Budget tools under utilized
Johnny Mack Morrow
A hope and a prayer are good for some things, but when you are budgeting for important state services, you need hard numbers and a real plan. Especially in a tough budget year like the one we have.
That's what was so disappointing about the governor's 2009 General Fund budget presented this legislative session; there was never a realistic way to pay for it. His budget was likened to writing a check and hoping that money would appear in the account to cover it.
As an example, his budget was banking on the state collecting $117 million from unrealized capital gains from the Alabama Trust Fund, the $3 billion savings fund created from offshore oil and gas wells royalty payments. For state investments to pay that well, Wall Street would have to make amazing gains, something not very likely to happen with this uncertain economy.
The governor also had built into his budget a proposed $40 million tax increase on drilled oil and gas, something that is now unlikely to pass the way the governor thought it should. Forget a hope and a prayer, his budget started to look like it was cobbled together with matchsticks and glue. What's worse, the governor's budget would have most certainly led to layoffs and cuts to vital services, especially when it comes to health care. Something had to be done.
Last week the House passed what we believe to be the best budget possible under tough circumstances. It is important to remember that the General Fund pays for everything that is non-education, from senior heath care to state troopers, prisons to child protection services. This budget affects thousands of Alabamians and every community, and in these times when revenue is down, it was especially hard to make ends meet without endangering lives and ruining hard won progress.
Under the leadership of Chairman John Knight (D-Montgomery), the House passed a $1.9 billion budget that protects funding for vital programs and does so in a way that is fiscally responsible. Knight's leadership was apparent by the 97-6 vote his budget received.
The budget increased Medicaid by 31.9%, guaranteeing an additional $150.4 million. Medicaid provides health care for more than 700,000 Alabamians, often the most vulnerable, and is a critical part of keeping health care going in rural communities. The Children's Health Insurance Program will get an additional $6.3 million, allowing it to enroll 74,000 children by the end of this year and 79,000 next year. Other vital health programs cuts by the governor's budget were restored.
In order to balance the budget, Knight did some tough and innovative things. The budget reduced funding for some state agencies by 11 percent, a deep cut, but hopefully not enough to lay off people and cut into bone. It tells state agencies to start stretching budgets now by eliminating the rule that all money unspent by programs at the end of the fiscal year is returned to the General Fund. The fiscal year ends September 30.
And about those unrealized capital gains. The Knight budget says that state agencies would get revenue from state investments – up to $110 million – if it comes in. Any capital gains will be distributed in a fair way to help ease the pain of cuts. That is as fair as you can get.
There was a lot of hard work by Knight and the members of the House on this budget. There wasn't much to work with as far as revenue and governor's own budget plan. But it is the best bad budget possible, and we can all hope and pray that the economy kicks in soon, and helps us restore funding quickly.
Johnny Mack Morrow is a state representative for Franklin County. His column appears each Wednesday.