Legislative Report – February 7, 2020

Volume 21 Number 1 – February 7, 2020

1st & 2nd legislative days

Governor Ivey calls for raises, prison overhaul, gaming task force

Governor Kay Ivey, giving her third state of the state address at the Alabama Capitol on Tuesday, emphasized that the state could not afford to wait any longer to fix a prison system in crisis. The Ivey administration has been pursuing a plan for three new men’s prisons for more than a year. A study group she appointed issued a report last week stressing the urgency of the situation and the need to make it a priority to improve education and training for inmates to reduce recidivism.

The Governor spent considerable time talking about education and the need for continued improvement. She encouraged people to vote in favor of a constitutional amendment that will be on the ballot in March. The amendment, which was approved by the legislature last year, would replace the elected state Board of Education with a nine-member education commission appointed by the governor and confirmed by the state Senate.

With the $7.1 billion education budget expected to grow 6% ($411.3 million) in fiscal year 2021, Ivey proposed a three percent teacher pay raise and a $25 million increase in state funding for the First Class prekindergarten program. Ivey said the increase would add 193 classrooms. She also urged the legislature to approve a $1 billion bond issue for public schools and colleges for capital improvements. She said it had been almost 14 years since the state had made such an investment. She said the money would be distributed through a formula based on need and would not include any “legislative earmarks for pet projects.”

On gaming, Ivey said she would sign an executive order to “establish a small working group of some of Alabama’s most distinguished citizens” to gather all the facts about how much money Alabama could generate from a lottery and other forms of gambling. Ivey would have no official role in the authorization of a lottery – a constitutional amendment that must be approved by the Legislature and then state voters – but she would be responsible for negotiating any gambling compacts with the Poarch Band of Creek Indians, who operate casinos in Atmore, Montgomery, and Wetumpka.

Ivey also called for a two percent pay raise for state employees, would pursue investments in rural broadband and measures to encourage medical providers to work in rural areas, and would seek to hire an additional 50 state troopers.

The governor delivered the speech in a sling, after tripping over her dog last week. Ivey joked at the beginning of the speech that “my arm is not tied behind my back, it’s just tied up.”

Committee approves bill to prohibit occupational taxes

On Thursday, the House County and Municipal Government Committee approved HB 147 by Rep. Chris Sells (R – Greenville), which would ban local governments from enacting a new occupational tax unless authorized by local law. The bill would not impact cities that already have an occupational tax, such as Birmingham, Auburn and Opelika.

The Montgomery City Council is in discussions about an occupational tax that would impact everyone who works in the city. Montgomery City Council President Charles Jinright protested the bill, telling the committee it would take away their ability to fund and run local government. Jinright noted Montgomery is 18th in state tax revenue despite being the 3rd largest city in the state.

Greg Cochran, deputy director of the Alabama League of Municipalities, also encouraged the committee to vote down this measure. Cochran says the issue is bigger than Montgomery, asking lawmakers to consider cities and towns that only have tier manufacturing jobs and no retail tax base. Those governments would be hard-pressed to shore up additional revenue outside an occupational tax.

The Alabama State Personnel Director Jackie Graham and Alabama State Employees Association Executive Director Mac McArthur penned a letter to Montgomery Mayor Steven Reed in opposition of the proposed occupational tax and are leading the charge in favor of the Sells bill in the State House.

The bill seems to be on a fast track and will likely be on the House floor next week.

School start date back in play

Rumors have been swirling in Montgomery prior to the beginning and throughout the first week of the legislative session around the issue of whether to mandate a hard start and end date for all school calendars in Alabama.

Rep. Steve Hurst (R – Munford) has indicated that he intends to introduce legislation in this session that would create a window between Labor Day and Memorial Day in which school boards could set their own school calendars. Importantly, the draft proposal, which has not yet been introduced, also allows systems to lengthen their school days giving them additional flexibility to set their calendar within these parameters.

Simply put, the bill would prohibit school systems from requiring students to attend class prior to Labor Day or after Memorial Day.

The reaction of the Alabama Association of School Boards was visceral and immediate. A call to action in opposition to this proposal went out statewide earlier this week and social media lit up with comments from parents, teachers, administrators, etc. about the heavy hand of Montgomery interfering with local control.

Complicating this matter is the fact that Rep. Hurst’s wife is facing some serious health issues that manifested themselves earlier in the week. He did not attend the session on Thursday and it is unclear when he will return to Montgomery.

Whoa, Pony!

Governor Kay Ivey put the brakes on the gaming conversation during her State of the State address Tuesday evening.

Leading up to the first day of the session, a consensus was quickly developing around a “clean lottery” proposal to be introduced by Rep. Steve Clouse (R – Ozark). Clouse’s proposal is to allow the people of Alabama to vote on a lottery later this year during the general election (presumably the highest voter turnout) and to use the approximately $150 million generated by the lottery to fund education.

Governor Ivey’s proposal to shelve the lottery and other gaming issues until she has an opportunity to appoint a study committee and to hear their recommendations took the wind out of Clouse’s sails, at least temporarily.

Clouse continues to indicate that he will move forward with his proposal, which enjoys considerable support with Alabama voters and with many members of the legislature.

The lottery conversation is complicated by the position of legislators representing the bingo/dog track gaming facilities that were shuttered or significantly hampered in their operations during the Riley shut down several years ago. These include legislators from Macon, Greene, Jefferson, Mobile and Houston counties. They have sufficient numbers to gum up the works and prevent the lottery from moving forward, as they have in the past.

In addition, the Poarch Creek Indian tribe’s $1 billion “Winning for Alabama” plan continues to garner significant attention and support among legislators and public. It remains unclear whether any or all of this can be worked out during this session.

Members are already discussing the potential of a special session later in the year to address the gaming issue, after the Ivey study committee issues their recommendations. What the study committee will recommend and whether the Governor would actually call a special session to deal with gaming issues is anyone’s guess.

Up to this point, Governor Ivey has been less than enthusiastic about embracing gaming as a source of revenue for the state, citing personal concerns about building a budget on gambling.

Lurking in the background in the discussion around the gaming issue is the problem of prisons and prison reform in Alabama. Almost no one with the exception of Department of Corrections Commissioner Jeff Dunn believes that the significant costs associated with staffing four new, large prisons in Alabama can be achieved with savings and efficiencies achieved through the closing of other prisons and consolidation.

Most believe that a large infusion of cash will be needed. Many smart betters in Montgomery believe that these funds could be generated by gaming revenues from a gaming compact with the Poarch Creek tribe. More to come as this issue plays out in Montgomery over the next weeks and months.

Upcoming legislative schedule

The House of Representatives and Senate will reconvene on Tuesday, February 11, 2020, at 2:00 p.m.