A bill that its sponsor describes as “a compromise” on payday loan reform emerged from an Alabama Senate committee Wednesday. SB 91, sponsored by Sen. Arthur Orr, R-Decatur, is called “Colorado-style reform,” because it models changes to consumer lending laws approved by that state in 2010.
The bill now awaits a Senate vote. No other payday or auto title lending reform legislation has been introduced so far during the 2016 regular session.
SB 91 would cap payday loan interest rates in Alabama at about 180 percent a year. The payday loan industry has continued to exist in Colorado after that state’s reforms, but it was reduced in size. The number of defaults and bounced checks also have declined.
The bill cleared the Senate Banking and Insurance Committee, with at least three senators voting against approval. Committee members opposing SB 91 were Sens. Bill Holtzclaw, R-Madison; Shay Shelnutt, R-Trussville; and Tom Whatley, R-Auburn. Whatley moved to carry the bill over, which would have delayed a vote on it, but the committee rejected that motion. No public hearing was held on SB 91, but the measure sparked considerable discussion among committee members.
Orr repeatedly described his bill as “a middle ground” between consumer advocates and the payday loan industry. Arise, Alabama Appleseed and other consumer groups long have pushed for interest rates on payday loans to be capped at 36 percent a year in Alabama. (Current state law allows rates of up to 456 percent a year.) Payday lenders oppose any such change.
By Stephen Stetson, policy analyst. Posted Feb. 17, 2016.
2016 legislative update: Same old song: Alabama faces another shortfall for vital services, but lawmakers aren't eager to raise revenue to prevent cuts
Groundhog Day, the first day of the Alabama Legislature’s 2016 regular session, left advocates for human services feeling a powerful sense of déjà vu. A mere five months ago, the Legislature managed, with small tax increases and large transfers from the Education Trust Fund (ETF) budget, to pass a 2016 General Fund (GF) budget that barely maintained Medicaid, mental health care, corrections and other essential services.
It took lawmakers three tries to pass this year’s GF budget, and many advocates hoped the grueling experience would lead legislators to sober consideration of Alabama’s very real need for sustainable new revenue for the perenially cash-strapped GF. Unfortunately, that doesn’t seem to be the case for many of them.
The Legislature began consideration of the 2017 budgets this week with no indication that it will seriously consider significant new revenue measures like closing income tax loopholes or raising the cigarette tax. Instead, key legislators told the media that they saw “no appetite” for tax increases, and said any further ETF transfers were “off the table.”
Those stances are in sharp contrast to the shortfalls and unmet needs for health care, public safety and other vital services in Alabama. In pre-session budget hearings, agency leaders asked the GF budget committees for an additional $235 million just to maintain current services. The GF has a structural deficit, with normal cost growth regularly outpacing the sluggish growth of its revenue sources.
Medicaid alone needs an additional $157 million to avoid cuts and complete the shift to a new regional care organization (RCO) model designed to save money and keep patients healthier, Commissioner Stephanie Azar told lawmakers last month. Medicaid provides health coverage for one in five Alabamians – mostly low-income children, seniors, and people with disabilities.
Bentley’s plan: Move money from education to General Fund
Gov. Robert Bentley sent his proposed budgets to the Legislature on Feb. 3, as required by the state constitution. But unlike last year, he offered no recommendations for new revenue. Instead, Bentley proposed to move $181 million of use tax revenue from the education budget to the GF and to replace that money with a one-time transfer of money from the ETF Budget Stabilization Fund and the ETF Advancement and Technology Fund.
Senate President Pro Tem Del Marsh, R-Anniston, told AL.com this week that he would be “very surprised” to see lawmakers move ETF money to the GF again this year.
The Budget Stabilization Fund originally was created as a savings account to help the ETF avoid proration in years when revenues were low. The Advancement and Technology Fund was created just last year so schools would have money available for one-time expenses like buildings, buses and textbooks. Without a transfer, about $195 million will be available in these two accounts at the end of 2016, according to Legislative Fiscal Office estimates.
While use taxes would continue to bolster the GF in future years, the ETF revenue loss would only be replaced in 2017 if lawmakers pass a bill sponsored by Sen. Paul Sanford, R-Huntsville. SB 129 would spend 90 percent of the money in these two accounts in one year and leave the ETF without a source to replace lost revenues from the use tax (essentially a sales tax on out-of-state purchases) in future years.
Medicaid, public health would come up short in governor’s budget
Bentley’s budget is a starting point for the GF debate, but if history is any guide, it will not be the final product. With the help of the ETF transfer, Bentley’s proposed budget includes:
Bentley’s total proposed GF budget is only 5 percent larger than last year’s, even with the transfer from the ETF. This anemic growth would do little to make up for a 15 percent cut to the GF since 2008, and a nearly 20 percent ETF cut in that time. Alabama’s state K-12 cuts have been the nation’s second worst since the Great Recession, while its higher education cuts have been the fourth worst.
By Carol Gundlach, policy analyst. Posted Feb. 4, 2016.
It’s a quiet win for thousands of Alabamians seeking to rebuild their lives and provide for their families: Alabama is joining the majority of U.S. states by allowing people with a past felony drug conviction to receive SNAP food assistance and TANF financial assistance, as long as they are otherwise eligible. The effective starting date for this change is Jan. 30, 2016.
The end of Alabama’s SNAP and TANF bans is good news for state budgets and for families. This policy change will help cut corrections costs in the cash-strapped General Fund budget by making it easier for released prisoners to reintegrate into the community, which will help reduce recidivism. Importantly, restoring SNAP and TANF benefits also will help prevent hunger and homelessness among some of Alabama’s most vulnerable families.
Many unemployed Alabama adults once again face strict time limits for assistance under the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. These “able-bodied adults without dependents” – folks who do not live in a SNAP household with children – will be allowed to receive SNAP benefits for only three months during a three-year period (ending Dec. 31, 2018), unless they either meet complex work requirements or are found to be exempt from the time limit.
This federal rule was part of the 1996 welfare reform law, but because of the recession, it has not been in effect for nearly a decade. Now that the economy has improved, reinstatement of this rule will deny food assistance for many of the nation’s most vulnerable low-income people. Because Alabama’s three-month clock started ticking Jan. 1, 2016, all able-bodied adults without dependents receiving SNAP on Jan. 1, 2016, will lose benefits on April 1, 2016, if they are not working, participating in job training or declared exempt. The change could cut off SNAP benefits for nearly 50,000 Alabamians and as many as 1 million people nationwide.
This fact sheet by ACPP policy analyst Carol Gundlach takes a closer look at the SNAP time limits, the exemptions from them in Alabama and the steps that service providers can take to help people affected by the limits.
Alabama ranks second worst in the country in state K-12 education funding cuts, with state formula support down 17.3 percent since the start of the Great Recession, according to a report released Thursday by the Center on Budget and Policy Priorities (CBPP), a nonpartisan policy research organization based in Washington, D.C. Only Oklahoma has seen deeper per-student state funding cuts since 2008 than Alabama has. Overall, Alabama cut its total state and local investment in K-12 schools by 11.3 percent per student between 2008 and 2014, the seventh worst cut in the nation.
This erosion in education support could make it harder for workers to compete for highly skilled jobs in the global economy, said Kimble Forrister, executive director of Arise Citizens’ Policy Project (ACPP). Cutting education also could make it more difficult for communities to attract well-paying jobs and could deprive local businesses of a strong customer base, Forrister said.
"If we want a strong future for our state, we need to invest in it now," Forrister said. "Alabama must invest in our schools so our children and grandchildren can receive the education they need to succeed in life and help their families get ahead."
Alabama forever will be linked to the struggle for voting rights. An important question today is whether our state can shed its legacy of voter suppression, or whether we will continue to be seen as hostile to the idea of equal voting access and broad participation in democracy.
A 2015 report on healthy democracies ranked Alabama in last place out of 50 states and the District of Columbia. A big reason for the low ranking is our election participation policies. Alabama doesn’t allow pre-registration for 16- and 17-year-olds, and voters aren’t permitted to register online. We lack early voting, and Election Day is not a holiday.
Several proposals have been put forward to make voting easier in Alabama. They include bills to allow prospective voters to register on the same day as the election, give voters five days to cast a ballot, and automatically register eligible voters who apply for a driver's license, allowing them to "opt out" of voter registration instead of having to opt in. Digitization of voting records and restoration of voting rights also are potentially fruitful areas of reform.