- Associated Press - Wednesday, April 1, 2015

MONTGOMERY, Ala. (AP) - Alabama state agencies could see deep funding cuts next fiscal year unless lawmakers approve additional revenue, according to a draft General Fund budget distributed to legislators Wednesday.

“It’s very bleak. There’s no question we’ve got to have some additional funds,” said House Ways and Means General Fund Committee Chairman Steve Clouse, R-Ozark.

The chairmen of the House and Senate General Fund committees distributed a rough draft of a spending plan to the committee to show “what things might look possibly like if we don’t have any additional revenue for the General Fund,” Clouse said.

The General Fund would shrink by $240 million. General Fund appropriations to the Department of Human Resources and the Department of Mental Health would shrink by roughly a quarter.

Since some state agencies receive money from other sources, Clouse said they tried to balance the reductions so most agencies would see cuts in their total state funding - including funds from sources outside the General Fund - of 11.5 percent.

He said the funding cuts could cause significant reductions in state services.

“It will affect everybody,” Clouse said.

The cuts could go deeper, Clouse said, because the proposal banks on a shift in use taxes from the Education Trust Fund that has not been approved. Without the money, total state funding cuts would jump from 11.5 percent to 16 percent, he said.

Gov. Robert Bentley has proposed a $541 million tax increase that includes increases on tobacco taxes, ending some corporate tax loopholes and deductions, and raising the sales taxes on automobile purchases.

However, Clouse said House members have so far shown limited enthusiasm for Bentley’s proposal.

Bentley says legislators are welcome to pursue alternative ideas, but says the state can’t solve the problem without additional funds.

“I did not expect our bills to be exactly the way we sent them over. But let me say this: We still need $541 million dollars,” Bentley said Tuesday.

“I have chosen what I think are fair taxes,” Bentley said.

Clouse postponed hearings on the revenue proposals that had been expected this week. He said they want to first hear from state agencies about their needs for the upcoming fiscal year and how they would be impacted by budget cuts.

A key reason for the grim budget outlook is that a voter-approved fiscal bailout for the General Fund expires at the end of this fiscal year. Voters in 2012 approved taking $145 million a year for three years from a state oil and gas lease trust fund to avoid deep cuts in state services.

Bentley says the state also needs to repay money borrowed from a General Fund rainy day account and money owed to the federal government for Medicaid overpayments.

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