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Lottery ‘on life support’ in Alabama legislature, budget fix still up in the air

Alabama State House (Photo: Creative Commons/Jay Williams)
Alabama State House (Photo: Creative Commons/Jay Williams)

RELATED: Bentley’s lottery panic is a sham. Here’s how Alabama can pay its bills without it.

MONTGOMERY, Ala. — Lottery proposals in the Alabama legislature appear to be having a tough time gaining momentum, as lawmakers wrestle with how to patch an $85 million hole in Medicaid funding. The program provides healthcare to approximately 1 million Alabamians.

Competing lottery proposals have struggled to garner widespread support, but pro-lottery senators have threatened to hold up other budget-related bills if a lottery proposal is not given a vote, according to Yellowhammer sources.

“I plan on voting [a lottery] bill after lunch today,” Senate President Pro Tem Del Marsh (R-Anniston) told reporters.

Multiple senators Yellowhammer spoke with Thursday morning said they do not envision any lottery proposal garnering the three-fifths vote (21 out of 35) needed to make it onto the November ballot as a Constitutional Amendment.

“The lottery is on life support,” said one senator, who spoke on condition of anonymity because he did not want to antagonize his pro-lottery colleagues. “I don’t see any scenario right now where a lottery passes. The reality is it just doesn’t have the votes.”

In the House, state representatives passed a bill that would allocate money from the state’s BP oil spill settlement to pay down debt, cover the shortfall in Medicaid, and fund infrastructure projects on the gulf coast.

The bill, sponsored by General Fund Budget Chairman Steve Clouse (R-Ozark), would use BP money to pay back $448.5 million in state debt, free up about $35 million for Medicaid, and send the rest of the money — about $191 million — to the coast for road projects.

Governor Bentley is currently sitting on $35 million from BP’s Fiscal Year 2016 payment to the state, so combining that with Clouse’s bill would ultimately make about $70 million available for Medicaid.

The State Medicaid Agency responded to cuts earlier this year by reducing reimbursements to doctors back to 2013 levels, which was before ObamaCare implemented a “fee bump.” That decision saved the state roughly $15 million, meaning that the $70 million made available in Clouse’s plan would cover the remaining shortfall.

The BP bill is on the back-burner in the senate, however, until a lottery proposal is given a vote.

A joint Republican caucus meeting on Wednesday also revived discussions about un-earmarking.

The state of Alabama earmarks an unprecedented 91 percent of its tax revenue, meaning state lawmakers are only in a position to allocate 9 percent of the state’s resources each year. As a result, an $85 million shortfall — about .003 percent of the state’s total budget — can be turned into a crisis.

There is very little support for diverting education dollars to patch the hole, but there is a growing sentiment that General Fund dollars should be freed up.

Alabama’s General Fund Budget is approximately $1.85 billion, but there is another approximately $3.6 billion that flows into General Fund agencies, but is earmarked to go to certain places and therefore cannot be utilized by lawmakers.

“There are a lot of agencies who don’t even have to justify their existence because they’re going to get their earmarked money no matter what,” one lawmaker explained on condition of anonymity because he was not authorized to discuss caucus conversations with the press. “It’s time for them to have to justify the millions of taxpayer dollars that they’re swimming in. There’s no incentive for these agencies to cut waste. That has to change.”