Challenges Present Opportunities for Reform

It is no secret that as the Alabama Legislature reconvenes in March we have some major challenges.  Our General Fund Budget of about $1.6 Billion will have a shortfall of nearly $250 million in the upcoming fiscal year. This is a big problem considering that Medicaid and prisons consume about 65% of the budget and cannot be cut any further than they already have been. I believe this challenge presents us with some real opportunities for reform.

For better or worse, government seldom tackles necessary reform until they are faced with a crisis. Instead of the knee-jerk reaction to automatically raise revenue, we should first look at where long-term reform can save our state money. I have long talked about the need for reform in our broken corrections system in Alabama. The model we have right now is not working and many other states have already provided us with the blueprint that can help Alabama move forward in a fiscally conservative manner on this issue. While it might take a lot of political courage to take on this reform, it is long overdue and will save the taxpayers a lot of money, as well as enhance public safety.

Medicaid is another area that the state needs to take a hard look at reforming.  It is the fastest growing part of our General Fund Budget.  The answer some say is to just ‘take the additional federal money being offered under Obamacare.’ This is a terribly, over-simplistic approach to solving our problem. By taking the federal dollars that have been proposed, the State of Alabama will still have to provide 10% of the overall Medicaid dollars given to us. That sounds like a good deal; however, the problem is that 10% of the federal dollars could increase the spending in our General Fund by up to $120 million.  If we are short $250 million now, why would we increase expenditures by that much money and where would it come from? 

Alabama state government does have some serious challenges ahead, but I truly believe these challenges will force us to finally tackle some of the long overdue reforms that are needed. 

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