The Alabama Legislature began what is expected to be a highly charged Session with numerous controversial and impactful bills set to be debated. Both the House and the Senate used three out of their maximum 30 legislative days last week. In a shift from previous Sessions, there will be two legislative recess weeks in March. These are currently scheduled for the weeks of March 11 and March 25. The Legislature must conclude its Regular Session no later than May 20.
Governor Ivey’s State of the State
Gov. Ivey announced at Tuesday’s State of the State that her number one legislative priority is a large-scale expansion of school choice for Alabama students. Filed as SB61 by Sen. Orr and HB129 by Rep. Garrett, the Creating Hope & Opportunity for our Students’ Education (CHOOSE) Act would provide up to $7,000 per child enrolled at an accredited participating private or public school through an education savings account funded by a refundable income tax credit. Families who homeschool would be eligible for up to $2,000 per homeschooler, with a cap of $4,000 total, for eligible educational expenses. Eligible expenses would include, in part, tuition at participating schools, private tutoring, educational software, and fees for summer education programs. Starting in 2025, the first two years would focus on lower-income families and students with disabilities before being fully open to all students and families in 2027. The price tag would be no less than $100 million annually, and the first year’s (2025) allocation would be provided by supplemental education funding, which would have no immediate impact on the Education Trust Fund. Critics have suggested those already homeschooling or paying private school tuition will draw money out of the Education Trust Fund, while supporters point out that Alabama’s per pupil spending has increased significantly in the last decade while test scores and achievement have remained relatively flat.
Once again, the Legislature will try to pass a constitutional amendment allowing for casino gaming, lottery, and sports betting in Alabama. Gov. Ivey endorsed the idea of allowing Alabamians to vote on the issue this November. A constitutional amendment (CA), HB151, seeks to authorize gaming in the state, and an implementing bill, HB152 would create and organize the Alabama Gaming Commission to oversee implementation and compliance of gaming in the state. Both bills are sponsored by Rep. Chris Blackshear. If approved by voters, and unless changed by the Legislature with additional legislation, the CA would authorize an official state lottery, casino-style games played only in person, sports wagering, traditional raffles, and traditional bingo. The CA limits the authorization to seven total gaming establishments. It also requires the governor to negotiate a compact with the Poarch Band of the Creek Indians to allow Class III gaming (i.e., table games, at the Poarch Creek facilities currently in operation) as well as provide an additional site for the Poarch Creeks to develop, likely in north Alabama. HB152 has set the tax of the casino games at 24%, with the first $300M going to fill the General Fund Budget Reserve Fund and later, once the fund is full, 95% to the Gaming Trust Fund with 5% split between counties and cities in which the gaming establishments are located. The Gaming Trust Fund can be used, with the Legislature’s discretion, to support mental health care, a public-private style of Medicaid expansion under the Affordable Care Act, bonuses to state employees, drug courts, and infrastructure, among other non-recurring costs. The partial Medicaid expansion is likely included to secure Democratic support in the House, but Senate General Fund chairman Greg Albritton, and most of the Senate GOP caucus, has been long opposed to expanding Medicaid to otherwise able-bodied individuals.
The distribution of the lottery proceeds is set to primarily establish a scholarship program for the two-year community and technical college system, gaming addiction treatment centers and programs, dual enrollment, and other education-related spending for public schools and four-year colleges.
Lastly, the gaming legislation would also allow establishments operating under the 18 constitutional amendments in various counties across the state to operate through the end of 2026.
Gov. Ivey also touched on workforce development in her address. Alabama’s labor participation rate is 57%, well below the nation’s average. Along with Lt. Gov. Will Ainsworth who has given significant attention to this issue as well, there appears to be a focus on better coordinating and streamlining Alabama’s workforce development apparatus as well as improving access to childcare, housing, and transportation. One suggestion offered by Ainsworth’s Commission on 21st Century Workforce is to consolidate the Department of Commerce’s Workforce Development Division, AIDT, and the Department of Labor into a new Alabama Workforce Authority to be led by a cabinet-level Secretary of Workforce Development. Others include a workforce housing tax credit, which would have a multi-billion dollar economic impact throughout the state, and a childcare tax credit for parents, providers and employers.
The good news: Alabama still has ample money to fund growth in both budgets. The bad news: the revenue increases are quickly slowing down.
Budget officials expect the Education Trust Fund (ETF) to grow about $550M this fiscal year to a total of $9.3B, while the General Fund is expected to grow about $346M to $3.361B. Much of the increase in the General Fund will likely flow to one-time capital needs, Medicaid, and Alabama’s prison system. The increases in the ETF are likely to head to more targeted K-12 funding for the Literacy Act, which begins full implementation this year, turnaround schools, and raises for teachers. Budget officials expect the budget growth to slow considerably in the coming years due to inflation, economic concerns, and the decrease in federal stimulus dollars working its way through the state’s economy.
Bills to Watch
HB61 – This bill, by Rep. Chip Brown, requires state contractors to certify that their employees will not be subject to a personal Environmental, Social and Governance (ESG) rating as a basis of hiring, firing, or evaluation. A personal ESG rating would include a measurement of an individual’s transportation habits, environmental impact, recycling habits, energy usage and other similar matters.
SB37 – Sen. Allen has filed a bill that would include vaping under the definition of smoking, thereby banning it in most public places and at public meetings.
Bills currently being tracked by our legislative team include:
|Public contracts; ESG criteria prohibited in public contract. (State Government)
|House • Jan 30, 2024: Pending Committee Action In House Of Origin (State Government)