McCutcheon: “We have a long way to go with the general fund”

Wendy Sack

CULLMAN –  It was a packed house at the VFW on Tuesday evening. More than 70 people, including many elected officials, turned out to hear the special guest speaker at this month’s Cullman County Republican Women meeting. Newly-elected Alabama Speaker of the House Mac McCutcheon, R-Monrovia was the man of the hour.

McCutcheon, mild-mannered and, some might say, more soft-spoken than your “typical” politician, blended right in with the crowd until he took to the podium to deliver his remarks.

His main message? Republicans gained a majority in the Alabama Legislature in 2010 and a super majority in 2014, but they have a long way to go, particularly with the general fund.

“We have done some good things over the past several years. When we started in 2010, then in 2014 when we had the super majority, those four years, between 2010 and 2014, we started addressing some real issues.  We started looking at things like budgets, we started looking at the education budget. We passed the appropriation prevention bill, the act which actually kept education out of proration. And we started looking at a 15-year average to average that education budget.”

But there was one budget that the Legislature did not fix, McCutcheon says. The general fund.

“We have very little growth revenues in that general fund,” he said. “We’ve got a lot of work we need to do to get us where we need to be on the general fund.”

McCutcheon acknowledged that if the Legislature starts to take money from the education budget, there will surely be resistance, but that “in reality, the education budget is moving in a good direction. We’ve got to maintain that, but we have got to focus on the general fund.”

As part of shoring up the general fund budget, there have been cuts in some of the State’s agencies, including Public Safety and the Alabama Law Enforcement Agency (ALEA). Many driver’s license offices have been closed and the State has a shortfall of manpower at ALEA. McCutcheon says he believes that the State needs as many as 350 more state troopers and that, right now, the average response time for a state trooper is more than an hour.

To address the issue of driver’s license office closures, McCutcheon announced the formation of special task force, an interim House committee, which will be headed up by Rep. Randall Shedd, R-Fairview, to review procedures for issuing licenses, look into reducing wait times and investigate the areas where offices were closed to see what can be done.

McCutcheon then turned to the topic of budget reform and the $500 million tax package that Gov. Bentley presented to the Legislature in 2014. He says that most of the Legislature was taken aback by the governor’s proposal, but that when they really sat back and looked at the debt that the state owed and the services that needed to be provided, the $500 million was a justified number, but there was a lot of debate over whether or not taxes needed to be raised.

“As Republicans, raising taxes is really not a part of our platform,” he said.

It was a very difficult time, he said, almost nine months spent trying to figure out the general fund budget, and during that time, the subject of earmarks came about. “We carry close to 90 percent earmarks,” he said, emphasizing that Alabama is the highest in the nation when it comes to earmarked funds coming in.

Another subject? Waste. How much waste do we have in Alabama?

Looking at different state agencies, McCutcheon called out the Department of Mental Health, whose operating administrative costs only account for two percent of the general fund. “But,” he said, “there are some other agencies that are not running that lean.”

McCutcheon says that the two biggest revenue draws on the general fund are the Department of Corrections and Medicaid, and he says, because of that, all of the other agencies suffer.

He made reference to the “Star Chamber” bill (HB257) that he was involved with back in March of last year that he says he got a considerable amount of flak for in the media, which would have created a joint-legislative committee to investigate agencies and how they spend their dollars.

That bill did not pass, but McCutcheon stressed on Tuesday evening the need for having a committee to “really dig down deep and ask questions about the fraud we have and the fraud investigation that we do not have in Medicaid.”

The BP Bill, which passed the Legislature and was signed by Bentley this month, provides funding for Medicaid for the next two years, in part because of Regional Care Organization (RCO) Centers that “will take care of Medicaid issues for a lump sum payment.” That means that instead of the Legislature having a floating figure every year, there will be a flat amount per region per year. “The Feds said they would match it, but we had to come up with the money to get the program off the ground,” he said.

McCutcheon says the $85 million from the BP Bill this year will get the RCO program off the ground, and the more than $100 million for the next budget year will continue it, “but going into the third year, we’ve got to find answers.”

Part of those answers, according to McCutcheon, is Joint Resolution 62, which will create a Joint Legislative Task Force on Budget Reform to examine the structure and design of the state budgeting process and make recommendations for long-term budget and tax system reforms. 

The committee would be composed of seven members of the House and seven members of the Senate.

“They’re going to start finding out exactly where all of these dollars are going in all of these agencies,” he said. A big part of that is forensic audits.

“We’re going to find out exactly how much money are we spending,” he said, “in terms of people using emergency rooms instead of RCOs, how much fraud do we have, how many people do we have on Medicaid that are there illegally?”

He continued, “The message that we have to get over to these departments is that we’re not here to hurt you, but we’re just here to get good answers to the questions that we have so that we’ll all understand a little better what’s going on.”

McCutcheon says there’s different numbers out there as to how much is being “wasted,” but that the State needs to find out for sure so that when or if it comes time to present a tax package to the taxpayers, the State will have all of those answers to give.

He also addressed tax credits, to the tune of a reported $4 billion in the State of Alabama. “What’s our return on that?” he asked. “Some of these tax credits have been on the books for over 20 years.”

Going back to JR62, he said, “Really pay attention.” He says he has had a lot of interest from people wanting to work on it, but that this committee is not going to be very popular with anyone, as they are going to be “un-earmarking” dollars. McCutcheon says that the general fund brings in more than $20 billion a year, but that the Legislature only appropriates about $1.6-1.7 billion. A big chunk of the remainder of that money is already earmarked.

“When you start taking a department head’s money away from them, and you put it back into the Legislature’s hands, you have got a real battle on your hands. Can we pass it? I don’t know. Honest answer.”

A point that garnered much applause was that through the BP Bill, the State is going to be able to pay back 80 percent of its debt.

“The bottom line,” he said, “is that we can be better with taxpayer dollars, and we can be more efficient.”

When the floor was opened up for questions, McCutcheon was put on the spot about whether or not he would support legislation making Alabama a closed primary state. He did not go so far as to say he’d definitely support it, but said he wouldn’t do anything to oppose it.

Other elected officials present at the meeting were Shedd, Rep. Corey Harbison, R-Good Hope, Probate Judge Tammy Brown, Circuit Clerk Lisa McSwain, District Judge Rusty Turner, District Judge Kim Chaney, Circuit Judge Martha Williams, Circuit Judge Greg Nicholas and Cullman County School Board member-elect Heath Allbright. Educators Shane Barnette, superintendent of Cullman County Schools, and Dr. Vicki Karolewics, president of Wallace State Community College were also in attendance.  


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