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2015 legislative update: Alabama House passes budget that could end Medicaid in state
Medicaid could end in Alabama under a General Fund (GF) budget that the Alabama House passed Wednesday. Medicaid would lose 23 percent of its state funding, or $156 million, next year under the plan. Lost federal matching money would increase those cuts significantly. Cuts that large could end the Medicaid program in Alabama, State Health Officer Don Williamson said Tuesday.
The House initially voted 46-45 to reject a budget amendment cutting Medicaid. But then, on a second vote, it approved the amendment 46-44. The House then passed the GF budget 53-40, sending it to the Senate. Several key senators have said they strongly oppose deep Medicaid cuts, but their solution to the GF shortfall remains unclear.
Medicaid is ‘health care infrastructure in this state’
If the Medicaid cut remains, about one in five Alabamians would lose their health coverage, including nearly half of Alabama’s children and about 60 percent of the state’s seniors in nursing homes. Those cuts likely would lead to the closure of Children’s Hospital in Birmingham, as well as dozens of other hospitals and nursing homes across the state. The results would be devastating for Alabama’s economy and quality of life.
During four hours of debate on the budget, House members decried the impact that the Medicaid cuts would have on their constituents and communities. Rep. April Weaver, R-Brierfield, said it was “shocking” to see lawmakers considering such cuts to Medicaid. “If anyone thinks that Medicaid is an entitlement, come see me,” Weaver said. “It’s the health care infrastructure in this state.”
Rep. Mike Jones, R-Andalusia, also spoke of the huge toll that a Medicaid shutdown could take on communities. Jones said the end of Medicaid could mean 600 job losses in his district and put two hospitals and several local nursing homes at risk of closing.
Without new revenue, the path forward is uncertain
The budget passed after key parts of Gov. Robert Bentley’s plan to raise new revenue to prevent massive GF cuts went nowhere in the House’s GF budget committee. The panel voted 8-7 Tuesday to reject a plan to increase the state cigarette tax by 25 cents per pack (from 42.5 cents to 67.5 cents). A bill to increase the business privilege tax on large corporations was on the agenda Tuesday but did not come up for a vote.
House and Senate committees have approved bills to transfer use tax revenues from the Education Trust Fund to the GF, but the measures face stiff opposition from many legislators. The use tax is equivalent to a sales tax on goods bought outside the state for use within Alabama. It is commonly discussed in the context of Internet or mail-order purchases.
Many lawmakers strongly oppose shifting money from education to GF services. Alabama’s education funding is still well below its 2008 level, before the Great Recession, and its K-12 cuts and higher education cuts since then are among the nation’s worst.
The GF supports vital services like health care, child care, corrections and public safety in Alabama. The budget relies on a hodgepodge of revenues, most of which grow slowly even in good economic times. That leaves the GF with a structural deficit, meaning revenue growth is not strong enough to keep pace with ordinary cost growth.
If lawmakers do not approve a substantial source of new GF revenue in the coming days, it will be impossible for them to pass a budget that avoids devastating cuts to Medicaid or other vital services during this special session. Alabama’s 2016 budget year begins Oct. 1, 2015, and the prospect of another special session before then looms ever larger by the day.
By Carol Gundlach, policy analyst, and Chris Sanders, communications director. Posted Aug. 5, 2015.
Medicaid cuts threaten Alabama's entire health care system
ACPP policy director Jim Carnes issued the following statement Wednesday, Aug. 5, 2015, in response to the Alabama House’s passage of a General Fund budget that would slash state Medicaid funding by 23 percent:
“A budget is more than a balance sheet. It’s a statement of our values. And the Alabama House’s decision today to gut Medicaid sent a stark message to a million Alabamians: Your health coverage doesn’t matter.
“The House voted to balance the General Fund budget on the backs of the most vulnerable Alabamians: children, seniors, and people with disabilities. The plan would set our state’s health system and economy on a dangerous course. Dozens of hospitals could be forced to shut their doors, and every Alabama community would see its quality of life decline.
“This isn’t a game. People’s health and livelihoods are at stake. We urge the Senate and Governor Bentley to block this reckless maneuver. It’s time to restore good sense to the budget process and make Alabama stronger.”
2015 legislative update: Medicaid could end under Alabama House committee's budget
Medicaid could end in Alabama under devastating cuts in a proposed General Fund (GF) budget that the Alabama House’s GF budget committee approved Tuesday, State Health Officer Don Williamson said. About one in five Alabamians would lose their health coverage, including nearly half of Alabama’s children and about 60 percent of the state’s seniors in nursing homes.
Medicaid would lose 23 percent of its state funding, or $156 million, next year under the budget that the committee approved Tuesday. Lost federal matching money would increase the loss significantly.
Those cuts likely would lead to the closure of Children’s Hospital in Birmingham, as well as dozens of other hospitals and nursing homes across the state. “If Alabama chooses not to have a Medicaid program, you will see an impact on the health care system that you can only begin to imagine,” Williamson said Tuesday.
Cigarette tax increase, other revenue bills fail to gain traction
The vote came after key parts of Gov. Robert Bentley’s plan to raise new revenue to prevent massive GF cuts went nowhere during a tense day in the House’s GF budget committee. The panel voted 8-7 Tuesday to reject a plan to increase the state cigarette tax by 25 cents per pack (from 42.5 cents to 67.5 cents). A bill to increase the business privilege tax on large corporations was on the agenda but did not come up for a vote.
The committee recessed for several hours after the cigarette tax vote. When it returned late Tuesday afternoon, a frustrated Rep. Steve Clouse, R-Ozark, who chairs the committee, offered an amendment to concentrate GF budget cuts in the Medicaid program. Committee members approved the change 10-4 and then OK’d the budget on a voice vote. The GF budget now awaits action in the full House.
Democratic committee members strongly condemned the proposed Medicaid cuts. “To take and use Medicaid as a pawn, I think is totally unfair,” said Rep. John Knight, D-Montgomery. “Other agencies should be on the chopping block.”
Knight urged legislators to be honest with the public about the need for new GF revenue to support vital services like health care, child care and public safety. The Legislative Black Caucus will not vote for tax increases without adequate long-term GF revenues, Knight told the Montgomery Advertiser.
Clouse criticized several Democratic lawmakers’ votes against the cigarette tax bill, telling the Advertiser that Democrats had supported a tobacco tax increase during the regular session. “I came with a fair budget that level-funded Medicaid,” he said. Clouse said he does not support deep Medicaid cuts but said Alabama needs to have a debate about the program’s future.
Lawmakers OK transfer of education revenues to shore up General Fund
Both the House and Senate’s GF budget committees approved bills Tuesday to transfer use tax revenues from the Education Trust Fund (ETF) to the GF. The use tax is equivalent to a sales tax on goods bought outside the state for use within Alabama. It is commonly discussed in the context of Internet or mail-order purchases.
The House committee voted to transfer both use tax revenues and some funding obligations to the GF, resulting in a net loss of $50 million to education and a net GF gain of the same amount. The Senate bill would transfer use tax revenues but not the accompanying obligations. That would reduce education revenue (and increase GF revenue) by more than $200 million.
Alabama’s education funding is still well below pre-recession levels. The state’s per-pupil K-12 spending in 2015 was 18 percent lower than in 2008, the second worst decline in the nation, according to the Center on Budget and Policy Priorities (CBPP). Alabama’s per-student higher education cuts from 2008 to 2016 are also the nation’s second worst, the CBPP found.
Bentley has proposed to “backfill” the ETF’s revenue loss by ending the state income tax deduction for FICA taxes paid to support Social Security and Medicare. But this bill has not yet been set for a committee vote, and many press reports suggest it is unlikely to pass.
Bill to ‘un-earmark’ mental health, DHR money advances in House committee
The House’s GF budget committee also approved a bill Tuesday to “un-earmark” revenues dedicated to five state agencies and shift the revenues into the GF. Nearly 90 percent of the transfers under HB 46, sponsored by Rep. Allen Farley, R-McCalla, would come from mental health and the Department of Human Resources (DHR). Other services affected would be public health, veterans’ affairs and forestry.
Bentley’s budget plan would provide additional GF money to help the agencies cover the un-earmarked amounts. But neither the current Legislature nor future ones would be obligated to do so under HB 46. Advocates for children and for people with mental illness are deeply concerned about this idea.
By Carol Gundlach, policy analyst, and Chris Sanders, communications director. Posted Aug. 4, 2015.
Lawmakers should focus on a General Fund budget that will make Alabama stronger
ACPP policy director Jim Carnes issued the following statement Friday, July 10, 2015, in response to Gov. Robert Bentley’s call for a special session on the General Fund budget:
“Alabama is at a crossroads. The path we choose now could define our state for a generation. As lawmakers consider the General Fund budget in the coming weeks, we urge them to choose a path that will make Alabama stronger.
“Alabamians need a budget that protects children, seniors and our most vulnerable neighbors. Important services like Medicaid, mental health care and public safety make Alabama a better place to live and work. But these services have been cut to the bone in recent years, and even deeper cuts are not the way to repair the damage. It’s time to stop the cuts and invest in a stronger Alabama.”
New revenue for a stronger Alabama
What makes a state strong? We likely all could agree on a few answers: healthy people, a dependable workforce, a stable government, safe streets and vibrant communities. But without new revenue to address a huge General Fund budget shortfall, Alabama will face devastating cuts to education, health care, public safety and other vital services that make shared prosperity possible.
If the Legislature can’t agree on new revenue to avoid these cuts, Alabamians would see thousands of lost jobs, a sharp decline in our state’s quality of life and a weaker future for years to come. Here’s a snapshot of what Alabama would look like if the cuts in a no-new-revenue General Fund budget become reality.
ACA ruling a huge win for affordable health care in Alabama
ACPP policy director Jim Carnes issued the following statement Thursday, June 25, 2015, in response to the U.S. Supreme Court ruling upholding Affordable Care Act tax credits in Alabama and other states:
“The Supreme Court’s decision is a huge victory for millions of Americans, including more than 170,000 Alabamians who have gained health coverage through the federal Marketplace. This ruling protects tax credits that make coverage more affordable for 132,000 Alabamians, and it protects all Americans from the soaring insurance costs that would have resulted from a decision the other way.
“With today’s ruling, health coverage for thousands of Alabama families is safe and sound. Now it’s time for Alabama to take the next step and close the Medicaid coverage gap for thousands more. Health reform is the law of the land, and our leaders should work to make sure it succeeds in providing access to affordable coverage for all Alabamians.”