Dissecting Alabama’s General Fund Budget

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The state’s new budget year starts October 1 and agency leaders have to figure out how to work within the austere general fund budget passed by lawmakers in a special session last week. The budget provides level funding to key departments such as prisons, Medicaid, law enforcement, and mental health. Most others face cuts of at least 6 percent.

For an overview we turn to Thomas Spencer, a senior research associate at the Public Affairs Research Council of Alabama. PARCA is a nonpartisan think tank focused on Alabama government.

Spencer says it’s actually hard to know specifically what effect budget cuts might have on any given department.

“Medicaid, prisons, and education had strategic plans in place,” said Spencer. He says that allows lawmakers to make budgeting decisions for those parts of state government within an existing framework. That kind of planning doesn’t happen with other general fund agencies.

“We spent a lot of time [in the special session] with proposals coming from left and right about what to close and what to eliminate,” said Spencer. “They weren’t really based, in a lot of cases, on good solid information or well-thought-out plans.”

Instead state leaders have to wait for the fiscal dust to settle to figure out what new the budget will mean for state services. Still some things are known.


Reform Efforts

Lawmakers passed a package of prison reform measures earlier this year aimed at reducing the number of inmates in Alabama prisons. State prisons hold almost twice the number of inmates they were designed for leaving Alabama vulnerable to a federal takeover of the system. Prison reform advocates feared a budget crunch would mean no money to actually implement changes.

Spencer says there is money to start prison reform efforts – a down payment he calls it.

“We are going to be able to add pardons and paroles, for instance,” said Spencer. “Which is very important since we are going to be continuing to rely more on community corrections instead of warehousing people in prisons.”

Meanwhile the Medicaid program is going through its own transition. State health leaders are breaking up control of the system into “regional care organizations.” Proponents believe this will save Medicaid money over the long term.

“It’s moving more toward a managed care arrangement,” said Spencer. “Keeping people well rather than treating them when they’re sick.”

Spencer says state health officials are trying to see how much of that conversion they can accomplish under the new budget.


Coming Up Short

Many state agencies are dealing with fewer dollars. For instance, the state parks director warned earlier this year of park closures if cuts were enacted. The spending plan does transfer $3 million that would have gone to the park system to the general fund, but it is not as severe as some proposals under consideration.

“It’s not going to be Armageddon, but there’ll still be effects felt,” said Spencer.

The Alabama Department of Environmental Management took a hit. In fact Spencer says the agency receives almost nothing from the general fund now and instead depends on permits and fees for revenue. He says ADEM leaders are looking to increase fees to make up the cut. They did the same thing after cuts three years ago.

They are worried their funding struggles could prompt involvement from the Environmental Protection Agency.

“If they don’t have enough inspectors to meet the EPA’s expectations, the federal EPA could come in and take over regulation of state environmental [management],” said Spencer.


A Better Way to Budget

Thomas Spencer says the Public Affairs Research Council of Alabama has advocated that the state adopt what’s called performance-based budgeting. Essentially that means lawmakers would identify policy goals, figure out a strategy to achieve them, and then craft a budget based on that strategy. Programs that didn’t produce the intended results would be scrapped or reworked.

Spencer says instead the budget discussion centers on plugging holes or protecting revenue streams for particular interests.

“If we moved in that direction [toward performance-based budgeting], I think we’d be better off as a state,” said Spencer.


Photo by StockMonkeys.com

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