Alabama House approves General Fund budget with 2% state employee pay raise

The Alabama House of Representatives Tuesday unanimously approved the General Fund budget for next year and a bill increasing spending for other agencies.

The House voted 105-0 for HB 124, sponsored by Ways and Means General Fund Chairman Rex Reynolds, R-Huntsville, which provides $3 billion to the General Fund budget that provides broad funding increases for most state agencies and includes a 2% pay raise for state employees.

The legislation moves to the Senate.

“So good budget – we are fortunate to have additional revenue and certainly proud of the members supporting us on that,” Reynolds said.

The budget is about $15 million larger than Gov. Kay Ivey’s proposal earlier this year, but mostly follows the governor’s recommendations.

The increase in the House’s budget is due to a growth in revenue that the state has seen lately, Reynolds said.

The House also approved HB 125, a supplemental appropriation bill increasing the current General Fund budget by $201 million. The bill appropriates money to 23 different items, including $50 million to a General Fund reserve; $39 million to the Department of Mental Health, mainly for construction at Taylor Hardin Secure Medical Facility in Tuscaloosa, and $40 million to pay off debt.

The bill passed 105-0.

Alabama House Speaker Nathaniel Ledbetter, R-Rainsville, said that the budget was still conservative but that it still puts the Legislature in a good place to provide the additional funding for state agencies.

Ledbetter also noted that when he was elected in 2014, the Legislature faced repeated revenue shortfalls in the General Fund budget. Growth in Internet sales tax revenues in recent years has helped stabilize it.

“From where we were when I first come in, we could hardly pay the light bill to where we are today is quite a change, and I think it’s just a continuation of being careful how you spend your money and when you got some extra putting it back, instead of spending it all,” Ledbetter said.

The House voted 102-0 for the HB 154, the pay raise bill, sponsored by Rep. Napoleon Bracy, D-Prichard.

The Legislative Fiscal Office predicts that it would increase the state employee costs by an estimated $45 million per year.

The total expenditure from the State General Fund is just over $3 billion, which is only about $15 million more than what the Governor recommended. It is an increase of about $169 million (6%) over the current $2.86 billion budget.

The General Fund benefited from over $150 million increase in revenue from rising interest rates on state funds. In previous years, that number was around $35 million. Other tax collections have increased by as much as $50 million, Reynolds said.

The proposed budget would also allocate $863 million to the Alabama Medicaid Agency. The Medicaid Agency received about $794 million last fiscal year. The money chiefly goes to matching federal funding for the program. The federal government pays most of the cost of the Alabama Medicaid program.

The Department of Public Health could receive about $112 million, a $36 million increase from the previous year (47%). The allocation was slightly higher than what the Governor recommended. The Office of Primary Care and Rural Health would get $2 million for award funding to licensed physicians or nurse practitioners who agree to practice full-time in primary care in a medically underserved rural area. Another $2.5 million would go to funding public events and activities on outbreaks and surveillance.

The Board of Pardons and Paroles would receive a slight increase from the previous year, from $82.6 million to $87.5 million, a 6% increase.

The proposed budget would allocate about $662 million to the Department of Corrections, or a $59 million increase (10%).

The Department of Human Resources would see a $14.4 million increase from the previous fiscal year. The proposed budget would allocate about $122 million, roughly a 13% increase over the current year. Some of that increase would be used to create placement spots at Freedom Farm, which supports children and young adults in crisis or need help and support, such as aging out of foster care.

The Department of Mental Health received a bump in the proposed budget. The department would receive about $209 million, which is an increase of $4.5 million from the Governor’s recommendation. The 8% in increased funding from the previous year would go largely towards community mental health centers and increased rates for community providers.

Reynolds said that he had a lot of discussions with lawmakers and attributed that success in passing the budget to the many legislators who reached out and even brought in community and business leaders to discuss state needs.

“We were able to take care of a lot of community needs and a lot of different districts in Alabama, and that certainly that leads to a strong vote on the House floor,” Reynolds said.

Alabama Reflector is part of States Newsroom, an independent nonprofit website covering politics and policy in state capitals around the nation.

This article originally appeared on Montgomery Advertiser: Alabama House OKs General Fund budget with 2% state employee pay raise