On Thursday, the Legislature passed, and the Governor signed both bills, which were the objectives of the First 2023 Special Session. As the Governor requested in her state of the state speech on March 7, the Legislature appropriated $1,060,000,000 in American Rescue Plan Act (ARPA) funds in House Bill 1. The Legislature also appropriated money to finally repay the money borrowed from the Alabama Trust Fund (ATF) to make up for a shortfall in the state general fund (SGF) during the Great Recession.
“It’s been our responsibility at the state level to appropriate this $1.1 billion for the benefit of the people of Alabama,” said State Senate President Pro Tempore Greg Reed. “We have been able to move through that process this week. All the membership has been very involved and engaged.”
Priorities included investing in sewer and water infrastructure, broadband internet expansion, and supporting hospitals, nursing homes, and other health care providers across the state.
“One of the things that we wanted to look at, of course, was hospitals, nursing homes, those that were providing care during the pandemic, which was very important. They had a lot of reimbursable requirements,” Reed explained. “Also looking at water, sewer projects. Basically, if you’re looking to invest in Alabama, you’re trying to put infrastructure in the ground that’s going to be there for the next 30, 40, 50 years. That is going to be very important for the people of our state. We did that in the first round of ARPA. We are doing that again. There is going to wind up being hundreds of hundreds of millions of dollars of infrastructure investment in our state.”
The plan allocates $400 million to water and sewer projects, $339 million to healthcare costs, and $260 million to expand access to broadband internet. The remaining $55 million in funding will be eligible for those that serve food banks, child welfare, long-term housing, victims of domestic violence, mental health disorders, and senior citizens.
The healthcare funding will be divided to include $100 million for hospitals, $100 million for nursing homes, $5 million for state veterans’ homes, $40 million for the state employees’ health insurance program, and $40 million for the public education employee’s health insurance program. Mental health services will receive $25 million, while $9 million will promote telemedicine. $20 million will go to a voluntary clinical trial and healthcare research program.
“Broadband internet access, which is a huge issue for Alabamians. Trying to make sure that everybody across that state can access the internet,” Reed said. “That helps us in quality of life, but also as far as topics of economic development and healthcare with telemedicine; and of course, as we learned during the pandemic, our children’s education sometimes needs to be done from home, and that gives us the opportunity to grow that opportunity as well. We worked diligently to make sure this is a bipartisan effort. There are elements all across Alabama, no matter where you are, that will benefit from these ARPA funds.”
“I make it my business to work closely with my colleagues in the Minority Caucus,” Reed stated. “I have a great friendship with Senator [Bobby] Singleton, who is my minority leader. He and I are great buddies. We work closely and carefully together. This is a topic, sometimes we disagree, as you would expect, but in this instance, there was a lot of collaboration, cooperation where we thought Alabama would benefit the most in being able to use them the most, so I am proud of that.”
The Senate amended the House version of the bill to allow a portion of the money for water and sewer projects to be used for stormwater drainage projects. Of the water and sewer funds, up to $100 million are to be awarded based on a ranking system established by the Department of Environmental Management that includes a factor for the water and sewer needs of growing communities.
State Senator Greg Albritton chairs the Senate Finance and Taxation General Fund Committee and carried both bills in the Senate.
“We believe that we have allocated these funds to the best of our ability at the guidance of the Federal government,” said Albritton. “Water and sewer, broadband expansion, and healthcare were the backbone of this round due to no lost revenues. Our foremost intent was to make smart and intuitive investments in these critical infrastructure areas that will pay dividends for generations to come.”
The Legislature passed Senate Bill 1, which transfers $59.9 million from the SGF budget to the ATF. The ATF was created as a ‘rainy day’ account to be used only in times of fiscal crisis and is funded by royalty payments that are received monthly from oil and gas companies. In 2012, the ATF transferred $437 million to the SGF to help with proration. The financial crisis that the Alabama Legislature found itself in after the Great Recession decreased SGF revenues by $300 million a year.
“During those years, amid a national recession, we had a significant shortfall in funds,” Albritton explained. “It was the Legislature’s responsibility to fill the gap of the General Fund and keep Alabama operational. To overcome these critical shortfalls, the Legislature went to the Alabama taxpayers to seek their approval through a constitutional amendment to authorize the use of monies from the Alabama Trust Fund.”
In 2013, the Legislature took action to repay the debts with The People’s Trust Act which implemented a schedule of repayments of the amounts transferred from the ATF. With the assistance of the Deepwater Horizon BP Settlement Funds and the State of Alabama’s annual disbursements, the total amount repaid to the ATF to date is $377.3 million. This one-time appropriation from surplus general fund dollars from the fiscal year 2022 will pay off that debt.
“This final payment to the Alabama Trust will make us ‘debt-free’ and fulfills our obligation to the citizens we represent,” stated Sen. Albritton. “When this money was initially borrowed, we made a promise and commitment to pay it back. I am glad to say that due to our fiscal conservative nature, repayment is final and complete.”
“In the early years of my Senate tenure, Alabama was in a critical place,” Reed said. “We borrowed nearly half of a billion dollars just to sustain government function. It was then up to the Legislature to execute hard-working and conservative fiscal measures to dig ourselves out of this hole. Now that we have the available funds in our budget surplus, it is our responsibility and duty to pay off our bills. I am confident that our House members will recognize this opportunity, as well, as we strive to be effective and honest stewards of state funds.”
This $59 million from the State’s General Fund is separate from the $1.05 billion in American Rescue Plan Act (ARPA) funds.
Gov. Kay Ivey signed both bills on Thursday and praised the Legislature for a successful special session.
The 2023 Regular Legislative Session will resume on Tuesday, March 21.
To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
