Hard choices ahead despite passage of $437 million amendment
by Tim Lockette and Brian Anderson
Star Staff Writers
Sep 20, 2012 | 4044 views |  0 comments | 9 9 recommendations | email to a friend | print
Many Alabamians breathed a sigh of relief when voters passed a $437 million budget-patching amendment Tuesday.

But the vote may not completely stave off the Medicaid cuts, prisoner releases and tax increases voters hoped the amendment would prevent. State officials say belt-tightening — and possibly the collection of sales tax on Internet purchases — will be needed to balance the books when the $437 million runs out.

“Medicaid is really unsustainable at the growth rates we’ve seen over the past few years,” said state Senate President Pro Tem Del Marsh, R-Anniston. “We have to do something.”

Alabamians voted 2-to-1 Tuesday to pass a constitutional amendment that would take money from the Alabama Trust Fund, a state account for oil and gas revenue, and use it to prop up the state’s General Fund budget, to the tune of $145 million per year for the next three years. Advocates said the measure was needed to offset the sharp rise in the state’s Medicaid costs, which have nearly doubled since 2010, due an aging population, an increase in poverty and the end of federal stimulus money.

Opponents of the measure said the amendment was just kicking the can down the road, putting off tough budget choices for three years. Amendment supporters in the Legislature didn’t deny that, but said the three-year reprieve would give them time to work.

State officials Wednesday had only a basic outline of how that work would be done, but they acknowledged that Medicaid costs would still need to be trimmed.

“We really cannot put Medicaid off,” Marsh said. “I’m confident that in the next Legislative session we will find a way to deal with this.”

Marsh said he hopes Congress will allow the state to accept its Medicaid funding as a block grant — a change which, he said, would allow the state to decide who qualifies for the program and who doesn’t. He said he’d also like to pass a law that would cap state Medicaid expenditures — setting aside a certain percentage of the budget for the program, and no more.

Jim Carnes, communications director for the anti-poverty group Alabama Arise, warned that cuts to the program could have effects far beyond Medicaid’s direct clients.

“Medicaid is the glue that holds the health care system together,” he said. Carnes noted that Medicaid payments form the financial core of many health care institutions – meaning that loss of those payments could cause hospitals and other facilities to close.

After passage of the amendment, a few legislators said they felt economic growth could alleviate much of the budget problem over the next three years, by raising state revenue and getting people out of poverty and off Medicaid.

Senate Fiscal Officer Kirk Fulford said the state doesn’t yet have budget numbers for the next three years. But the revenue picture could change dramatically, he said, if Congress passes a law that would set up a system to collect sales tax on Internet commerce.

Fulford said the Alabama Legislature passed a law in the last special session that would allow the state to collect those taxes — and send much of the revenue into the general fund — if the U.S. Congress does approve the sales tax. Existing sales taxes go primarily to the state’s Education Trust Fund.

“They wanted a growth source of revenue,” Fulford said. He said the budget bind is due in part to the fact that the General Fund’s revenue sources don’t grow.

Robert Robicheaux, a University of Alabama at Birmingham marketing professor who advocates collecting Internet sales tax, said the state missed out on $190 million 2011 because it has no ability to collect that tax.

“It’s not a new tax,” he said. “This is something people already owe. It just hasn’t been collected.”

The ballot wording of the Sept. 18 amendment promised a “mass release” of prisoners if the amendment failed. Prison officials Wednesday reiterated that Alabama’s corrections system is currently at 190 percent of its capacity, meaning that prisoner populations will have to be reduced — though not as drastically as they could have been if the amendment had failed.

“We’re very pleased and thankful that the voters recognized this issue and made the right decision,” said Kim Thomas, commissioner of the Department of Corrections. “We had on our hands an almost collapse of the criminal justice system in my opinion.”

Thomas said a bill, passed in the last Legislative session, would overhaul the state’s Sentencing Commission and could lead to reduced prison populations — over time.

“We won’t see a dramatic decrease in admittance right away, but over time that bill will benefit us,” Thomas said.

Or maybe not, according to Calhoun County Sheriff Larry Amerson, who said the solution to keeping people out of jail is much more complex than just releasing them.

“We’re arresting far more people than ever before and it means parole officers are taking on bigger and bigger case loads,” Amerson said. “We just can’t keep adding to that without addressing the issue of how to deal with these people. It’s a vicious cycle.”

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Hard choices ahead despite passage of $437 million amendment by Tim Lockette and Brian Anderson
Star Staff Writers

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