- Associated Press - Monday, January 13, 2014

MONTGOMERY, Ala. (AP) - Alabama lawmakers will enter their 2014 session Tuesday with more to spend on education programs but less for state agencies.

And no matter how the Legislature designs the education budget and General Fund budget, Legislative Fiscal Office Director Norris Green said they won’t be back to 2008 levels, which was the height of state spending before the recession hit state tax collections.

Green said the money available for education programs in the new fiscal year beginning Oct. 1 will be nearly $5.9 billion. That’s $134 million more than this year’s $5.8 billion education budget.

He said the money available for General Fund agencies in the next fiscal year will be $1.7 billion. That’s about $83 million less than this year’s nearly $1.8 billion in appropriations. The General Fund finances prisons, Medicaid, state troopers and other non-education programs. Green said the taxes flowing into the General Fund don’t grow with the economy, while those going into the education budget do grow and reflect the state’s economic turnaround.

Gov. Robert Bentley’s state finance director, Bill Newton, said the administration’s numbers are very similar to Green‘s.

Green and Newton gave their budget forecasts to legislators on Monday as they prepared for the start of the legislative session on Tuesday.

The governor will reveal his budget proposals after the session starts, but said Friday he won’t support any tax proposals. “There is not a lot of money, but we have enough to survive,” he said.

Senate budget committee Chairman Arthur Orr, R-Decatur, said he sees no sentiment in the Legislature to raise taxes in an election-year session.

Bentley said Friday he intends to propose a small cost-of-living raise for education employees for the new fiscal year. That would be on top of the 2 percent they got this year. Bentley said he expects to propose a cost-of-living raise for employees of state agencies that would be contingent upon the General Fund taking in more revenue than expected in the new fiscal year.

House budget committee Chairman Steve Clouse, R-Ozark, said the declining General Fund revenue comes at the same time the largest program in the General Fund, the Medicaid agency, is seeking $85 million more to maintain medical services for the poor and elderly.

“It’s going to be very difficult to level fund the other agencies,” he said.

But agencies are seeking more than the status quo. The state Department of Corrections, which is second to Medicaid in appropriations from the General Fund, is seeking $42 million more to give security officers a 10 percent raise and make other changes designed to reduce turnover and provide more security, Corrections Commissioner Kim Thomas said.

The Legislature has until late April to design the budgets that will take effect Oct. 1. No matter how they end up, Green said they will be smaller than 2008, when the education budget was $6.7 billion and the General Fund budget was more than $1.8 billion.

Alabama’s unemployment rate climbed above 10 percent in the Recession and is now down to 6.2 percent. But state revenue is still struggling to get back to pre-recession levels. Newton said he would describe the recovery as “modest.”



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