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Special Session Allows Medicaid Reform to Move Forward

On Wednesday, the Alabama Legislature concluded a special session focused on Medicaid called by Governor Robert Bentley. The state’s Medicaid program has faced enormous fiscal challenges over the past few years: Medicaid’s costs have skyrocketed over the past decade as the number of recipients has increased in a sluggish economy, while state tax revenues for the General Fund budget (the budget for all non-education state spending) have mostly flat-lined.

Indeed, going into the special session, Medicaid faced a $85 million shortfall between what administrators had requested for the coming fiscal year and what the Legislature had been able to budget. The $85 million deficit led Medicaid to cut physician reimbursements in August, and the department warned cuts in other service reimbursements would soon follow. I spoke with medical group directors and hospital administrators across the state who warned that Medicaid’s cuts would lead to higher health care costs for all Alabamians, as people who were previously on Medicaid would begin using the ER for routine services.  

After much debate in the special session, the Legislature chose to use the state’s BP settlement for three purposes: pay off debt, increase Medicaid’s funding, and jump-start critical infrastructure projects in Mobile and Baldwin counties, an area that sustained enormous economic loss as a result of the 2010 Deepwater Horizon oil spill. All told, Medicaid will receive an increase of $190 million over the next two years from the BP settlement. That increase should stave off cuts for the next two years.

Most importantly, the Legislature’s plan enables long-term reform of Medicaid to move forward. There is no doubt that Medicaid – the largest expense line by far in the state’s General Fund – must be reformed for our state to be financially stable. In 2010, Medicaid cost the state $314 million. By 2015, Medicaid’s costs had spiked to $685 million, consuming 37% of the General Fund.

In 2013, conservatives in the Legislature passed a series of reforms designed to bend down Medicaid’s long-term cost curve. Under this plan, groups of local health care providers called Regional Care Organizations (RCOs) would each be given annual budgets to care for Medicaid patients in their geographic region. Essentially, part of Medicaid’s budget would be block-granted to the RCOs, which would assume responsibility for the delivery of care.

Poised to begin this coming year, the RCOs are projected by independent actuarial studies to save the state millions of dollars. Federal administrators at the Centers for Medicare and Medicaid Services (CMS) have praised Alabama’s RCO innovation and recommended it to other states. CMS has even set aside over $700 million in additional federal money to help jump-start the program, with the proviso that Alabama must continue to adequately fund the state portion of the program’s costs.

The outcome of the special session for Medicaid, then, is this: impending cuts to Medicaid have been averted, and more importantly, long-term reform of the program via the RCOs can move forward. By any definition, the special session was a success for stabilizing Medicaid, and that is a win for the entire state.

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Republican Senator Cam Ward represents District 14 in the Alabama State Senate, which includes all or parts of Shelby, Bibb, Chilton, Hale, and Jefferson counties. He serves as Chairman of the Senate Judiciary Committee. Follow him on Twitter: @SenCamWard

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Senator Works to Save Local Bills

MONTGOMERY — A proposed constitutional amendment in the Statehouse to keep hundreds of local pieces of legislation from potentially being undone is facing the same deadline challenge that a lottery proposal did.

If it doesn’t pass and get to voters, more than 600 local laws could be invalidated by courts, Sen. Cam Ward said Wednesday.

The list of local bills that could be undone goes back more than a decade and in the Tennessee Valley includes tax referendums, changes to city limits and the distribution of TVA money.

“The ramifications would be very far reaching and you would have a pure disaster,” Ward, R-Alabaster, said.

Eric Mackey, the head of the state’s school superintendent association, said this morning some school districts’ local tax revenue could be impacted, but each piece of legislation would have to be overturned individually.

The issue, according to Ward, is that a trial court recently ruled that the way the Alabama House has been counting votes on its budget isolation resolutions is unconstitutional. Budget isolation resolutions are procedural votes in each chamber that allow bills to be discussed and voted on before the Legislature has passed the General Fund and education budgets.

The House and Senate rules differ on the definition of the three-fifths vote required to pass a budget isolation resolution, Ward said. A recent court challenge on a local bill led a state trial court to declare local bills passed by the House invalid. If an appeals court upholds that decision, more than 600 bills could be struck down, Ward said.

“Declaring all these local bills unconstitutional would have an enormous impact,” Ward said. “You’d see a lot of counties that would suffer financially…

“Money for your sheriffs, district attorneys, judges, county governments, school funding, annexations would all go away.”

Ward sponsored Senate Bill 7 in this special session. It calls for a constitutional amendment put before voters to essentially declare the local bills valid, as well as the Legislature’s voting process moving forward.

The bill passed the Senate last week and was sent to the House, where changes were made. The bill was sent to a conference committee of Senators and House members to work out differences in the two versions of the bill, but that meeting didn’t happen Wednesday.

That was the deadline to get proposed constitutional amendments on the Nov. 8 ballot, Secretary of State John Merrill said Wednesday. He said that unless the law was changed or he received an attorney general’s opinion telling him otherwise, a constitutional amendment allowing for a statewide lottery would not be on the Nov. 8 ballot.

Ward on Wednesday night said he was hoping Merrill would reconsider. Ward, an attorney, said he believed state law allowed a few more days to get an amendment on the ballot.

He said the conference committee was going to go ahead with work on the bill today.

“I’m not so sure the Secretary of State is going to be so hard and firm on that (deadline rule),” Ward said.

As lawmakers continue to hash out a proposed lottery and the best way to use the state’s nearly $1 billion BP settlement, Ward said his bill is a bit of a political pawn.

“What you’re doing, people are holding my bill hostage,” he said. “If you don’t (pass it) all 67 counties are hurt.”

The words “budget isolation resolution” aren’t sexy, Ward said, and he can’t see a special election being called on the topic. But not getting the proposal to voters could have disastrous ramifications.

“Not everyone is in love with lottery, not everyone is in love with BP, but all sides see that we have to (do) this,” Ward said.

Ward has a list of local bills that could potentially be challenged and undone. It includes:

• Limestone County’s TVA in-lieu-of-tax money distribution changes made in 2012;

• Hartselle’s 2015 ad valorem tax increase referendum to support education. The referendum was approved by voters.

mary.sell@decaturdaily.com. Twitter @DD_MarySell.

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Lottery Special Session Uncertain

The General Fund is in trouble and must be fixed before a rapidly approaching deadline.

But a shortfall that’s squeezing health care weeks before the 2017 budget goes into effect is a new and unwelcome development.

It’s one forcing doctors around the state to lay employees off, creating longer waiting times, and threatening to become much worse if legislators can't find a solution.

“That affects people, whether they’re on Medicaid or not,” said Linda Lee, president of the Alabama Chapter of the American Academy of Pediatrics, which represents pediatricians. “The impacts that are happening will be felt by all the patients who come to those practices.”

To address the problem, Gov. Robert Bentley will lay two options before legislators when they convene for a special session Monday. The governor plans to ask the Legislature to consider an amendment allowing a statewide lottery, with proceeds going to Medicaid. Because that money won't be available until 2018 at the earliest, Bentley should ask the Legislature to approve an agreement on distributing the state's share of the settlement 2010 Gulf oil spill, which could free tens of millions of dollars for Medicaid.

In appearances around the state, Bentley has said the health of hundreds of thousands of children – who make up the majority of Medicaid recipients – depends on finding a solution.

“All of this boils down to children, it boils down to the disabled, the elderly and the pregnant women that are Medicaid right now, the (one) million people in the state,” Bentley said at a press conference Aug. 3. “The lottery is just a means to an end.”

The question is whether legislators embrace that approach. Most last week rated the lottery’s chances of passage as no better than a coin flip.

“I wouldn’t vote for it,” said Sen. Trip Pittman, R-Montrose, the chairman of the Senate’s General Fund committee. “I think it’s a poor way to fund government, and it doesn’t solve our problems.”

Senate President Pro Tem Del Marsh, R-Anniston, said Friday he "honestly didn't know" what the lottery's prospects were.

"At end of day, it’s getting 21 votes in the Senate," he said. "Right now, I don’t know that anyone can claim they have 21 votes."

But no one seems to deny the problem with Medicaid, or the need to address it.

“I have heard a number of practices specifically tell me A) they have already laid people off or B) they will be doing so in the near future,” said Mark Jackson, executive director of the Medical Association of the State of Alabama, which represents 7,000 physicians statewide.

Opening the Constitution

The Alabama Constitution bans lotteries and gambling. Any measure approved by the Legislature will be a constitutional amendment requiring the approval of three-fifths of both chambers, and then approval by the state’s voters. To get on the November ballot, legislators will have to approve a lottery by Aug. 24.The governor had not issued the formal call for the session as of Friday afternoon. Yasamie August, a spokeswoman for Bentley, said in emails Friday they were working on the language related to BP. August said the call would come on Monday. Legislators plan to meet Monday afternoon.

Bentley’s proposal, if approved, would authorize the Legislature to create a lottery with all proceeds going to the state’s beleaguered General Fund, where Medicaid funding originates. The state could set up its own lottery or join a multistate game, like Powerball.

For the most part, the General Fund’s revenue streams post flat growth year to year, and can't keep up with growing expenses. That affects Medicaid, which in June covered 1 million Alabamians, over 20 percent of the state’s population. While the federal government picks up more than two-thirds the program, Alabama must put up matching dollars to pull that money down.

The Legislature allocated $700 million for the program in the General Fund budget approved over Bentley's veto last spring. That was $85 million less than the agency said it needs to maintain its current level of services and implement regional care organizations (RCOs), aimed at moving Medicaid into a managed care model that supporters hope will slow cost growth in the program.

To address the shortfall, Medicaid cut physician reimbursements earlier this month. Bentley said he wants to reverse that as soon as possible, but layoffs have already begun in some practices, and physicians’ groups warn that waiting times will likely increase for all patients.

“The most obvious thing is the reduction in pay,” Jackson said. “The least obvious is the uncertainty, (and) not knowing what to expect down the road. It puts a tremendous strain on the practice and a tremendous strain on the employees at the practice.”

The cuts hit the state’s pediatricians particularly hard. The Alabama Medicaid Agency says more than 52 percent of Medicaid recipients – 542,697 people -- are 17 years old or younger. Pediatric offices rely on Medicaid to keep their doors open.  Some pediatricians have already laid off employees, Lee said, and they may not be coming back, even if the cuts are reversed.

"The more devastating effects are going to be felt in the rural areas," she said. "That’s where you may have only one doctor taking care of kids. If they stop taking Medicaid, (patients) have to travel further. And they’re already at a disadvantage when it comes to transportation."

Both Bentley and Medicaid officials have warned that other cuts may come. But Bentley said Aug. 3 that the Centers for Medicare and Medicaid Services (CMS), the federal agency that administers Medicaid, have warned the state that any further cuts would jeopardize up to $748 million the state could get from the federal government to implement the RCOs and improve the state’s performance on benchmarks like infant mortality.

The governor estimates his lottery bill would bring about $225 million into state coffers. If voters approved the amendment, the Legislature would work out the details in a future session.

Sen. Jim McClendon, R-Springville, who will sponsor Bentley's bill in the Senate, plans to file a second bill that would not only set up a lottery but allow virtual lottery terminals – resembling slot machines but considered Class II, non-casino gaming in some jurisdictions – at the state’s four pari-mutuel locations: VictoryLand in Macon County; GreeneTrack in Greene County; the Mobile Greyhound Park and the Birmingham Race Course.

McClendon’s legislation, also a constitutional amendment, would also allow the governor to negotiate a gaming compact with Poarch Band of Creek Indians, who own the Birmingham and Mobile facilities and also operate casinos in Atmore, Montgomery, and Wetumpka.

McClendon says his proposal would bring in $427 million, with about $127 million coming from the lottery machines.

For the most part, the state’s gambling industry has maintained public silence on the proposals. Attempts to reach VictoryLand owner Milton McGregor and GreeneTrack CEO Luther Winn last week were unsuccessful. Bentley and McClendon said in separate press conferences earlier this month they expect pushback from the Poarch Band against McClendon’s plan. Marsh said Friday he had heard nothing, "not from the existing tracks nor from the Indians" about the plans.

Sharon Delmar, a spokeswoman for the Poarch Band, said in a statement last week the tribe “supported the governor’s efforts to find a solution to the funding crisis.”

“We believe a lottery that is highly regulated can play a role in easing the shortfall, but there are a myriad of considerations and details that must be addressed before any such plan can be structured and implemented,” the statement said.

Support for gambling generally falls down party lines, with Democrats in support and Republicans – who control a supermajority in both chambers – usually opposed. Sen. Bobby Singleton, D-Greensboro, whose district includes GreeneTrack, said last week he preferred McClendon’s bill and believed the casinos could get the lottery machines in place quickly.

“I’m for whatever will give us most money to solve the Medicaid funding issue,” he said.

But Bentley and other legislators say gambling would kill any lottery proposal put forward.

“You can’t get the votes,” said Sen. Cam Ward, R-Alabaster. “(McClendon’s) worked hard because he realizes you can’t get any Democratic votes without casino votes. But you put casino gambling in, you lose a lot of Republicans.”

The lottery itself will be a tough sell. Some legislators want to see at least some proceeds go to the state’s Education Trust Fund (ETF); McClendon said his plan would put the first $100 million of revenues toward education. House Minority Leader Craig Ford, D-Gadsden, plans to introduce a lottery bill that would put the proceeds toward scholarships for college.

Others oppose the lottery on moral grounds or see it as at best a stopgap solution: Lottery revenues tend to post flat growth, and a lottery on its own may not be able to keep up with growing expenses in the General Fund.

Legislators give the chances of lottery passage mixed chances at best, particularly with the Aug. 24 deadline looming.

“I don’t see this thing getting any traction,” said Rep. Reed Ingram, R-Pike Road. “I’d give it a 98 percent failure rate.”

Rep. John Knight, D-Montgomery, said both he and members of the House Black Caucus would study the bills put before them.

“It’s got to generate money on a consistent basis,” he said. “It has to be something that makes sense. It has to be something fair for everybody.”

It may be a measure of the lottery bill’s chances that legislators see a settlement of the state’s claims against energy company BP over the 2010 Gulf oil spill as more likely. The bill, sponsored by House Ways and Means General Fund chairman Steve Clouse, R-Ozark, passed the House in the spring but never came to a vote in the Senate. Clouse will refile the bill for the special session, and it could be in committee Tuesday.

The issue last spring was not the Medicaid part of settlement – the bill would use most of an estimated $639 million to pay off outstanding debts and free up $70 million for Medicaid – but the allocation of money for road projects. The version that passed the House included $191 million for road projects for Mobile and Baldwin counties, hit hardest by the oil spill. North Alabama senators attempted to amend the bill to increase the debt repayment and give a smaller share of road funds to all 67 counties in the state.

Nothing had changed on the bill, Clouse said Friday, except the situation in Medicaid and the absence of other remedies.

“I don’t think it’s necessarily changed so much as the realism has set in that this is the only thing that’s going to pass,” Clouse said.

Pittman, whose district is in Baldwin County, fought north Alabama efforts to change the bill in the last session, said he would support Clouse’s proposal. If the Legislature can’t pass a lottery bill before Aug. 24, legislators could continue meeting until mid-September to come up with a solution.

“If the votes aren’t there for a lottery, you move for other solutions, you circle back and try come up with other solutions,” he said.

The state's health care providers will watch.

“Year in and year out, this is constantly happening,” Lee said. “Every year is a guessing game as to whether there will be enough funding. I think the Legislature is going to have to come up with sustainable funding, or those impacts will remain there.”

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Long Past Time We Fixed I-65

BIRMINGHAM, Ala. (WIAT) — Anyone who frequently travels I-65 in Shelby County could tell you traffic congestion has been brutal at times throughout the summer when commuters and vacationers clogged the road.

State Senator Cam Ward (R-Alabaster) says the summer congestion is the worst he’s ever seen. The rest of the year rush hour traffic remains a major headache for commuters.

Ward says a long overdue projects to widen I-65 to 3 lanes between the Pelham exit at Co Rd 52 and the Alabaster exit at US 31 should finally begin next year, but he says he’ll keep the pressure up until it’s finished.

“Sometime next summer originally it was the spring, but you know I’ll I’ll be glad if we could just get started next summer. I understand how long these things take, but the area’s been mapped out, they have the right-of-way determined, they’ve done everything they need to do it’s just time to start the construction,” said Ward.

“As someone who’s been up and down that road a lot this past summer yes the beach traffic has been worse I think than it’s ever been… that I’ve ever seen it. The congestion has just been absolutely awful. That traffic this summer shows clearly why you’ve got to widen that road. At least down to the Shelby County Airport exit. I understand your gas tax revenue is declining, which means there are fewer  road projects in the state, but at the same time I-65’s been  on the books for a long, long time to be widened. So I think we as elected officials in that area have to hold their feet to the fire in that area and say we expect it and it’s definitely needed from the traffic counts.”

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Prison Oversight Committee to Ask Hard Questions

Decatur Daily-

PRISON CAPACITY

While lawmakers are in Montgomery, the Joint Legislative Prison Committee is going to meet. Sen. Cam Ward, R-Alabaster, chairs the committee and said its agenda includes asking the Alabama Department of Corrections commissioner to come up with a detailed explanation of prisons’ capacity.

“I think we all agree that we’re over capacity, but give us some solid numbers on how much over capacity,” Ward said Friday. He said there is a difference between construction capacity — how many prisoners a facility was originally built to house — and structural capacity, which is how many they may hold after renovations and additions.

The committee wants to know how many more beds are needed, Ward said.

Bentley in February first pitched to lawmakers his plan to shutter most of the state’s 16 crowded and dated prisons by borrowing $800 million to build three mega-prisons housing up to 4,000 male inmates each and one women’s prison. The legislation died on the last day of the spring session.

Bentley has said he’ll bring it back next year. The ADOC, meanwhile, has a nearly half-million-dollar contract with an engineering firm to study the prisons.

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Cam Ward Receives National Award for Health Care Reform Efforts

Friend of Government Accountability award recognizes Ward’s leadership in promoting patient choice in healthcare

MONTGOMERY, Ala. – Senator Cam Ward (R-Alabaster) was presented last week with the Foundation for Government Accountability’s 2016 “Friend of Government Accountability Award” for sponsoring the Alabama Right to Shop Act to reward patients who utilize high-value health care options.

Leaders like Ward want to help American patients play a larger role in the health care services they consume while rewarding them for using options that are cost effective. With a shared savings structure, SB116 would have encouraged patients to fully explore their health care service options and reimbursed them when they chose cost efficient services.  

“Our health care system is in dire need of reform, and that’s why it’s so important policymakers seek out and support innovative and proven options like Right to Shop, and continue to push for their passage until they cross the finish line,” said Tarren Bragdon, CEO of the Foundation for Government Accountability.

“It is a honor to receive this award, and I look forward to continuing the effort to empower patients with choice in our healthcare system,” Ward said.

A similar program to the one sponsored by Ward helped save the state of New Hampshire $10 million through their employee health plan. The employees have enjoyed nearly $2 million in reward payments.

“Leaders like Sen. Ward understand the transformative power of reinserting market forces and incentives back into our health care system, where programs like this can finally deliver lower costs and higher patient satisfaction,” Bragdon remarked.

Ward is one of a handful of state leaders from around the country being recognized with the annual award for their efforts to transform health care in 2016.

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Republican Senator Cam Ward represents District 14 in the Alabama State Senate, which includes all or parts of Shelby, Bibb, Chilton, Hale, and Jefferson Counties. He serves as Chairman of the Senate Judiciary Committee. 

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Ward Appointed to Faith & Justice Fellowship

MONTGOMERY, Ala. – State Senator Cam Ward (R-Alabaster) is working with federal and state lawmakers on a new, major criminal justice reform initiative.

On Wednesday, Prison Fellowship, the nation’s largest outreach program to prisoners and their families, announced the launch of the Faith & Justice Fellowship, a bi-partisan coalition of state and federal lawmakers motivated by various faith traditions to pursue restorative values in criminal justice reform.

Senator Ward was named a State Leader for the Fellowship’s campaign in Alabama.

“Any efforts aimed at helping the victims of crimes and rehabilitation of offenders must include a faith-based component,” remarked Ward. “While criminal justice reform must always keep public safety first, we cannot ignore the need for proper rehabilitation in the prison system.”

“I am proud to join this distinguished group of state and national lawmakers in kicking off this nationwide fellowship to promote best practices in our corrections system. Though Chuck Colson is no longer with us, his organization continues on today, making even greater strides with the announcement of Faith & Justice Fellowship,” continued Ward.

According to Prison Fellowship, the mission of the Faith & Justice Fellowship is “to build, inform, and inspire a movement of policymakers and voters who believe that human dignity and redemption should be represented in our national dialogue on criminal justice.”

The founding federal leaders of the Faith & Justice Fellowship include: U.S. Sen. Richard Burr, N.C.; U.S. Sen. John Cornyn, Texas; U.S. Rep. Danny Davis, Ill.; U.S. Rep. Randy Hultgren, Ill.; U.S. Sen. Mike Lee, Utah; and U.S. Sen. Thom Tillis, N.C.

In addition to Senator Ward, state leaders include: State Sen. Konni Burton, Texas; Lt. Gov. Brian Calley, Mich.; State Rep. Rob Hutton, Wis.; State Rep. Matt Krause, Texas; State Del. Dave LaRock, Va.; and State Sen. John Proos, Mich.

 

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Ward Honors USS Chilton at Jemison Veterans Event

USS CHILTON PROCLAMATION

 

Whereas citizens of Chilton County Alabama have served with honor and distinction as members of the Armed Forces of the United States of America; and

 

Whereas 106 residents of Chilton County gave their lives in service to the United States and their fellow citizens during the First World War, the Second World War, Korea, Southeast Asia, Lebanon and Iraq; and

 

Whereas members of Chilton County’s Greatest Generation responded to the call to service during the Second World War; and

 

Whereas, 53 residents of Chilton County sacrificed their lives in service to the United States and their fellow citizens during the Second World War; and  

 

Whereas civilian residents of Chilton County supported the effort to defeat the Axis Powers thorough numerous community activities, especially the purchase of War Savings Bonds; and 

 

Whereas the citizens of Chilton County were honored for their efforts by having a Bayfield Class Attack Transport Ship named in their honor; and

 

Whereas APA-38 was commissioned the USS Chilton on 7 December 1943; and

 

Whereas the USS Chilton and crew served with honor and distinction as Flag Ship of Transport Squadron 17 in support of military assault operations during the invasion of Okinawa and evacuated casualties from that combat zone; and 

 

Whereas the USS Chilton and crew survived multiple direct hits by Japanese kamikaze aircraft during this engagement; and

 

Whereas the USS Chilton and crew continued to serve with honor and distinction following the war, participating in support of the Bay of Pigs Operation, the blockade of Cuba during the Thirteen Days of October 1962, and as a member of Task Force 180 in  support of the Apollo 10 space mission; and 

 

Whereas the USS Chilton was decommissioned in July 1972 after three decades of service to the citizens of the United States of America; and

 

Whereas the Commissioning Bell of the USS Chilton is the sole remaining artifact of this proud vessel;

 

Be it proclaimed that the Commissioning Bell of the USS Chilton is hereby dedicated in honor of those citizens of Chilton County Alabama who have served in the Armed Forces of the United States of America and especially those who made the ultimate sacrifice on behalf of the United States of America and their fellow citizens.   

 

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Police Jurisdiction Bill Could Lower Taxes

Legislation clarifying the police jurisdiction of municipalities passed the Alabama House of Representatives by a 77-9 vote in the final hours of the legislative session. 

SB 218, sponsored by Sen. Cam Ward, R-Alabaster, establishes a three-mile police jurisdiction beyond corporate limits for municipalities with populations of 6,000 or more and one and one-half miles for towns with fewer residents. David Cole of the Alabama Farmers Federation said the bill builds on legislation passed last year which limits the ability of local governments to tax and regulate property far outside corporate limits.

“This legislation will provide clarity and consistency to the way police jurisdictions are established while giving local governments the ability to adjust those boundaries based on future needs,” said Cole, the Federation’s House Legislative Programs Director. “We appreciate the members of the House of Representatives working to ensure final passage of this bill in the closing minutes of the session.”

After the law is enacted, any extension of police jurisdiction as a result of annexation would require a vote of the municipal governing body. Cities with a three-mile jurisdiction, however, would be allowed to reduce their enforcement area to one and one-half miles.

The bill also states when any noncontiguous property is annexed, the municipality shall not exercise any jurisdiction or authority, including the assessment of any tax, outside the corporate limits.

Gov. Robert Bentley signed the bill into law.

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Budget Funds Essential State Services

The Alabama Legislature is nearly two-thirds of the way through the 2016 regular session. While the Legislature is considering a number of bills, the only constitutionally required duty of the Legislature is to pass budgets for both the Education Trust Fund and the General Fund (the budget for all non-education state spending). 

The Legislature fulfilled part of its constitutional obligation by passing a $1.8 billion General Fund budget. There has been some criticism leveled at the budget, which I will address, but first I want to describe how the General Fund budget was put together.

Before the session began, lawmakers held a series of intense, public budget hearings with every major state department. We were determined to take a new approach to budgeting your taxpayer dollars. This new approach, called zero-based budgeting, requires state agencies to prove from the ground up each line-item request, and forces legislators to ask hard questions and carefully examine each department’s spending habits. 

It established a sound financial precedent for future Alabama legislatures. Requiring each agency to make a rigorous, line-by-line, case for their budget means agencies must prove to lawmakers that the agency’s mission and programs are still an essential function of government. In other words, the pressure is now on the state agency to prove why it should continue to receive taxpayer money. 

The reform and downsizing of government can only happen by focused intentionality. Left to its own devices, a state agency will drift from year to year, treating its budget request as a birthright owed instead of a case to be proven. 

So, here are some details on the Legislature’s $1.8 billion GF budget. The budget slightly increases funding for Public Health, National Guard units, Corrections, and the Department of Human Resources. Most other state agencies were level funded, while the budgets for some like the Department of Labor and the Department of Finance were cut. A massive outbreak of tuberculosis in rural west Alabama meant Public Health needed every bit of its $10 million increase..  

By far, the most difficult challenge for state lawmakers continues to be the behemoth of Medicaid, the federally-mandated health insurance program for children, the elderly, the disabled, and the pregnant. More than one million Alabamians are on the Medicaid rolls, and the program consumes nearly 40% of the budget. For the upcoming fiscal year alone, the Legislature allocated $700 million for Medicaid, an increase of $15 million over last year.  

Many have said Medicaid’s funding must be increased even more so that Alabama can access additional federal matching dollars and finish implementing the reforms we passed a few years ago. Yet the options for increasing Medicaid’s budget by an additional $85 million – via new taxes, or moving money from the Education budget- are not palatable to most people or the Legislature.  

The Legislature has done its duty in passing an austere General Fund budget that avoids new taxes and prioritizes funding for the agencies that need it most. Medicaid still is a problem but we have to reign in where the money will come from to pay for it. 

 

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