First Hand
First hand information directly from your Republican offiicials.
W I N N E R
Alabama State House
District 75
Rep. Greg Wren
Biography
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Good Friday afternoon!
This week began with a House calendar of bills related to the Departments of Conservation, Human Resources, Surface Mining Commission, Public Safety, and Corrections, among others. As the legislature has now completed 20 of its 30 legislative days, legislation related to operations of dozens of state agencies, boards, and commissions will take a considerable amount of time and voting schedules. In addition, a supplemental appropriation for the remainder of the current fiscal year was passed for Medicaid, Corrections, Health Department and the Supreme Court.
As I shared in my update last Friday, the serious financial condition in the state General Fund (provides funds for all non-education functions of state government) remains deep and exhibits few signs of recovery. I expect Governor Bob Riley will be declaring 'pro ration' in the General Fund in a matter of weeks. As a reminder, when any Governor signs a pro ration declaration it immediately reduces the amount of the appropriation to the agency by the amount (%) established. Unfortunately, the amount of pro ration must be absorbed by the agencies in the remaining months of the fiscal year ending September 30th. Therefore, a 12% pro ration of the General Fund budget (or approximately $ 192,000,000) for the entire FY would have to be cut from state agencies with only six months remaining in the year---it this scenario, that would essentially equate to a 16% reduction in appropriations. Drastic cuts for sure which could impact operations in countless areas of state services. A little known factor which will aid in the pro ration going forward is that Governor Riley has reduced the quarterly allocations to each agency by 3% for the first and second quarters of FY 2010, thereby providing funds equal to 44% of their 50% allocation for the first six months. Nevertheless, if the Governor announces a 10-12% pro ration it will be a major hit to operations.
The Legislature has recessed until Tuesday, March 23rd when the House is likely to begin consideration of the Education Trust Fund budget for the FY beginning October 1, 2010. As I noted last week, the Governor's recommended budget included over $ 400,000,000 from a second federal stimulus package---that appears unlikely as the U.S. Senate and House are taking different approaches to any additional funds to the states for operations, including the largest single state budget outlay, Medicaid. In the current FY, Medicaid funding takes $308,000,000 of the $ 1.6 billion General Fund---or almost 20% of the entire non-education tax revenues. The General Fund budget will take precedence in our deliberations after the education budget.
The Senate passed the $ 1 billion road construction legislation which proposes a Constitutional Amendment to withdraw from the Alabama Trust Fund (the trust fund established in Governor Fob James' first term in 1978) an annual amount of $100 million for 10 years to be used for highway and bridge projects. The Senate passed the bill 26-10 and sent it to the House. Currently, interest income from the Alabama Trust Fund is allocated to the General Fund and the counties and municipalities' capital improvement funds. I will report on the progress of this bill as it moves into the House.
The remainder of Thursday's legislative day was spent operating off a "10 Minute Calendar" which allows for a number of bills to be considered but sets a maximum of 10 minutes debate or the bill is carried over. Bills placed on this calendar are generally non controversial and have little or no adverse impact on state finances. Most bills pertain to ministerial or technical changes to existing operations of entities.
The Legislature takes a break until March 23rd so I will not be reporting on any activity next Friday---that is probably a good thing as few are safe when the legislature is actually in session!
Have a great weekend and I look forward to being back in touch on Friday, March 26th.