Gov. Robert Bentley’s proposed budgets call for a two-and-a-half percent pay raise for education employees, the hiring of 100 corrections officers and about $12.5 million in additional funding for voluntary pre-kindergarten programs.
But reflecting the ongoing struggles of the General Fund, the proposed budget also keeps most state agencies level-funded and does not include a pay raise for state employees.
Despite increased insurance costs for state employees, State Finance Director Marquita Davis said a press conference Wednesday morning said there would be no layoffs in the proposed budgets.
“We’re at a place in the state where we have limited resources and services to provide to a lot of people,” Davis said. “(Bentley’s) thoughts about Alabama are never far when he’s estimating his budgets.”
The governor’s budget proposal marks the beginning of the financial conversation among lawmakers. Legislators will present their own budgets later in the session.
Bentley’s $5.8 billion Education Trust Fund request includes a $100 million repayment of money taken from the ETF’s Rainy Day Account in FY 2009 to avoid proration. The state currently owes about $423 million to the account; it must be repaid by 2015. Davis and Assistant Finance Director Bill Newton said they expect an additional $100 million to be available at the end of the 2014 fiscal year; that money, they said, would also go to the Rainy Day Fund.
House Minority Leader Craig Ford, D-Gadsden, said Tuesday night the 2.5 percent proposal was merely a “reinstatement,” noting that teachers saw their retirement contributions go up 2.5 percent in 2011. Davis did not disagree with that assessment Wednesday.
“It does makes up for what was taken away from them,” she said. “The governor’s position is this is the beginning of what he hopes is a progression to give back to them, not only what was taken, but (see if) there is an ability to add more.””
The governor included an increase of $27 million in is $1.7 billion General Fund budget proposal to pay for the hiring of corrections officers; to help absorb insurance costs and to provide security improvements to the Julia Tutweiler Prison for Women in Wetumpka. The U.S. Justice Department released a report late last month criticizing the environment of the facility, including reports of sexual abuse of inmates by corrections officers.
Other agencies will be required to absorb increased insurance costs; however, Davis said the amount of the increase would be small for most, and could be paid for through federal funds. There are no layoffs or elimination of positions in the proposal, Davis said.
The Alabama Medicaid Agency, the single largest expense for the General Fund budget, would be level-funded; lawmakers have said the agency requested anywhere from $660 million to $700 million; Davis said the initial request was $675 million.
Elsewhere, the state’s court system would see a reduction in funding from $102.8 million in the current fiscal year to $100.3 million this year. Davis said legislation that increased court costs last year was having a positive effect on the agency’s budget.
The governor’s proposed ETF budget also included a cut of $10 million to the Alabama Reading Initiative.
The General Fund currently does not include a provision to pay back $437 million borrowed from the Alabama Trust Fund last year to help shore up the budget. Rep. Jay Love, R-Montgomery, has a bill pending that, if passed, would require the state to pay back at least $5 million of the borrowed money next year, with the cumulative amount due increasing each year over the next decade, through 2026.
– posted by Brian Lyman