Alabama Legislature Narrowly Avoids Slashing State Medicaid Funds

In April, the Alabama House approved a budget for 2013 that strained the General Fund and required deep cuts in public health and human services — particularly the state’s Medicaid program — in place of raising revenues. Although Gov. Robert Bentley (R-AL) wouldn’t support any revenue increases, he also called the proposed 30 percent cuts to Medicaid “irresponsible” and implored voters to find another solution to raise funds.

Fortunately, Alabama voted yesterday to approve a $437 million transfer from the state’s trust fund over to the state’s General Fund, which is the source of the funding for Alabama’s courts, prisons, and social services. The measure passed by a 2-to-1 vote. “I want to thank the voters for approving the state’s plan to temporarily borrow funds from our savings account to help get us through these difficult economic times without raising taxes,” Bentley said in a statement.

Yesterday’s decision is especially good news for the hundreds of thousands of low-income Alabama residents who depend on Medicaid for their health insurance coverage:

Most of the money will go to Medicaid, which provides health care for about 940,000 disabled and lower-income Alabamians, and the corrections department, which runs state prisons.

With the referendum’s approval, General Fund spending for Medicaid in fiscal 2013 is budgeted at $615.1 million, an increase of $39.7 million, 6.9 percent, from this year. […]

Henry Mabry, executive secretary of the Alabama Education Association teachers’ lobby, said the yes vote protected Medicaid patients. “Hallelujah,” Mabry said. “Alabama voters chose to take care of God’s children.”

Democratic lawmakers in the state warn that, while transferring funds was a short-term solution to Alabama’s budget crisis, long-term economic solutions will require finding a way to replace the money that was borrowed from the trust fund. Without a departure from failed austerity policies and an agreement to raise taxes in the state, some politicians worry that Alabama is simply digging itself into a deeper budget hole.

Alabama House Minority Leader Craig Ford (D) said in a statement that while he was glad that Medicaid would not be cut, he is calling on the Republican-led legislature to work out a more tenable solution for balancing the state budget. “The problem has not gone away, and if we do not act soon, we will be right back here in three years,” Ford said. “We are also going to demand that the leadership propose a long-term solution to this problem.”