Lawmakers return to changed legislative session

While the General Fund and education budgets are the stated purpose of resuming the session that must end by May 18, they’re not the only bills in play. The Alabama Senate on Monday considered local bills and formal resolutions, but also passed Gov. Kay Ivey’s bond issue proposal borrowing $1.25 billion for school construction and capital improvements.

Senators today could consider legislation giving them and their House colleagues 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, 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 be appropriate for the Legislature to have some input.”

Ivey’s office said it didn’t have a comment on the bill that she’d have to sign in order for it to become law.

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.”

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 level funds from this year many state agencies and doesn’t include a raise for state employees. Ivey’s pre-coronavirus proposal was nearly $2.5 billion.

Most House Dems stay home

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.

And at least in the House, most Democrats stayed home Monday after previously saying the health risks were too great and the passage of the General Fund and education budgets should wait until later in the year when the impact of COVID-19 on state revenues is better known.

“Now more than ever we need to follow the best practices from a health standpoint and from a budgeting stand point,” Alabama House Minority Leader Rep. Anthony Daniels, D-Huntsville, said last week.

Rep. Rod Scott, D-Fairfield, was the only House Democrat present in the State House on Monday.

“I decided to come essentially because of my constitutional responsibility to represent my constituents on the two things that we’re definitely supposed to handle as legislators and that is the education ways and means budget and the General Fund budget,” Scott told reporters.

House Speaker Mac McCutcheon, R-Monrovia, said he has been in discussions with the minority caucus and has been working to make sure their concerns are considered in budget conversations even if they are not physically present.

“When it comes to the budgets, one of my concerns has been that every district in the state needs to be part of the budgeting process and I’d like for them to have a voice in that,” McCutcheon said.

Scott said he understands the caucus’ concerns but thinks even if the Legislature were to wait till later in the year to pass the budgets, they still wouldn’t have a complete understanding of the economic impact.

“I don’t believe even if we were to come in at September we would know exactly what those final numbers are for the budget,” Scott said.

McCutcheon agrees that budgets needed to be passed sooner rather than later in order to give state agencies and schools enough planning for their individual budgets.

“Once we realized we could put a good education budget together and put a good General Fund budget together then why not move forward so these agencies can make plans for their new budgets,” McCutcheon said.

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.”

The General Fund has about 40 sources of revenue, the largest of which are the insurance company premium tax, interest on the Alabama Trust Fund and state deposits.

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 collected 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 today, then a House floor vote Thursday.

State Superintendent Eric Mackey on Monday told Alabama Daily News the department of education will be looking for increases in funding in several areas, including computer sciences, special education, English language learners and implementation of the 2019 Alabama Literacy Act, which requires additional focus and resources on reading in the early grades.

“We haven’t changed any of the deadlines for the Alabama Literacy Act and we’re excited about implementing it,” Mackey said. “We know we won’t get everything we asked for, but we hope to see some increases in those areas.”

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.”

COVID-19 liability protection bill

In March, Orr said he planned to file a bill offering businesses civil immunity from coronavirus-related lawsuits. That bill, Senate Bill 330, was expanded Monday to cover more entities and was approved in the Senate education budget committee. Added groups include health care providers, educational entities, churches, government bodies and cultural institutions.

The bill says covered entities “shall not be liable for any damages, injury, or death suffered by any person or entity as a result of, or in connection with a health emergency claim that results from any act or omission of the covered entity.”

Democrats on the committee voted against the bill, saying it didn’t protect workers who may not have been protected from COVID-19 by their employers.

“Ain’t no way those people should be getting some doggone immunity,” Sen. Rodger Smitherman, D-Birmingham, said.

Orr said the bill doesn’t prevent lawsuits if employers are willfully negligent. The bill says immunity would not apply if “the claimant proves by clear and convincing evidence that the covered entity caused the damages, injury, or death by acting with wanton, reckless, willful, or intentional misconduct.”

“This bill is extremely important for making sure cases that are brought alleging COVID-19 infections have a higher standard of proof,” Orr told Alabama Daily News recently. “We do not need thousands of tenuous lawsuits against Alabama churches, government bodies, nonprofits or other organizations.”

Two-three GOP senators are co-sponsors on the bill that now goes to the full Senate.