By State Auditor Jim Zeigler
As I give reports to the people about what is going on in Montgomery, too often I have to bear BAD NEWS. Today, is an exception. I bring very GOOD NEWS from Montgomery.
A solution has surfaced for the reported shortfall in the state’s Medicaid budget.
On Tuesday, the House Ways and Means General Fund Committee favorably reported a compromise bill to distribute the approximately $850 million dollars from the BP oil spill settlement. The compromise may be debated on the House floor today and could be voted on this week.
The compromise frees up $70 million for the October 1st general fund. That just happens to be the amount Medicaid now needs for the next fiscal year.
This fact, that the BP compromise can make Medicaid whole, is not generally known and has not yet affected the special session. It will. Shortly.
The BP settlement does not give Alabama a lump sum but rather an annual payment for the next 17 years. To turn those annual payments into a lump sum, the compromise authorizes a bond issue of $639 million, which would be paid off over 17 years by the BP payments.
The compromise allocates $448 million to repay debts owed to the Alabama Trust Fund. It allocates $191 million to Baldwin and Mobile Counties — the counties most directly affected by the oil spill.
Paying off the debt to the trust fund frees up $70 million this year that will not be needed to pay toward that debt.
That $70 million of extra available money just happens to be the amount that Medicaid now says they are short.
Sure! We keep hearing Gov. Bentley talking about a need for $85 million. We’ve also heard about “horrific cuts.” I have two further items of good news.
First, the $85 million shortfall is now only $70 million. Second, the “cuts” that we’ve heard about from Gov. Bentley were, in fact, a simple rewind of the so-called Affordable Care Act, otherwise known as Obamacare. They were not pure “cuts.”
In 2013, Alabama doctors who accept Medicaid received a raise called “a bump” which was then mandated by Obamacare. Time has proven Obamacare to be a failure and un-affordable to both states and citizens. While its architects are now crafting another idea for single-payer healthcare, the “bumps” are no longer mandated.
On August 1st, Alabama Medicaid decided to smooth out the bumps. No doubt, it hurts Medicaid doctors who got used to the 2013 bump but, it saves Alabama about $15 million, which means that Medicaid needs only $70 million.
Governor Bentley’s special session calls on legislators to address the Medicaid shortfall, and your representatives convened in Montgomery on Monday.
The Governor says our state has a choice — either approve a lottery or else children will die due to Medicaid cuts. These are NOT the only two options.
“Approve a lottery or children will die” is a false dilemma and an irresponsible claim.
I suggest a sine die solution, not a children die false claim.
Pass the BP compromise, freeing up the amount Medicaid needs. The legislature can then adjourn permanently, ending the special session. This is called adjourning sine die.
I have heard from constituents and legislators alike wondering why the need for a special session costing taxpayers $350K — wishing legislators had not been called to Montgomery in the first place — and disgruntled about having to work through complicated budgeting problems in such a short period of time and on such short notice.
Like every state and every family, Alabama has governing problems, spending problems, and budgeting problems. It is imperative that we put our nose to the grindstone, do the tough clean-up work, and formulate some solid, real, and long-lasting solutions for the budget. This takes time and effective executive leadership, two things we are short of this month.
Passing the BP compromise, leaving $70 million for Medicaid, and adjourning sine die will avoid a mad rush to beat the August 24th deadline to get a lottery onto the Nov. 8 ballot. This will avoid making mistakes in rushing into a quick fix for a serious long-term problem. The legislature can then come back in February better prepared to take on the hard questions.
Good news from Montgomery
