- Associated Press - Wednesday, April 27, 2016

MONTGOMERY, Ala. (AP) - Alabama would use settlement money from the 2010 BP oil spill to pay off state debts and pay for road projects in coastal counties, under a last-minute compromise approved Wednesday by a budget committee.

The proposal could also stave off cuts in Medicaid services by closing $55 million of a projected $85 million gap in next year’s Medicaid budget.

The House Ways and Means General Fund Committee approved the legislation, which would let the state get money up front - instead of yearly installments - by selling bonds secured by the revenue stream. Much of the money, nearly $450 million, would pay back money borrowed during past budget shortfalls. An estimated $191 million would go for road projects in coastal counties.

The committee-passed version was an attempt at a compromise between lawmakers who said the wisest thing to do with the $1 billion windfall was to pay off state debts and lawmakers from coastal areas who argued more money should go to areas that took the brunt of the damage from largest oil spill in US history.

“It does the two main things I wanted to do. It pays the debt off and it has some sort of solution this year for Medicaid, even though it’s just a partial solution,” said Committee Chairman Steve Clouse, R-Ozark.

The committee resurrected the bill just a day after negotiations faltered and Clouse pronounced the legislation dead for the session. South Alabama lawmakers filibustered bills Tuesday in the House of Representatives in protest.

“It’s a great win for Alabama it really is. It sends almost $200 million to Mobile and Baldwin counties, the area that was hit hardest. It pays off the Medicaid issue. It gets us over that hump and it pays off the debt,” said Sen. Bill Hightower, R-Mobile. Hightower was the sponsor of a Senate bill that sought more money for the coast.

The Senate-passed bill, which voters would have had to approve in a constitutional amendment, would have steered $260 million to the road projects at the coast and additional money to other parts of the state.

Medicaid officials have said they needed an additional $85 million - over what was lawmakers approved in the general fund budget - to maintain services next year. Clouse said the plan would free up an additional $55 million for Medicaid.

After a Medicaid hearing Wednesday, Medicaid commissioner Stephanie Azar said the $55 million would be “very promising” for the program, though it’s only a one-year fix.

“The $55 million is definitely a step in the right direction,” Azar said. “But there’s likely to still be cuts, because we’d still be $30 million short.”

However, the House bill faces a ticking clock with just three days remaining in his year’s legislative session. The full House of Representatives would have to approve the bill Thursday in order for it to have a chance at final passage.

“It will be a push to get it through. But it’s possible,” Clouse said.

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