The Alabama Senate this week will consider legislation giving it and the House significant say in how the state’s nearly $1.8 billion in federal coronavirus relief money, and future funds, are spent.
The Senate General Fund budget committee last week amended an existing bill, Senate Bill 161 related to supplemental appropriations, to create a three-person panel of the governor and the Legislature’s two General Fund budget chairmen to make decisions about that money.
“This is almost equal to the General Fund budget; we believe it makes sense that we have a voice,” Sen. Greg Albritton, R-Range, told Alabama Daily News. He’s the chairman of the Senate General Fund committee and sponsor of SB161.
“In this circumstance, this came as a windfall,” Albritton said about the money. “Rather than leave this to one (executive) branch alone to handle, we believe it would appropriate for the Legislature to have some input.”
Gov. Kay Ivey’s office on Saturday said it didn’t have a comment on the bill, which she would have to sign in order for it to become law.
Lawmakers return to Montgomery today for a rapid-fire end of the 2020 legislative session that looks very different from the one they began exactly three months ago. The coronavirus has decreased state revenues, causing the Legislature to rewrite the 2021 General Fund and education budgets with less money.
Democrats and Ivey have said the budget-passing process should wait a few months, until after 2019 income taxes are due in mid-July, a deadline extended because of COVID-19.
Last week, Ivey’s office said legislative leadership told her “they will proceed at this time to only address budgets and local bills, and, as they are a separate branch of government, they have every right to do so.”
Many Democrats, meanwhile, have said they won’t be at the State House this week.
Action Starts in Senate Today
When the Senate reconvenes at 4 p.m. today, it will take a procedural step allowing a vote Tuesday on the more than $2.39 billion General Fund, as well as SB161.
Senate Bill 161 says any direct stimulus funding provided by Congress related to the coronavirus “and not directly related to an existing program or function, must be approved by a majority of the Governor, and the Chairmen of the House Ways and Means – General Fund Committee, and Senate Finance and Taxation – General Fund Committee, prior to expenditure.”
Sen. Arthur Orr, R-Decatur, voted for the bill in committee last week.
“It needs to be an executive and legislative branch agreement, and I think the governor and Legislature can do what is in the best interest of the state,” Orr said.
Last week, state Finance Director Kelly Butler said the state had already received much of the stimulus money. He noted that it cannot be used to shore up revenue shortfalls in the budgets.
The $2.38 billion General Fund now in the Senate gives many state agencies the same amount of money that they got this year, and it doesn’t include a raise for state employees. Ivey’s pre-coronavirus proposal was nearly $2.5 billion.
General Fund Still Growing
Despite COVID-19 and the shuttering of businesses in March and April, revenue in the state’s General Fund budget is still up, according to April net receipt reports.
April revenues in the General Fund were $183.8 million, up 5.6% from April 2019. Year-to-date, the General Fund is 9.7% over last year.
“In the General Fund, we still show a growth, with everything that’s happened, we still show growth,” Albritton said. “Which I think substantiates my argument that we are safe in passing the General Fund budget now.”
Education Trust Fund revenues were down nearly $345 million, or 54.4% in April compared to April 2019, but that was expected, Orr said. That fund relies heavily on income and sales taxes.
Income tax collection was down $394 million compared to last April. Alabamians have been given until July 15 to file their 2019 tax returns and payments.
“You don’t like to see it, but it was anticipated,” Orr said.
Orr said that prior to COVID-19, revenue was up about $250 million.
“We headed into this fiscal storm better than expected,” he said.
The April revenue report doesn’t give a full COVID-19 picture though because many state revenues are collect in arrears — April payments equal taxes due in March.
Alabama businesses have also been given an extension for remitting states sales taxes they collect in February, March and April. Further revenue declines are likely in the next report out June 1.
In February, Ivey had an additional $400 million in her 2021 education budget. Orr said that’s gone from what the Legislature will be working on this week, but major cuts aren’t expected. Like state employees, teachers should no longer expect a raise next year.
The education budget starts in the House this session and committee chairman Rep. Bill Poole, R-Tuscaloosa, said a committee vote is likely Tuesday, then a House floor vote Thursday.
Even in the GOP, there are some House members who think the Legislature should wait to pass budgets.
“I wish we’d have waited until at least July, when the income taxes comes in,” said Rep. Phillip Pettus, R-Greenhill said. “I think we’re dealing with a lot of unknowns.”
Rep. Lynn Greer, R-Rogersville, agreed.
“I guess I wish we’d waited a little bit,” the House General Fund committee member said. “I think we’d know more if we waited a bit.”
Health concerns and objections to passing the budgets in the next two weeks will keep at least some Democrats home.
“I plan on sticking with the caucus,” Rep. Neil Rafferty, D-Birmingham, said.
“… It’s not just a public health concern but it’s a fiscal responsibility thing as well. We don’t have the tax receipts yet. Normally at this point in the year we would have the tax receipts or at least know what next year is going to look like. And (Senate President Pro Tem) Del Marsh is saying, ‘Well, we can come back in a special session to fix the budgets.’ But that’s not how you do budgets. Why would you set a budget then if you know you’re going to have to come back in a special session which is going to cost the taxpayer more money to do?”
Rep. Mike Ball, R-Madison said he’ll be in Montgomery today.
“I’m going to take precautions when going down there, and I guess there is some risk but my whole life has been full of risk. I was in the Marine Corps and I spent a career in law enforcement so if you’ve got to do something you’ve just got to do it and suck it up.”
Ball said bare-bones budgets will pass, but could be changed later.
“Nothing is irreversible. But it would be a good idea that if we get the budgets out and then the agencies can plan and if we need to conclude then we can. And I don’t see how we don’t have multiple special sessions during the rest of the year.”
COVID-19 Liability Protection Bill
In March, Orr said he would file this session a bill offering civil immunity from coronavirus-related lawsuits.
Originally, Orr said the bill would cover businesses from individuals who try to claim they contracted the virus at the establishment. On Saturday, Orr said the bill is being expanded to include non-profits, churches, government entities and other groups.
“This bill is extremely important for making sure cases that brought alleging COVID-19 infections have a higher standard of proof,” Orr said. “We do not need thousands of tenuous lawsuits against Alabama churches, government bodies, nonprofits or other organizations.”
Orr chairs the Senate education budget committee. It is meeting this evening when the Senate adjourns.