‘Heavy lifts.’ Gas tax, lottery, teacher pay raises are issues to watch in 2019 legislative session

‘Heavy lifts.’ Gas tax, lottery, teacher pay raises are issues to watch in 2019 legislative session

By MARY SELL and TODD STACY, Alabama Daily News

MONTGOMERY, Ala. – Gov. Kay Ivey’s first legislative session since winning a term in her own right will feature a laundry list of contentious issues when it begins Tuesday.

On the top of that list is Ivey’s proposal to raise the state’s gas tax to pay for improving roads and bridges, which could be one of the first votes the GOP-led Alabama Legislature will be asked to take.

Ivey’s infrastructure plan will be the predominant issue of the 15-week session. Advocates for the first statewide gas tax increase since 1992 say bad roads are dangerous, cause costly congestion and hinder economic development, but its passage is not a sure thing in the 140-member Legislature where 41 members are new this year.

Other potential high-profile bills include a proposal for a statewide lottery, a likely teacher pay raise and continued attempts to address the state’s understaffed and aging prisons.

In a recent interview with Alabama Daily News, Ivey said she knew that confronting difficult issues was going to be necessary when she decided to run.

“When I was trying to wrestle with the idea of even making a race for governor, I had to face the fact that our state has some very difficult challenges and needs,” Ivey said.

“Because they’ve been, with the prisons and the infrastructure, neglected for years and years and decades. I knew if I was successful in running for governor, I was going to have to deal with those. And you don’t look forward to dealing with difficult things, but that was one of the soul searching questions that I had to answer for myself. Was I willing, if I was going to run for governor, would I be willing to take on the high priority needs that the state has because of neglect by others through the years.

“And it was a hard decision for me to make because we have some heavy lifts.”

Here are some of the issues to expect in the legislative session, which convenes March 5.

Infrastructure 

Ivey and legislative leaders are proposing increasing the state’s tax on gasoline and diesel fuel by ten cents per gallon. The increase would happen gradually, spread over three years and then indexed thereafter to increase no more than one cent every two years to keep up with inflation and rising construction costs.

Some lawmakers recently said their support of the legislation will depend on what’s in it for their districts. When fully implemented, the increase is expected to generate more than $300 million a year.

Legislative text of Ivey’s proposal was released Friday after the governor joined city and county leaders from around the state who are supporting plan, dubbed “Rebuild Alabama.” The event included Huntsville Mayor Tommy Battle and Tuscaloosa Mayor Walt Maddox, both of whom challenged Ivey in the 2018 election.

According to the bill, two thirds of all new revenue would go to fund state road projects, while 25 percent would be directed toward county road projects and 8.33 percent would be dedicated to city projects. The division of new revenue between counties and cities has been a sticking point in previous gas tax proposals, but both the Alabama League of Municipalities and the Association of County Commissions of Alabama are supporting Ivey’s bill.

“At the end of the day, I don’t think cities and counties are going to kill an opportunity to get more revenue,” Senate President Pro Tem Del Marsh, R-Anniston, said recently.

Some lawmakers have said before the tax is increased, the state should stop redirecting $63 million a year from the Alabama Department of Transportation to give to other state agencies. Ivey said on Friday that the budget she will submit to the Legislature cuts cuts that amount in half.

“I have cut that amount of diversion in half in my budget,” the governor said. “But we’re still going to protect the courts and we’re still going to protect ALEA (the Alabama Law Enforcement Agency).

Others have noted that despite pleas about road needs, only 27 of the state’s counties raised their own gas taxes to pay for local improvements, leaving the burden of voting to increase taxes to elected officials in Montgomery. The Alabama Constitution bars counties from enacting tax increases without approval of the Legislature and a vote of the people.

The bill will start in the House where Speaker Mac McCutcheon wants it to move quickly.

“The bottom line is, if we do nothing, then there will be no opportunity for anyone,” McCutcheon, R-Monrovia, said. “I think that’s where we need to keep our focus.”

Ivey and McCutcheon shrugged off an Alabama Republican Party resolution to oppose the increase. Ivey told reporters she looks forward to dealing with “informed people” when the Legislature convenes.

The governor would not confirm that she was considering calling a special session to focus the Legislature’s attention on the gas tax proposal and removing procedural hurdles, but said “all options are on the table.”

Asked the chances of a gas tax bill passing this session, Marsh put it at 60 percent.

Prisons and criminal justice

After multiple attempts in recent years to get lawmakers to borrow about $800 million to build new prisons, Ivey is considering leasing several new facilities from a private company. That takes legislators out of the new-prison process, but they still have other work to do on the crowded and understaffed facilities.

“I don’t think we’ll have any say on construction,” said Sen. Cam Ward, R-Alabaster. He is the chair of the Senate Judiciary Committee and has sponsored most prison-related legislation of late.

That’s upsetting to some lawmakers, Ward said. Ivey’s tentative plans call for the closing of most of the state’s current large prisons.

“(Some lawmakers) want to dictate where the locations of the prisons are,” Ward said. “But that’s how we got in this mess. We have prisons based on not what’s good for criminal justice, but what is good for our districts.”

A prison lease bill was approved in the Senate two years ago but died in the House.

“Do I have some questions,” McCutcheon said about a lease proposal. “I need to do some more research.”

Meanwhile, the state is still trying to address a 2017 federal judge’s ruling that requires changes to mental health care and staffing. There is an immediate need for hundreds of new correctional officers in the existing prisons. Ward said that will cost an additional $40 million in the 2020 budget.

Alabama House Democrats have held a series of town hall meetings around the state in advance of the session. Minority Leader Anthony Daniels, D-Huntsville, said in urban areas of the state, criminal justice reform is the No. 1 priority of those attending the meetings.  The state has decreased its prison population though reforms, but more needs to be done, Daniels said, especially around bail reform and technical violators — those who return to prison not because of a new crime, but because they broke a parole rule. The state also needs to focus on helping inmates prepare to be successful after their release.

“Unless we do something, it will continue to be a revolving door,” Daniels said.

Ward is suggesting an additional $2.2 million on the $2 million the state spends on vocational training for inmates.

“It’s pennies,” Ward said of current funding. “We’re spending nothing on it.”

He also said it needs to be easier for former inmates to get driver’s licenses and occupational licenses — the state bars the previously incarcerated from hundreds of jobs.

“The key to keeping people out (of prison) is giving them some hope,” Ward said.

Lottery

Sen. Jim McClendon, R-Springville, will have two bills that, together, would create a lottery in Alabama and allow the state to participate in multi-state drawings like Powerball and Mega Millions.

The first bill will be a constitutional amendment allowing the lottery that would be put to Alabama voters on a statewide ballot.  They said no to former Governor Don Siegelman’s lottery plan in 1999.

But the constitutional amendment won’t say how the revenue from ticket sales — potentially hundreds of millions a year — will be spent by the state.

“I did not want to allocate the money in a CA and further earmark it,” McClendon said recently.

Allocation will be in the second bill. He’s recommending a 50/50 split between the General Fund and Education Trust Fund. That could be adjusted by lawmakers in the future.

McClendon said the legislation is “purely lottery” and allows no other gaming expansions. He hopes it will be ready by the time the session starts Tuesday.

Daniels said he didn’t disagree with the 50/50 split between the Education Trust Fund and General Fund.

“I think that’s fair, but there needs to be language in there that addresses funding for rural development,” Daniels told Alabama Daily News.

“You know, a lot of times when we do these things, we see it as a one-size-fits all approach. We’ve got to have more details to put something together that really helps.”

Budgets

The state’s General Fund budget, which feeds most non-education state entities, isn’t expected to be a major point of conflict this year.

“Most agencies should expect their 2020 funding to be the same as the current year,” McCutcheon said. The 2019 budget is about $2 billion.

“We’re very blessed that Medicaid did not ask for an increase,” McCutcheon said of the budget’s biggest expense.

Meanwhile, the state’s 2020 education budget is expected to be the largest ever at more than $7 billion.

Lawmakers will have a different challenge this year in deciding what requests from K-12, community colleges and four-year universities get that new revenue, Sen. Arthur Orr, R-Decatur, the chairman on the Senate education budget committee, said.

“There’s always additional requests, some are needs, some are wants,” Orr said. “Making the best decisions for the people will be our task.”

Among the requests is a $22 million line item from the Alabama State Department of Education for school security improvements. It would be the first time school security is directly funded in the education budget.

A pay raise for teachers is expected, but Orr couldn’t yet talk about what percentage it may be. On social media, the Alabama Education Association has said a 3 percent pay increase isn’t sufficient.

Education leaders are also asking lawmakers to make changes to the retirement plans of new teachers, allowing them to retire after 30 years, carryover their unused leave and increasing their benefits. Advocates say that will help address the state’s teacher shortage. Some lawmakers say they’re listening; Marsh and McClendon recently said taking on more retirement costs probably isn’t a good idea right now.

McCutcheon said there is concern about the lack of math and science teachers in the state.

Also, more money for the voluntary pre-kindergarten program is expected.

Education bills

They haven’t been filed yet, but Senate President Pro Tem Del Marsh, R-Anniston said some education reform bills are likely.

“My No. 1 issue is always education,” said Marsh, who has advocated for more school choice and increasing the state’s National Assessment of Educational Progress scores up.

“I’m looking at several things, Marsh said. “We’d like to come out with an education package.”

He also said legislation to end the election of county school system superintendents will be back this year. It would require that county superintendents be appointed, just as their city system colleagues are.

Rep. Terri Collins, R-Decatur, who chairs the Education Policy Committee in the House, said she is working on legislation that adds accountability to education funding dollars.

“I’ve had K-3 literacy legislation the last few years that tries to incorporate good professional development, accountability for the funding and ensure all the children in Alabama can read.  I’ve worked with many education stakeholders to get the bill right and hope to have it ready to file the first of session,” Collins said.

“I hope coordination with all of the stakeholders, along with the need to improve our 35 percent proficiency rate in reading. will be a priority for all of our legislators this session.”

Medicaid and health care

At the Democrats’ town halls in rural areas, health care was the No. 1 issue, Daniels said.

Six rural hospitals have closed in Alabama during the past eight years and another recently announced it will close, the AP reported recently.

Republican leadership in Montgomery has held firm for more than five years that the state can’t afford to expand Medicaid under the affordable care act, despite requests from health industry groups who say expansion — and the federal dollars it’d bring in — would benefit providers and the public.

Some GOP members of the Legislature appear to be softening their stances, according to recent media reports. But leadership isn’t eager to push the issue.

“There is no discussion of Medicaid Expansion at this time,” House Majority Leader Nathaniel Ledbetter, R-Rainsville, said recently.

Daniels said Democrats will always push for expansion. He said Republicans say a state gas tax increase is needed to leverage potential federal matching dollars.

“We have to take the same approach in other areas that will yield returns,” Daniels said.

Ethics and Economic Development

Lawmakers are likely to revisit change to the state ethics code, but whether those revisions will be big or small is yet to be determined. Attorney General Steve Marshall and Ethics Commission Executive Director Tom Albritton have convened several meetings of a special panel charged with recommending revisions to clarify certain parts of the ethics code that officials say are confusing and difficult to comply with.

One sticking point is the definition of a “principal,” or a significant figure within a business or organization that must follow strict guidelines on contact with public officials. Panelist debated different ways to clarifying that definition so that it doesn’t unnecessarily cause headaches for those with no real involvement in an organization’s dealings, such as those serving on a charity’s board of directors.

Another area of the ethics code lawmakers are likely to revisit concerns economic development. Last year, the Legislature passed a law to prevent a potential pitfall in the ethics code that state officials said could prevent Alabama from being considered for economic development projects. But that law was made to be temporary and expires on April 1.

The Alabama Jobs Enhancement Act exempts certain economic development professionals from being required to register as lobbyists with the Ethics Commission in order to approach the state about a potential industrial project. Supporters of the change argued that requiring site selectors for the likes of Hyundai, Mercedes and Toyota-Mazda to register with the government and disclose their confidential clients would spook away potential projects.

The bill was revised multiple times and was subject to intense scrutiny from opponents who said it would create a loophole for monied interests in the ethics law. The version that ultimately passed included a “sunset” provision that means it expires on April 1. The Alabama Department of Commerce is working to develop legislation that would make those changes permanent.