2016 legislative update: Medicaid cuts loom, payday reform falls just short as Alabama Legislature ends 2016 regular session
The Alabama Legislature’s 2016 regular session, which ended Wednesday, was more notable in many ways for what didn’t happen than for what did.
Lawmakers did not agree on a revenue solution to prevent devastating Medicaid cuts that would reduce health care access for hundreds of thousands of children, seniors, and people with disabilities in Alabama. Despite enormous public support, payday lending reform didn’t cross the finish line in the House. State education funding still hasn’t returned to where it was in 2008. And proposals to expand affordable housing and reform Alabama’s death penalty system gained little traction at the State House.
Still, progress was real on several of Arise’s priority issues. With minutes left in the session, lawmakers passed a bill to expedite voting rights restoration for thousands of Alabamians. Payday lending reform made it further in the Legislature than it ever has before, with a reform bill sailing through the Senate 28-1. And the new #IamMedicaid campaign continues to remind lawmakers and the public of the real human faces behind Alabama’s Medicaid debate.
Here is a recap of what happened on each of Arise’s issue priorities this session – and the action that may yet lie ahead on them this year.
State budgets: Deep Medicaid cuts in Alabama moved much closer to reality Tuesday when a bill that would have averted most of them died in a Senate committee. HB 569 would have used BP oil spill settlement money to help free up $70 million to go toward Medicaid’s $85 million shortfall, but the bill died when the Senate’s General Fund (GF) budget committee adjourned without voting on it. Committee chairman Sen. Trip Pittman, R-Montrose, ended the meeting after his colleagues voted 9-6 to side with a proposed substitute by Sen. Arthur Orr, R-Decatur. Orr’s plan would have reduced the amount of road money in the bill and distributed those funds to all areas of Alabama instead of just coastal areas. The substitute also would have increased the share of settlement money used for debt repayment, fully repaying the Alabama Trust Fund (which receives state revenue from oil and gas drilling) for money that the state borrowed to avoid massive GF cuts in recent years.
The Legislature may return later this year for a special session to address the Medicaid shortfall, but Gov. Robert Bentley said “everybody’s got to rest a little bit” before he makes that decision. Even though the regular session is over, lawmakers are expected to continue a series of weekly hearings on Medicaid’s funding structure and importance to the state’s health care system. Meanwhile, Alabama moves ever closer to a future when deep Medicaid payment cuts could prompt many pediatricians to leave the state and could imperil many of the rural hospitals and doctor’s offices upon which Medicaid patients and privately insured Alabamians alike depend. The cuts could end Medicaid coverage for outpatient dialysis and adult prescriptions and eyeglasses as well. Also on the chopping block could be the Program of All-Inclusive Care for the Elderly (PACE) in Mobile, which saves the state money by allowing participating seniors to live independently in their own homes instead of being sent to a nursing home.
The Education Trust Fund (ETF) budget drew many fewer headlines than the GF this year, but state education funding is still about 15 percent below its pre-recession level of 2008, adjusted for inflation. (Even the 2008 funding level was insufficient to meet many of Alabama’s educational needs.) The 2017 ETF budget includes a 33 percent boost in pre-K funding and provides a 4 percent pay raise for most K-12 teachers. Universities and two-year colleges also received slight increases.
Payday lending reform: Alabama’s payday reform movement enjoyed an unprecedented breakthrough in the Legislature this year when a reform bill passed 28-1 in the Senate, but the plan came up just short of final passage. SB 91, sponsored by Orr, was on the House calendar Tuesday but never reached the floor for a vote after a long day of filibusters. Orr’s bill would have given Alabama payday borrowers a more realistic path out of debt by slashing interest rates, allowing installment payments and giving borrowers at least six months to repay. (Current state law allows payday loans to carry interest rates of up to 456 percent a year.) Arise will work with Alabama Appleseed and other advocates to build on this year’s momentum and growing public support as the reform movement continues into 2017.
Voting rights: Alabama will speed up the voting rights restoration process for thousands of people if Bentley signs a bill that the Legislature passed Wednesday. With just minutes left in the session, the House passed SB 186, sponsored by Sen. Linda Coleman-Madison, D-Birmingham, and sent it to the governor. The clock struck midnight just before the Senate could consider another voting rights bill – HB 268, sponsored by Rep. Mike Jones, R-Andalusia – which would have clarified what counts as a “crime of moral turpitude” that bars someone from voting in Alabama. Other proposals to expand voting access, including multi-day voting and same-day voter registration, died in committee.
Death penalty reform: A bill to establish a state Innocence Inquiry Commission for death penalty cases – SB 237, sponsored by Sen. Dick Brewbaker, R-Montgomery – cleared the Senate this year but died Tuesday when the House Judiciary Committee didn’t vote on it. Other proposed reforms to Alabama’s death penalty system, including a three-year moratorium on executions, went nowhere. The U.S. Supreme Court on Monday ordered further review of Alabama’s capital sentencing scheme, which allows judges to override a jury’s sentencing recommendation. A state circuit judge in March declared Alabama’s judicial override system unconstitutional, but the state has appealed that ruling.
Tax reform: Alabama’s tax system will remain upside down for another year, as the Legislature declined to consider measures to end the state grocery tax or close corporate tax loopholes. A bill to increase the state property tax won Senate committee approval but went no further. A proposed 75-cent cigarette tax increase won the endorsement of the Alabama Health Care Improvement Task Force but was never introduced in the Legislature. Lawmakers did, however, enact new tax breaks for small businesses and for increased use of state port facilities. The Legislature also passed a bill – SB 208, sponsored by Orr – to require annual reports on whether tax incentives are producing their intended economic effects.
“Ban the box” legislation: SB 327, sponsored by Sen. Quinton Ross, D-Montgomery, won Senate committee approval on April 7 but never reached the Senate floor. The bill would have removed the criminal history checkbox from state job and license applications, removing a potential barrier to employment for thousands of Alabamians looking to rebuild their lives and provide for their families after serving their time for a criminal offense.
Housing Trust Fund (HTF): A bill to increase the state mortgage recording fee and distribute some of the revenue to the state HTF died in a House committee. HB 341, sponsored by Rep. Patricia Todd, D-Birmingham, would have created a dedicated state funding source for the HTF, which could create thousands of jobs while addressing Alabama’s need for more than 90,000 affordable homes for residents with extremely low incomes.
By Chris Sanders, communications director. Posted May 6, 2016.
Consumer protection took a big step forward in June 2016, when the Consumer Financial Protection Bureau (CFPB) proposed important new federal rules governing high-cost consumer lending products, including payday and auto title loans. The proposals came after years of public comments and input gathered at CFPB events across the nation. (Click here to learn more about the proposed rules.)
Alabamians played a key role in the development of these new regulations. The CFPB held its very first field hearing on payday lending in Birmingham in 2012, and President Barack Obama met with Arise and other state advocates in Birmingham in March 2015 before delivering a speech calling for consumer-friendly reforms of payday and title lending.
These loans come at a high cost in Alabama, where they can carry interest rates of 456 percent a year (payday loans) and 300 percent a year (title loans). The CFPB has broad power to regulate these loans, but importantly, it does not have the authority to reduce rates. Only states can do that.
Arise will continue to work for state-level payday and title lending reform alongside its partners in the Alliance for Responsible Lending in Alabama (ARLA). In the meantime, these new federal rules represent a critical opportunity to improve the landscape of short-term lending in Alabama. Read policy analyst Stephen Stetson's fact sheet to learn what the new rules would do, why they need improvement, and how you can help strengthen them.
ACPP policy analyst Stephen Stetson issued the following statement Thursday, June 2, 2016, after the Consumer Financial Protection Bureau (CFPB) announced new proposed federal rules on payday and title loans:
“Today’s CFPB announcement is an important step in the right direction for payday and title loan borrowers in Alabama, but it’s not enough. The new federal rules would strengthen consumer protections by requiring lenders to verify borrowers’ ability to repay for many loans. But the rules contain many exceptions, and they may not go into effect for quite some time.
“The new rules also would not change the extremely high annual interest rates that Alabama allows those loans to carry: up to 456 percent a year for payday loans, and up to 300 percent a year for title loans. Alabama needs to build on these rules at the state level by closing loopholes and encouraging more affordable short-term loans for borrowers.
“Far too many Alabamians are struggling under the crushing weight of high-interest debt, and they need a better way to climb out of it. Real reform of payday and title lending in Alabama would be good for consumers, good for the economy and good for our entire state.”
Years of reduced investment in higher education in Alabama have helped drive up college tuition, making higher education less affordable and risking long-term damage to the state’s economic growth, according to a report released Thursday by the Center on Budget and Policy Priorities (CBPP), a nonpartisan research organization based in Washington, D.C.
Alabama has cut state higher education funding by 36.2 percent since 2008 when adjusted for inflation, a decrease of $4,337 per student, the CBPP finds. As the state has slashed funding, the price of attending public universities has risen considerably. The average tuition at Alabama’s four-year public institutions has risen by $3,757, or 62.7 percent, since the 2007-08 school year – significantly faster than median income growth. For the average student, federal and state aid has not kept pace with rising costs, the report found.
“Too many young Alabamians are having to take on huge debt to try to get ahead, and rapidly rising tuition is scaring many low- and middle-income students away from college altogether,” Arise Citizens’ Policy Project executive director Kimble Forrister said. “Alabama will be stronger, and our communities will be more vibrant, if college is more affordable for students and their families.”
Getting a college degree is increasingly important for professional success and entry into the middle class. Rapidly rising tuition jeopardizes many families’ ability to afford the college education that is often key to economic advancement. This problem is especially significant for low-income students, and it also reduces campus diversity, Forrister said.
Communities benefit when more residents have college degrees. Areas with highly educated residents attract employers that pay higher wages. Those workers, in turn, use those wages to buy goods and services from others in the community, boosting the wages of workers at all education levels, according to the CBPP’s report.
“College-educated workers are essential to our economic success,” Forrister said. “Alabama must invest in higher education now to build the workforce needed to compete in decades to come.”
Your time is important, and your voice for a better Alabama is essential. That's why we've prepared these quick overviews to keep you up-to-date on what's happening at the Alabama Legislature on Arise's 2016 issue priorities. We'll update this post as needed.
"Ban the box" legislation: 'Ban the box' law would help rebuild lives in Alabama -- The "criminal history checkbox" on many standardized job application forms often keeps otherwise qualified employees from making it to the next stage of the hiring process, where they could explain their past face-to-face. This creates discouraging barriers to employment for people who are looking to rebuild their lives after serving their time and paying their debt to society. A growing national "ban the box" movement to remove those checkboxes from job applications is helping former inmates become productive members of society and provide for their families. It could do the same for thousands in Alabama. (The Senate Judiciary Committee on April 7 approved SB 327, which would "ban the box" on state job and license applications, but the Senate never voted on it.)
Death penalty reform: Death is different: Reforming Alabama's capital punishment system -- People accused of capital crimes deserve every possible safeguard to ensure the integrity of a conviction. This overview examines several bills that could lower the risks of errors and injustice and could bring Alabama law into compliance with U.S. Supreme Court rulings.
Health care: Medicaid RCOs: Better care, better health, lower costs -- Medicaid's promising new regional care organization (RCO) reforms are designed to keep patients healthier while cutting health care costs. Investing in preventive care now should pay off in fewer costly emergency room visits later. (The Legislature on April 5 overrode the governor's veto to pass a General Fund budget that would force deep Medicaid cuts. Lawmakers may return later this year for a special session to address Medicaid's funding shortfall.)
Housing: Home at last: The Alabama Housing Trust Fund -- Alabama has a shortage of almost 90,000 affordable and available homes for residents with extremely low incomes. State funding for the Alabama Housing Trust Fund (HTF), created in 2012, could reduce this shortfall and make dreams of home a reality for tens of thousands of families, seniors, veterans, and people with disabilities.
Payday lending reform: SB 91: A step in the right direction for Alabama borrowers -- Payday loans in Alabama carry astonishingly high interest rates: up to 456 percent a year. A Senate proposal would give payday borrowers a less expensive path out of debt by reducing the maximum interest rate and allowing borrowers to pay off their loan in installments over time. (The Senate passed the bill 28-1 on April 5. A House committee approved a different version of SB 91 on April 27, but the regular session ended without a House vote on either version.)
State budgets: Alabama's education budget begins to rebuild, but General Fund struggles put Medicaid at risk -- The usual contrast between Alabama’s starving General Fund budget and its slightly healthier but still inadequate Education Trust Fund budget is exceptionally stark this year. As education finally climbs back toward its 2008 funding level after years of enormous cuts, the latest General Fund shortfall threatens devastating Medicaid cuts with effects that could ripple through the state's entire health care system. (The Legislature on April 5 overrode the governor's veto to pass a General Fund budget that would force deep Medicaid cuts. Lawmakers may return later this year for a special session to address Medicaid's funding shortfall.)
Tax reform: Cigarette tax for Medicaid: A win-win to improve health and fill Alabama's revenue gap -- The future of Alabama Medicaid is on the line as lawmakers confront yet another threadbare General Fund budget. Without significant new long-term revenue, Medicaid will continue to be at risk of cuts to vital services and doctor payments that could place the entire program -- and Alabama's entire health care system -- at risk. A cigarette tax of 75 cents per pack could provide long-term revenue needed to avoid those cuts, while also reducing health care costs and saving lives in Alabama.
Voting rights: A menu of options to improve voting rights in Alabama -- Our entire democratic system depends on how elections are structured and who can participate. When barriers exclude people from voting, they often lose faith in a system that doesn't seem to value their voice in our society's decision-making process. This overview examines several bills that would protect and expand voting rights, including proposals related to early voting, streamlined voter registration and voting rights restoration. (SB 186, which would expedite the state's voting rights restoration process, has gone to Gov. Robert Bentley after passing the Senate on April 19 and the House on May 4. Different versions of HB 268, a bill to clarify which crimes are "crimes of moral turpitude" that permanently disqualify offenders from voting in Alabama, passed the House on April 19 and the Senate on May 3, but the plan died May 4 when the regular session ended before the House could vote on a proposed conference committee version.)
Posted March 7, 2016. Last updated May 5, 2016.
ACPP executive director Kimble Forrister issued the following statement Tuesday, May 3, 2016, after a proposal to use BP settlement money to avoid deep Medicaid cuts failed to win an Alabama Senate committee’s approval:
“Putting health care at risk for children, seniors, and people with disabilities is no way to build a stronger Alabama. Neither is lurching from one budget crisis to another because of our state’s failure to solve the General Fund’s long-term funding shortfall.
“Alabama’s looming Medicaid cuts would be devastating for our most vulnerable neighbors. The cuts could prompt many pediatricians to leave the state and could end coverage of essential services like outpatient dialysis and adult eyeglasses.
“The governor and the Legislature need to act quickly to prevent these Medicaid cuts from becoming a reality later this year. And our state needs to get serious about raising the long-term, sustainable new revenue needed to invest in a healthier, stronger Alabama for all.”