Session begins today with ‘historic’ revenue discussions

Session begins today with ‘historic’ revenue discussions

By MARY SELL, Alabama Daily News

MONTGOMERY, Ala. – It’s day one of the Alabama Legislature’s 2022 regular session. Action begins this morning with budget hearings and an overview of revenue expectations in fiscal 2023.

Infused with federal COVID-19 relief funds, lawmakers have “historic” revenues to distribute this year. But they’re warned that both the nearly $1.6 billion American Rescue Plan Act funds and state revenues that have been bolstered by federal spending will not last.

“It’s historical, it’s exponential, it’s not sustainable,” Alabama Finance Director Bill Poole said about state revenues recently on Alabama Public Television’s Capitol Journal.

Poole said people can expect fiscally conservative budgets that make sure the state is on “solid ground” with the federal funds run out. He expects proposals to include paying down state debt and bolstering rainy day accounts.

[Poole’s comments begin at 33:00]

Fueled by federal relief money, the General Fund and Education Trust Fund budgets saw double-digit growth in 2021, which ended in September, but lawmakers have been warned that growth isn’t permanent. 

State leaders say growth in both budgets will again set records.

“We are going to look at thee budgets and make sure that we don’t take on more than the revenues that we have to spend,” said House Speaker Mac McCutcheon, R-Monrovia. “These revenues won’t last forever. There will be a time when we don’t have the revenues that we have right now. For that reason alone we need to make sure we are mindful of that and save our money.”

[McCutcheon’s interview begins at 3:33]

Meanwhile, the state has a chance to make significant one-time investments with the ARPA money. Broadband expansion is expected to be a major discussion in this session.

“It is critical that our state invest these dollars and not just spend them casually,” Poole said about the ARPA funds.

Lawmakers have said that as they craft the 2023 General Fund and education budgets, they will keep the ARPA funds separate from other state revenue sources.

Gov. Kay Ivey could call a special session within this regular session to focus on the tremendous federal infusion of cash.

Lawmakers could appropriate about $580 million in ARPA funds received last year. Potential uses include expanding rural broadband internet service, sewer and water assistance, relief for businesses hurt by the pandemic and public health infrastructure. Another $1.1 billion from the federal government is expected in May or June after this year’s session will have finished.