MONTGOMERY, Ala. (WSFA) - It was an unforeseen legislative session as lawmakers grappled with unexpected changes to the state’s two budgets. On Monday, Gov. Kay Ivey signed the $2.38 billion general fund and the $7.2 education budgets for fiscal year 2021.
Both budgets experienced increases from the previous year, even with the pandemic’s economic effects.
Originally, lawmakers had anticipated a $400 million increase for fiscal year 2021. Now, that is down to about $91 million. But it is still considered the largest education budget in the state’s history.
Here are some of the increases in the education budget:
- $4 million for Alabama’s First Class Pre-K program; $2 million more in a supplemental appropriation
- About $1 million for a child abuse and neglect program
- 2 percent increase for higher education
Lawmakers backed out of a 3 percent teacher pay raise after seeing the drop in revenue.
The General Fund budget saw an increase of $167 million. However, this is about $167 million short of the governor’s recommendation.
Here are some of the increases in the general fund budget:
- $18 million for three mental health crisis centers
- $23 million for the Department of Corrections; an additional $18.5 million conditional appropriation
- $5 million for district attorneys in a supplemental appropriation
One of the first items on the chopping block due to the pandemic was the proposed 2 percent state employee pay raise.
“That was unfortunate from that standpoint," House General Fund Budget Chairman Rep. Steve Clouse, R-Ozark, explained. “No one was laid off they are still getting their paycheck, still getting their benefits retirement and health insurance and of course.”
Many Alabama Democrats, for instance Sen. Vivian Figures, D-Mobile, were vocally against passing the budgets at this time. They wanted to wait for better revenue projections and tax receipts.
“To see what the consumer behavior was going to be like over these next few months. Because I truly believe we haven’t hit our peak," Figures said. “I think it’s a bomb waiting to explode.”
She was concerned tax projections could impact the budgets.
“Especially with things having been relaxed as soon as they were,” Figures explained. "And even when they weren’t relaxed, people were not being diligent about keeping their distance or wearing their masks.”
All but one House Democrat boycotted the legislative session for budgetary and health reasons. House Minority Leader Rep. Anthony Daniels, D-Huntsville, said before the regular session he believed it was too early to pass the budgets.
In the past, the state has had to prorate the budgets. It resulted in layoffs and cuts to education. With the declaration of proration, state agencies financed by the budgets are required to reduce expenses through the current fiscal year.
“It’s devastating, particularly for school systems, because you can’t cut salaries and you can’t cut a tenured teacher so the only thing you can really do is layoff non-tenured teachers and cut classes, which is bad for teachers,” Clouse said.
However, he does not expect the need to prorate the general fund budget for the current fiscal year.
“I think there is a good chance we do not go into proration for the current year,” Clouse said. “We’re in pretty good shape even to go through next year without proration."
He said that is because before COVID-19, the state would have come in with about a $360 million surplus. Since the pandemic, lawmakers passed a general fund budget with only a $167 million increase.
“We went into the year with a good balance and that’s the reason why we were able to sustain this downturn,” he explained. “We knew at some point that the economy was going to hit a bump in the road. We didn’t know it was gonna be this big of a bump. But anyway, we were still prepared for about this size.”
Senate Education Budget Chairman Sen. Arthur Orr, R-Decatur, said there is about $256 million in cash available this year for schools to use. The comes from the Advancement and Technology Fund which schools usually use for maintenance and technology purposes.
“We’ve got that cushion of fiscal 2020 money that we have not spent so it’s there to provide a cushion for projected revenue shortfalls,” Orr said.
Orr said he does not anticipate proration this year because they have set up a budget stabilization fund of more than $300 million and rainy day funds.
“You’ve got hundreds and hundreds of millions of dollars available to us,” he said.