Alabama Senate approves lottery bill, action moves to the House next week

MONTGOMERY, Ala. — The Alabama Senate on Friday evening approved a lottery bill after spending most of the week debating and rejecting previous lottery proposals.

The bill, which was approved by a margin of 21-12, would send $100 million of lottery revenue each year to Medicaid, which is facing a $70 million shortfall this year, followed by 10 percent of the revenue to the Education Budget and the rest to the General Fund.

Advocates of the bill called it the “cleanest” lottery proposal they had considered this session, but it still faces an uncertain future as it moves down to the House.

The House earlier this week 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 Senate will consider the bill next week.

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.”