Reed: Budgets easier to fund in 2018

By ED HOWELL, Daily Mountain Eagle
Posted 1/9/18

Senate Majority Leader Greg Reed, R-Jasper, said the state’s economic growth means legislators will have an easier time funding state budgets this year, although lingering questions over federal healthcare funding remain as a source of concern.

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Reed: Budgets easier to fund in 2018

Posted

Senate Majority Leader Greg Reed, R-Jasper, said the state’s economic growth means legislators will have an easier time funding state budgets this year, although lingering questions over federal healthcare funding remain as a source of concern.

Reed gave his viewpoints Friday in light of the 2018 Regular Session of the Alabama Legislature which starts tonight, highlighted by Gov. Kay Ivey’s televised State of the State Address at 6:30 p.m. on APT. Other channels or web sites are expected to carry it.

"Governor Ivey's agenda for the 2018 legislative session will include issues that directly affect Alabamians including, among other things; supporting Alabama's education system from Pre-K to the work force, ensuring the needs of our state's rural citizens are being met and providing proper care and facilities to those incarcerated in Alabama," said Daniel Sparkman, Ivey's press secretary, according to WSFA-TV. "Governor Ivey's goal for this legislative session is to invest in our future, provide for our people and spend taxpayer dollars responsibly."

Reed noted the improvement with the long-suffering state budgets, in relation to the economy.

“We’ve been in a situation really from the time I’ve been in public office to where as a result of the Great Recession, we’ve had some rally difficult times. We have made some very difficult decisions.

There has been a good bit of reduction in state government. I think we have right at 5,000 less employees now in state government compared to what we had in 2009,” he said, noting that tax revenues had been down in recent years.

However, he said “good fiscal responsibility” was laid out by the Legislature, and the economy has picked up. That is now being reflected in receipts for the state.

“As a result, we’re going to wind up for the first time in as long a time as many can remember with a small surplus in both the General Fund and the Education Budget,” he said.

“We took in more money than we spent,” Reed said. In terms of fiscal responsibility, he also noted that the majority of funds owed back to the Alabama Trust Fund has been paid back with the BP money. Money borrowed from education has all been paid back, he said.

“The vast majority of any debt that the state had has been repaid. We’re in a place to where we have a surplus in both budgets,” he said. “So the question now is, how can we continue to be fiscally responsible with the resources that we now have available to us and what are the No. 1 priorities in both the Education and General Fund budgets” that could use the increased funding.

Reed reviewed what he feels will be the much-discussed priorities based on his conversations with Ivey and other legislative leaders, starting with a 2017 ruling from U.S. District Judge Myron Thompson that mental health care in state prisons was “horrendously inadequate.” The state has proposed roughly doubling the number of mental health providers to address the situation.

“That is going to have a significant price tag,” he said. “I don’t know what that price tag is going to be. But it is going to be in the tens of millions to address what the federal requirements are.” 

According to al.com, the state Department of Corrections is asking for a $30 million supplement for the current year and a $50 million increase in the next year, with most of that to go for medical and mental health care for prisoners. Much of the increase would go for the cost of a contract with a new provider, Wexford Health Sources, which is currently being negotiated, while other would go to the cost of facilities and personnel.

More workers will need to be hired or contracted, and modifications will be needed on facilities to accommodate the need for appropriate mental health treatment, Reed said.

“Another issue you are going to hear about is a continued focus on public safety,” Reed said, first concerning prison guards in the Department of Corrections and second concerning new state troopers.

Reed said the past year, money was moved around to allow 30 new state troopers to be added to the highways. The Alabama Law Enforcement Agency said 47 new sworn personnel were added last year, with 36 on the job and 11 more to be certified in May.

Reed said a goal of adding another 25 to 30 more troopers will be set as a goal for the coming year.

“That is going to be a good use, in my opinion, of state resources,” he said.

He said he has spent much time on reforming the Medicaid system. According to al.com, Medicaid Commissioner Stephanie Azar told legislators Thursday that the Medicaid program, the biggest expense in the General Fund, will be carrying forward $53 million into the next year, offsetting the need for any increase in state funding for 2019.

However, Reed said a “ton of uncertainty at the federal level” remains concerning what will happen next with the Affordable Care Act and how the Medicaid systems will operate in the states. That will leave state officials, including legislators, to react to those decisions.

Moreover, it is uncertain if the federal government will continue to fully fund the Children’s Health Insurance Program (CHIP), also known as ALL Kids in Alabama. Reed said if CHIP came back to the states to fund, “that would wipe out by itself any surpluses that we had.” However, he doesn’t think Congress or President Trump will want to make changes until they have more of a handle on the overall healthcare issue.” 

“I am optimistic that over the next couple of years, as healthcare continues to be debated, that you’re going to wind up to where there will be a continued focus on CHIP and funding for that program, and allow it to be a part of what other reforms we have to deal with based on federal decisions,” Reed said.

However, he said as the economy has improved, the number of people on the state’s Medicaid rolls have reduced some.

He also said a number of reform measures he has continued to be involved with “in regards to economy of scale and efficiencies within the Medicaid agencies, and there have been some money in Alabama as a result of some of those reforms.” 

He also said that based on the economy, the federal government has changed the state’s match rate. While it has been 68 percent federal and 32 percent for the state, the division is now 70 percent paid by the federal government and 30 percent paid by the state, which offers additional savings to the state.

All that together is leading the state’s Medicaid agency to request $30 million less in the coming budget year than they requested last year, he said.

Reed said a “robust discussion” will likely be held on salary increases for state employees and education staff. “I think you’re going to see the governor support it. I am certainly supportive of that, because the No. 1 asset we have in the State of Alabama are the employees of state government,” he said, noting raises have not been given for a while. He said the question will be in finding a level of funding that can be maintained.