Alabama Senate committee approves ARPA spending plan, with some changes

An Alabama Senate committee Wednesday approved a House plan to spend $1 billion in American Rescue Plan Act funds, though with a few tweaks.

Lawmakers on the Senate Finance and Taxation General Fund committee approved the bill, HB1, after adding an amendment from Sen. Chris Elliott, R-Daphne, that would add stormwater projects to the infrastructure funded under the bill.

“When you are spending a billion dollars, you are not going to satisfy everybody,” said Sen. Greg Albritton, R-Atmore, the committee’s chair. “Like I always tell folks, there is only enough money to make more people mad than happy.”

The House bill, which the lower chamber approved on Tuesday, would allocate up to $400 million for water and sewer projects; up to $260 million for broadband, and up to $100 million each for hospitals and nursing homes to address expenses from the COVID-19 pandemic.

The original bill provided all of the $400 million to water and sewer projects. Elliott’s amendment would allow up to $200 million of the water and sewer money to be used for stormwater projects. Of that total, $100 million would go to projects where a local government can match 35% of the cost.

“I think we are going to have a lot of infrastructure going into the ground for clean water and drinking water,” Elliott said in an interview after the meeting. “We are going to need to spend this money, and this money is going to have to be spent by 2026. To do that, we are going to need other types of projects. Counties and cities know how to do stormwater projects, and I think they can get those projects on the ground quickly. This allows the expenditure of those funds in a quicker manner.”

The Alabama Department of Environmental Management will oversee the distribution of the money, using a ranking system. ADEM is also overseeing about $225 million in ARPA money for water and sewer projects that the Legislature approved last year.

Elliott’s district is in Baldwin County, one of the fastest growing areas in the state. The senator criticized ADEM’s handling of the first round of ARPA funding at a budget meeting last month, saying his area received “no funding, zero projects.”

Elliott said Tuesday he believed the match requirement would be an efficient way to use the funds.

“It stretches the money out further, and I think that is good for everybody, so it stretches it out even further and requires those communities to provide that match do so,” Elliott said.

The bill moves to the Alabama Senate for a vote, which could come as early as Thursday. Rep. Rex Reynolds, R-Huntsville, the sponsor of the bill in the House, said Tuesday that Senate amendments could delay final passage until Friday.

Three senators abstained from the vote. Sen. Larry Stutts, R-Tuscumbia, said he wanted to see more money go to individuals.

“We gave a bunch of money to the (Alabama) Hospital Association, to the (Alabama) Nursing Home Association,”
he said. “What about all the small businesses that were closed? What about all the truckers who saw the price of diesel double in the pandemic? There are just some other groups that I would rather see targeted that I think were hurt significantly by the pandemic.”

Orr said he wanted more money to go to education, in particular reimbursement for the Public Education Employees Health Insurance Plan (PEEHIP).

Stutts said he may raise his issues up on the floor. Orr said he is looking at alternatives to deal with the issue he brought up.

The money probably will not cover all needs in the state. ADEM’s first round of water and sewer money was oversubscribed. The Alabama Hospital Association said last week that while the $100 million would be welcome, it would not be enough to address all the issues distressed hospitals face from the pandemic.

“It wasn’t an easy decision,” Albritton said Wednesday. “It was being argued as late as 8:15am. It was the best we could do with the circumstances that we had.”