it may be responsible at the federal level, isn’t necessarily going to make our job easier,” said Sen. Trip Pittman, R-Montrose, the chairman of the Senate Finance and Taxation General Fund committee.

That could have dire consequences for the state’s hospitals and pediatric practices. Both count on Medicaid to keep their doors open.

“I don’t have a clue what might happen in Washington,” said Rep. John Knight, D-Montgomery. “Some of the things that happen in Washington could put more burden on the states — on those individuals who say they want states’ rights.”

There will be other challenges ahead for lawmakers. A federal court last month found that the Legislature improperly used race in 12 legislative districts. That will require redistricting before next year’s elections. Gov. Robert Bentley will also revive a major prison construction proposal that should face a long debate in the Legislature. Ethics issues hover over the Legislature, including a House probe into Bentley’s possible impeachment.

Amid all that, the 2018 session is already casting a shadow. Budget chairs expect major trouble for the General Fund after the BP money runs out this year, and no one can say where the money to fix it might come from — a brewing storm within the hurricane’s eye.

“One of my responsibilities and Sen. Pittman’s is going to be trying to curb the enthusiasm,” Clouse said. “It looks like we’re OK this year, because of $105 million from BP going to Medicaid. You take that away, and you’re looking at a crisis in Medicaid.”

Medicaid

Even with the BP funding, Medicaid will need more money. The agency last week said it would seek a $44 million increase in General Fund money, to cover medical inflation and the costs of implementing regional care organizations (RCOs), aimed at moving the program from a fee-for-serve model to one that tries to make payments based on outcomes.

Whatever happens on the state level, state officials want to secure as much of federal money as possible. Bentley last month sent a letter to Congress urging them to maintain the current federal match for Alabama Medicaid dollars – the federal government sends more than $2 to the state for every dollar Alabama spends – and urging them to maintain funding for the Children’s Health Insurance Program (CHIP).

The governor expressed caution about block granting the program, a concern shared by many in the health care sector.

“We’re kind of like everybody in that we’re in a serious hold-and-wait pattern, but we don’t have a lot of time to wait,” said Danne Howard, vice president and chief policy officer for the Alabama Hospital Association.

More than half of Medicaid recipients are children, which makes the issue particularly acute for pediatricians.

“Any reductions in payment for that care is going to have a huge, rippling effect in pediatric practices,” said Linda Lee, executive director of the Alabama Chapter of the American Academy of Pediatrics. “Because so many children are covered by Medicaid, and the Alabama Medicaid Agency is a minimal program compared to other states — it’s just imperative that those services be covered.”

For now, legislators are moving ahead to provide the program what money it can.

“We are waiting to see what the federal government’s going to do and how they’re going to address the issue,” House Speaker Mac McCutcheon, R-Monrovia, said. “But the reality of the situation is we still have to address Medicaid for the health care of these people who need it, especially the children.”

Prisons

The good news for the state’s prison system is that the number of prisoners has dropped by over 2,300 in the last five years, a 9.1 percent decrease. The bad news is the state’s overcrowding is still among the worst in the nation, and the number of correctional officers to guard those prisoners is falling as well.

Alabama Department of Corrections commissioner Jeff Dunn has indicated he will seek a pay raise for corrections officers, the lowest-paid law enforcement officers in the state, in the hopes of attracting new officers and retaining experienced ones. Dunn and Bentley will also revive last year’s $800 million prison construction proposal.

As outlined last year, the state would borrow $800 million to build four new prisons, including three new men’s facilities and a new women’s prison to replace Julia Tutwiler Prison for Women in Wetumpka. The state settled a lawsuit with the U.S. Department of Justice in 2015 over sexual assault and harassment in the prison. Most but not all existing facilities would shut down or convert to different uses.

Dunn, Bentley and other supporters argue the new prisons would be safer for inmates and officers; have more space for rehabilitative programs and combine duplicated services in a way that would allow the department to pay off the bond through savings.

But the cost; the proposed method of bidding — in which a single firm would bid to design the prisons and coordinate the construction — and concerns about the impact of prison closings on rural districts helped kill a stripped-down version of the proposal on the final day of the session last year. Dunn spent the offseason speaking with legislators and compiling a lengthy report on the conditions of each of the state’s prisons.

“For those opposed to it, they have legitimate concerns,” said Sen. Cam Ward, R-Alabaster, one of the bill’s sponsors. “I get their points. Let’s bear down and meet their concerns.”

McCutcheon and Senate President Pro Tem Del Marsh, R-Anniston, say they will try to get the proposal out to a vote early. But both said they expect major changes to the proposal.

“What that final product looks like I think is going to be far different than what comes from across the street,” Marsh said in his office last week.

Rep. Reed Ingram, R-Pike Road, said that he would be a no vote on the bill, owing to lingering questions about cost.

“That’s the biggest question, how is it going to be funded,” he said. “There’s no way it will be funded out of attrition.”

Other legislators worry about what closings would mean for their communities. Ward and DOC officials said older prisons might become work centers, regional jails or treatment centers. But, Ward said, those facilities appeared to be past their functional life as prisons.

“If it was built in the 1950s or 60s, you can’t adequately wire the building to let the guard patrol it,” he said.

Education

The expected $90 million growth in the Education Trust Fund may be enough to meet needs in 2018, and no more.

“That’s not really a lot of money for K-12,” said Eric Mackey, the executive director of the School Superintendents of Alabama. “We know health care costs are going to eat up a good bit of it.”

The money will not be enough to provide teacher pay raises or achieve the Department of Education’s goal of returning K-12 funding to its all-time height in 2008. The department’s budget request calls for an increase of $137 million in the state’s foundation program — one and a half times the expected money available — and a $4 million increase in the Alabama Reading Initiative, which State Schools Superintendent Michael Sentance wants to rebuild.

Republicans also plan to seek an increase in the state’s pre-kindergarten program — a long-term goal for the party — and OCE funding, which gives school districts funding to address daily costs.

“It really allows schools to have the flexibility with those dollars to address operational obligations,” said House Ways and Means Education chairman Bill Poole, R-Tuscaloosa.

Redistricting

Political cartography dragged the Legislature through many late nights in 2012. The resulting map dragged legislators through long days in federal court.

Black lawmakers sued to block the maps a few months after their approval, saying the new districts packed black voters — who tend to vote Democratic — into the same districts, making it harder for them to build coalitions with like-minded white voters and muting their voices in the legislative process. A three-judge federal panel on Jan. 20 declared 12 districts unconstitutional, and strongly hinted to lawmakers last month that they should fix the maps.

The process can be grueling, but in the early stages both legislative leaders and lawmakers in districts affected are optimistic. All express hopes that they can resolve the issue within the regular session and without the need for Gov. Bentley to call a special session.

“The entire Legislature should take this very seriously,” said Knight, whose Montgomery district was one of the 12 struck down by the court. “It’s an order that came down from the highest court in the nation. Present a model plan or agree on a model plan of the constitutionality of the districts. That means being fair across the board, and following the guidelines on which to draw the lines.”

Republicans used a strict standard for maintaining minority populations in the districts in 2012, keeping them no lower or higher than 1 percent of their ideal population. GOP officials said they used the standard to address population losses in the majority-minority districts, but Marsh suggested they may try to use a looser figure this year.

“We want to solve the problems in these 12 areas without creating 20 more,” he said. “The plus or minus deviation could help us with that.”

Ethics

The Alabama House of Representatives spent a good part of the 2016 session debating the merits of impeaching Bentley over allegations about his relationship with a political adviser, as the presiding officer of the chamber awaiting trial on felony ethics charges.

House Speaker Mike Hubbard’s conviction last June brought new leadership to the Alabama House but also worried business leaders. Among other charges, a jury convicted Hubbard — who maintains his innocence and has appealed his convictions — of soliciting loans from those who hire lobbyists, known as principals. Some of the people Hubbard spoke to served on boards of directors of organizations and had no direct say over the hiring of lobbyists. Attorney General Luther Strange, whose office prosecuted Hubbard, met some of those groups to discuss changes to the law last fall.

Strange announced last month that his office had developed a draft ethics bill to address some of the concerns. McCutcheon and Marsh last week said Strange’s draft was still under review.

The house Judiciary Committee suspended its impeachment investigation of Bentley in November at the request of Strange, who said it might intersect with some of the work his office was pursuing. Rep. Jones, R-Andalusia, the chairman of the House Judiciary Committee, said last month that the investigation lay there.

“Whenever the attorney general has reached the point when we’re able to resume, we will resume,” he said.

If the committee did resume during the session and returned a recommendation of impeachment that the House approved, Marsh said the Senate would be ready to conduct a trial.