House committee approves General Fund budget

The House Ways and Means General Fund committee Wednesday approved a $3 billion General Fund budget that would provide broad funding increases for most state agencies.

HB 124, sponsored by Chairman Rex Reynolds, R-Huntsville, is a “good, sound budget for Alabama,” he said.

The total increase of about $15 million from the Gov. Kay Ivey’s recommendation is due to projected cost increases from the Legislative Fiscal Office, Reynolds said.

The total expenditure from the State General Fund is just over $3 billion, which is only about $15 million more than what the Governor recommended. It is an increase of about $169 million (6%) over the current $2.86 billion budget.

The General Fund benefited from a $150 million increase in revenue from rising interest rates. Other tax collections have increased by as much as $50 million, Reynolds said.

State Finance Director Bill Poole said that the proposed budget is in line with what the Governor recommended, and that their revenue estimates were just slightly different.

“[The House] budget is conservative, and that it doesn’t anticipate a large continuation of revenue growth,” Poole said.

Poole also said that the budget also considers that the economic growth seen in the last year may not continue into the next fiscal year. While the budget passed is larger than the year before, the increases are largely due to one-time expenditures.

The proposed budget would allocate about $662 million to the Department of Corrections, or a $59 million increase (10%).

The Department of Public Health could receive about $112 million, a $36 million increase from the previous year (47%). The allocation was slightly higher than what the Governor recommended.

The Department of Human Resources would see a $14.4 million increase from the previous fiscal year. The proposed budget would allocate about $122 million, roughly a 13% increase over the current year. Some of that increase would be used to create placement spots at Freedom Farm, which supports children and young adults in crisis or need help and support, such as aging out of foster care.

The proposed budget would also allocate $863 million to the Alabama Medicaid Agency. The Medicaid Agency received about $794 million last fiscal year. The money chiefly goes to matching federal funding for the program. The federal government pays most of the cost of the Alabama Medicaid program.

The Department of Mental Health received a bump in the proposed budget. The department would receive about $209 million, which is an increase of $4.5 million from the Governor’s recommendation. The 8% in increased funding from the previous year would go largely towards community mental health centers and increased rates for community providers.

The Board of Pardons and Paroles would receive a slight increase from the previous year, from $82.6 million to $87.5 million, a 6% increase.

Poole said that while the Legislature is spending more money now, he said the budget can be brought back down in case of a recession or if the federal government lowers interest rates.