Category: Blog

Dial grocery tax bill, landlord-tenant changes advance in Alabama Legislature

By Chris Sanders

Many low-income Alabamians could pay more in sales taxes under a bill that cleared a state Senate committee Wednesday. The Senate’s education budget committee voted 6-2 to approve SB 287, sponsored by Sen. Gerald Dial, R-Lineville. The measure awaits consideration by the full Senate.

Dial’s bill gradually would end the state’s 4 percent sales tax on groceries and increase the sales tax on other items by 1 percentage point to replace the lost education revenue. By September 2017, the state sales tax on most consumer items would be 5 percent under the bill. That would drive the total state and local sales tax rate in Birmingham and Montgomery to 11 percent.

ACPP executive director Kimble Forrister testified against SB 287 last week, saying it would negate the grocery tax savings for many low-income Alabamians by increasing the cost of everything else they buy. “We’re basically replacing one regressive tax with another regressive tax,” Forrister told lawmakers.

Sen. Vivian Figures, D-Mobile, echoed Forrister’s concerns Wednesday. “Everybody knows sales taxes are regressive, and you’re putting it on the backs of people who can least afford it,” Figures said.

Sen. Hank Sanders, D-Selma, said he worried that Dial’s bill would increase taxes on low-income Alabamians who receive food assistance under the Supplemental Nutrition Assistance Program (SNAP). SNAP recipients do not owe sales taxes on food bought using SNAP benefits, Sanders said, so they would not realize any tax savings on that portion of their grocery bill. But SB 287 would raise the sales taxes they pay on other purchases like clothes and school supplies, he said.

“These people who are at the very bottom and the worst off are going to end up paying sales tax on these other items,” Sanders said.

Landlord-tenant law changes OK’d in House committee

Some deadlines in Alabama’s landlord-tenant law would become more favorable to property owners under a bill that won House committee approval Wednesday. HB 523, sponsored by Rep. Paul Beckman, R-Prattville, awaits consideration by the full House.

Beckman’s bill is identical to a Senate proposal – SB 291, sponsored by Senate President Pro Tem Del Marsh, R-Anniston – that cleared a Senate committee last week. The measures would nearly double, from 35 days to 60 days, the time in which landlords must refund a departing tenant’s security deposit or give notice of why they are keeping all or part of the deposit.

The bills also would require landlords to give tenants a seven-day written notice if they plan to terminate the lease over a violation that does not involve failure to pay rent. Current law requires a 14-day written notice in such a circumstance.

The House and Senate likely will meet into Wednesday night and then return Thursday for the 19th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Chris Sanders, communications director. Policy analyst Stephen Stetson contributed to this report. Posted Feb. 26, 2014.

Proposed landlord-tenant law changes softened in Alabama Senate committee

By Stephen Stetson

A state Senate committee somewhat softened a set of proposed changes to Alabama’s landlord-tenant law Thursday. The Senate Banking and Insurance Committee approved a substitute version of SB 291, sponsored by Senate President Pro Tem Del Marsh, R-Anniston. The bill now goes to the full Senate.

Marsh’s original bill would have rewritten numerous parts of the state’s 2006 landlord-tenant law in favor of property owners. The committee’s changes would substantially reduce the bill’s impact on the half-million Alabamians who rent their lodgings.

The two biggest changes involve giving renters a second chance to correct mistakes before landlords can seek to evict them. Marsh’s original proposal offered tenants no right to correct, or “cure,” problems cited as a lease violation unless the landlord gave express written consent. The committee substitute would ease this “zero tolerance” provision by giving renters two chances within a 12-month period to correct such problems.

Marsh’s original bill also said any termination of electrical service to the dwelling would constitute legal abandonment of the property and allow landlords to evict tenants. The committee version would require electrical service to be disconnected for a full week before the property could be considered abandoned.

Other parts of the bill remained unchanged, however, including several portions that would adjust deadlines in favor of landlords. For example, a landlord now has 35 days to refund a tenant’s security deposit or give notice of why they are keeping all or part of the deposit. SB 291 would nearly double that time to 60 days.

Current law requires landlords to provide tenants with a 14-day written notice if they plan to terminate the lease over a violation that does not involve failure to pay rent. SB 291 would halve that timeframe to seven days. Marsh’s original bill would have cut the notice period to terminate over failure to pay rent down to four days, but it would remain at the current seven days under the committee version.

HB 523, sponsored by Rep. Paul Beckman, R-Prattville, is an identical House bill that reflects the Senate committee’s changes. That measure awaits consideration in the House Commerce and Small Business Committee. Lawmakers will return Tuesday for the 17th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Stephen Stetson, policy analyst. Posted Feb. 21, 2014.

Medicaid, prison funding challenges remain as Alabama House committee OKs barebones General Fund budget

By Carol Gundlach

Medicaid, mental health and other human services in Alabama would face yet another year of tight funding under the General Fund (GF) budget that cleared a state House committee Wednesday. The committee’s version was virtually identical to the one that Gov. Robert Bentley recommended last month.

The committee approved next year’s proposed $1.8 billion operating budget for Medicaid, public safety and other non-education services after little discussion or debate. The budget now goes to the full House, which could consider it as soon as next week.

Big challenges ahead for Medicaid, prisons

Medicaid and state prisons would get nearly half of the GF’s money next year under the House GF budget committee’s plan, continuing the recent trend of those agencies consuming an increasingly larger share of the budget’s dollars. Medicaid would receive a $70 million, or 11.4 percent, increase, while the Department of Corrections would face a cut of $6.8 million, or 1.7 percent.

The committee’s proposed funding level could make it a challenge for Medicaid to maintain current services. Medicaid would remain $15 million short of the $700 million that State Health Officer Don Williamson said last month that it needs from the GF. The agency, which insures about one in five Alabamians, already has cut reimbursements for dental services, dialysis and services from non-primary care doctors. Williamson said the agency could survive next year by looking for more ways to trim costs in the prescription drug program and other areas.

Funding challenges also would remain for the state’s prison system. The corrections cut would come even as state prisons face a shortage of guards and run at nearly twice their designed capacity. Alabama also faces growing demands to hire more female guards, install more cameras and make other prison infrastructure improvements. Rep. Steve Clouse, R-Ozark, who chairs the House’s GF budget committee, said he wants to work with lawmakers to find more money for corrections.

Flat funding the norm for many other services

Other critical social services would receive essentially the same amount of GF money next year under the committee’s plan. The Department of Mental Health would be funded at the 2014 level despite the increased demand for community-based mental health services following the closing of several state mental health hospitals.

The Department of Senior Services, which provides Meals on Wheels nutritional assistance to the homebound elderly, was similarly level-funded. State courts, which have cut hundreds of jobs in recent years, also would get much less money than they requested.

The Department of Human Resources (DHR) would receive 16.8 percent, or $11.8 million, less from the GF next year. DHR’s allocation in Bentley’s recommended Education Trust Fund (ETF) budget would nearly double to offset that loss. Between the two budgets, Bentley recommended about a 2 percent increase for DHR. Because the ETF budget has not yet won committee approval, it remains to be seen whether the Legislature will support this increase. DHR provides child welfare, child support collection and elder abuse services. The agency also administers the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program in Alabama.

A children’s health insurance program would get a substantial funding boost next year to help cover higher enrollment. ALL Kids, which insures Alabama children whose low- and middle-income families do not qualify for Medicaid, would receive 28.3 percent more from the GF.

General Fund’s long-term structural deficit remains

Alabama is one of the only states with two major state operating budgets. The ETF budget funds K-12 schools, two-year colleges and public universities, as well as other state and local services related to education. The General Fund budget provides support for all other state services, including public health, public safety and child welfare.

Alabama has the highest rate of “earmarked” revenue in the nation. That earmarking forces lawmakers to spend certain tax proceeds only for very limited purposes. For example, individual income taxes and sales taxes are set aside for the ETF and can be spent only on education. Revenues from sales taxes and income taxes tend to rise and fall with the economy, allowing the education budget to make up for bad years during good years and to save some money for years when the economy is not doing as well.

The GF budget lacks this flexibility because it is funded from a variety of revenues that are not as responsive to economic changes and that do not grow quickly enough to keep pace with cost increases. That leaves the GF with a structural deficit, meaning it often is strapped for cash even when the economy is doing well. Next year’s proposed budget once again illustrates Alabama’s chronically inadequate funding for core services, ACPP executive director Kimble Forrister said.

Time is getting shorter for the Legislature to pass GF and ETF budgets for next year. Lawmakers will return Tuesday for the 17th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Carol Gundlach, policy analyst. Communications director Chris Sanders contributed to this report. Posted Feb. 20, 2014.

Anti-ACA bill clears Alabama Senate committee

By M.J. Ellington

A bill that purports to nullify parts of the Affordable Care Act (ACA) sailed through an Alabama Senate committee Wednesday with few questions. The bill now goes to the full Senate for consideration.

SB 220’s sponsor, Sen. Jerry Fielding, R-Sylacauga, told members of the Senate Judiciary Committee that he needed to pass the bill out of the committee Wednesday but said there would be a chance to make changes. “I have some changes myself,” Fielding said. “There will be opportunity for adjustments.”

The bill cites the Tenth Amendment to the U.S. Constitution in seeking to refuse to enforce sections of the ACA that “exceed the authority of Congress.” The measure does not specify all the parts of the ACA that are believed to exceed that authority. The U.S. Supreme Court upheld the ACA’s constitutionality in 2012.

Depending on how state officials would interpret the broadly worded SB 220 if it became law, enforcement might halt Alabama’s compliance with numerous technical provisions of the ACA, including new Medicaid eligibility requirements, information system upgrades and interagency data sharing. Disrupting such activities could jeopardize current federal Medicaid funding, ACPP policy director Jim Carnes said.

SB 220 would authorize the attorney general to file lawsuits on behalf of certain individuals or businesses “being harmed by implementation” of the ACA. The measure also would prohibit Alabama or any of its cities or counties from establishing a health insurance exchange under the ACA.

In addition, the bill would forbid state agencies and employees from conducting “involuntary” home visits under certain maternal, infant and early childhood programs referenced in the ACA. The ACA already requires that all such visits be voluntary. If SB 220 bars all in-home visits under that section of the ACA, the Department of Children’s Affairs could lose $6.3 million a year in federal grants, according to the Legislative Fiscal Office.

Committee member Sen. Phil Williams, R-Rainbow City, asked whether the bill’s passage could void certain insurance contracts already in force. Fielding said he would welcome a floor amendment to address that concern.

Identical legislation – HB 147, sponsored by Rep. Barry Moore, R-Enterprise – awaits action in the House Health Committee. The Legislature will return Thursday for the 16th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By M.J. Ellington, health policy analyst. Posted Feb. 19, 2014.

Alabama Senate panel discusses plan to end state grocery tax, raise sales tax on other items

By Chris Sanders

An Alabama Senate committee took no action Wednesday on a proposal to swap the state grocery tax for a higher sales tax on other items. The panel could vote next week on SB 287, sponsored by Sen. Gerald Dial, R-Lineville. Committee members heard public testimony on the bill Wednesday.

Dial’s bill would end the state’s 4 percent sales tax on groceries and increase the sales tax on other items by 1 percentage point to replace the lost education revenue. The bill would phase in the changes over four years and would not require a public vote.

By September 2017, the state sales tax on most consumer items would be 5 percent under the bill. Local sales taxes would be unaffected, but the combined state and local tax rate would rise to 11 percent in Birmingham and Montgomery. “It’s getting to be too big of a bite out of people’s wallets,” ACPP executive director Kimble Forrister told members of the Senate’s education budget committee.

SB 287 would negate many low-income Alabamians’ grocery tax savings by increasing the cost of everything else they buy, Forrister said. Items like clothes, toiletries and school supplies would be subject to a higher sales tax under the plan.

“We’re basically replacing one regressive tax with another regressive tax,” Forrister said. “The best way to approach a regressive tax is to balance it out with a progressive tax.”

Forrister commended Dial for drawing attention to Alabama’s status as one of only four states with no tax break on groceries. But a better way to replace the revenue from the grocery tax, Forrister said, is found in HB 130, sponsored by Rep. John Knight, D-Montgomery.

HB 130 would end the state grocery tax all at once and would repeal the state’s income tax deduction for federal income taxes (FIT). Only two other states offer a full FIT deduction, and the top 3 percent of Alabama taxpayers received more than half of its savings in 2011. Because the deduction is written into the state constitution, HB 130 would require voter approval.

Dial said HB 130 faces legislative opposition, including his own, and will not pass this year. SB 287 stands a better chance of becoming law, he said. “This is the only option out there to remove sales tax for food,” Dial said. “I know you can argue that shoes and clothes and toothpaste are a necessity, but not as much as food.”

‘It’s not going to help folks at the lower end’

SB 287 would boost combined receipts to the Education Trust Fund (ETF) and General Fund by $28 million a year, according to the Legislative Fiscal Office, but the bill would require the Legislature to re-examine its changes in 2018 to ensure they are revenue-neutral. Susan Kennedy of the Alabama Education Association urged Dial to remove that provision to avoid forcing future lawmakers to slash ETF funding. “Let the 2018 Legislature deal with that issue when it comes,” Kennedy said.

Sen. Hank Sanders, D-Selma, said Dial’s bill was “selective” in raising the state sales tax on many everyday consumer items but not on more expensive purchases like cars. “It’s not going to help folks at the lower end,” Sanders said. “If they miss ’em in the washer, they’re gonna get ’em in the ringer.”

Alabama’s tax system requires low- and middle-income families, on average, to pay twice the share of their incomes in state and local taxes that the richest Alabamians pay, according to the Institute on Taxation and Economic Policy. Sales taxes are the biggest driver of that gap, because low-income families must devote more of their household budget to food, clothes and other necessities subject to those taxes.

The Legislature will return Thursday for the 16th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Chris Sanders, communications director. Posted Feb. 19, 2014.

Alabama Senate panel OKs bill to lift lifetime SNAP, TANF bans for people with felony drug conviction

By Carol Gundlach

An Alabama Senate committee Wednesday approved a bill that would allow people who were convicted of a drug-related felony to regain eligibility for food assistance or cash welfare benefits. The Senate Fiscal Responsibility and Accountability (FR&A) Committee voted 5-2 to send the bill to the full Senate for consideration.

Alabama is one of just 10 states where people who were convicted of a drug felony face a lifetime eligibility ban under the Supplemental Nutrition Assistance Program (SNAP). Alabama is also one of only 12 states to apply a similar ban to benefits under the Temporary Assistance for Needy Families (TANF) program. The bans apply even to people with a lone offense decades ago.

SB 303, sponsored by Sen. Linda Coleman, D-Birmingham, would allow otherwise eligible people to receive SNAP and TANF benefits even if they have a prior felony drug conviction, as long as they have completed their sentence or are complying with their probation terms, including any court-ordered drug treatment.

It was clear during the lively committee discussion of SB 303 that many people saw unfairness in a policy that denies eligibility only to those convicted of a felony drug crime. “A person that rapes, robs or kills can come out [of prison] and receive SNAP,” Coleman said. “This bill just levels the playing field.”

Another Senate committee last month approved a proposal – SB 63, sponsored by Sen. Trip Pittman, R-Montrose – to require drug testing for TANF applicants who had drug convictions within the last five years. Several members of the Senate FR&A Committee asked whether Pittman’s bill would apply to newly eligible people under SB 303.

Both Coleman and a representative of the Department of Human Resources agreed that SB 63 would apply to TANF applicants, but they said federal law forbids drug testing as a condition of SNAP eligibility.

After a minor, uncontroversial amendment, the committee voted 5-2 for SB 303. Voting in favor were Sens. Paul Bussman, R-Cullman; Coleman; Del Marsh, R-Anniston; Bryan Taylor, R-Prattville; and Phil Williams, R-Rainbow City. Voting “no” were Sens. Rusty Glover, R-Semmes, and Clay Scofield, R-Guntersville.

The Legislature will return Thursday for the 14th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Carol Gundlach, policy analyst. Posted Feb. 12, 2014.

Bill to allow some pharmacies to redispense HIV drugs goes to Alabama House

By M.J. Ellington

Pharmacies that dispense HIV medications for or in HIV clinics would be able to redistribute certain unopened drugs under a bill that the House Health Committee approved unanimously Wednesday. HB 138, sponsored by Rep. Patricia Todd, D-Birmingham, now moves to the full House.

Current regulations prohibit HIV clinics from sending back medications, Todd said, even if patients do not show up for treatment. Clinic doctors say there are ample opportunities to use unclaimed, unopened drugs for other patients, but state regulations do not permit unauthorized redistribution of such drugs. Without the changes proposed in HB 138, pharmacies must continue to destroy those drugs.

Todd’s bill would allow pharmacies to redispense the medications to other patientsand would set strict control measures on handling and oversight of the drugs. State law already allowscounty jails and prisons to redispense unused prescription drugs and gives oncologists theauthority to use unclaimed cancer drugs for other patients.

Arise and other consumer advocates last year urged Gov. Robert Bentley to support this policy change as his Medicaid Pharmacy Study Commission met to look at ways to reduce costs in the state’s Medicaid drug assistance programs. Advocates said the change would reduce waste and improve cost-effectiveness. Funding for most HIV medications comes from federal sources to the AIDS Drug Assistance Program at the state Department of Public Health.

The Legislature will return Thursday for the 14th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By M.J. Ellington, health policy analyst. Posted Feb. 12, 2014.

Payday, title loan reforms face uncertain future after Alabama House committee hearing

By Stephen Stetson

Payday and auto title lending reform bills were dealt a serious blow in an Alabama House committee Wednesday. Members of the House Financial Services Committee sent the payday loan bill to a subcommittee and deferred action on the title loan bill. The moves came after seven people testified in support of the payday loan bill during a public hearing.

The decisions were frustrating to advocates pushing the bills, both of which would cap annual interest rates on payday and title loans at 36 percent APR. State law now allows payday lenders to charge up to 456 percent APR, while title lenders can charge up to 300 percent APR.

HB 145, sponsored by Rep. Patricia Todd, D-Birmingham, would cap the rate on payday loans and create a uniform statewide database of such loans to help ensure compliance with existing state law that allows borrowers to take out a total of no more than $500 of payday loans at one time.

HB 406, sponsored by Rep. Rod Scott, D-Fairfield, would cap the rate on auto title loans and require lenders who repossess and sell borrowers’ vehicles to return sales proceeds that exceed the amount owed and other reasonable expenses. More than half of the House’s members are co-sponsors of Scott’s bill.

The same House committee sent similar bills to a subcommittee last year. Those bills saw no further action.

Only one person testified against HB 145 on Wednesday. A payday loan store owner from Birmingham said his stores provided a needed service to borrowers who understood the risks. Seven other speakers braved inclement weather to testify in favor of the bill, but the panel was not persuaded to send the measure to the House floor for full debate.

Rep. Thad McClammy, D-Montgomery, did much of the talking during the hearing, wondering aloud about borrowers’ motivations to take out payday loans. He referred numerous times to the high cost of parking tickets and the unexpected expenses related to having a vehicle towed. He also emphasized that removing payday and title loans from Alabama would not eliminate all poverty.

The committee voted after the hearing to send Todd’s HB 145 to a subcommittee after a motion made by Rep. Oliver Robinson, D-Birmingham, and seconded by Rep. DuWayne Bridges, R-Valley. The panel took no action on Scott’s HB 406, the title lending reform bill. The bill could return for committee consideration as soon as next week, but that is not guaranteed.

The public hearing on HB 145 didn’t begin until 45 minutes into the meeting due to lengthy consideration of a handful of relatively non-controversial measures. Speakers were limited to three minutes each, and a time shortage meant a scheduled public hearing on HB 406 never happened.

The Legislature will return Thursday for the 14th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Stephen Stetson, policy analyst. Posted Feb. 12, 2014.

Alabama Senate panel narrows scope of bill regarding public benefits recipients

By Chris Sanders

A state Senate committee Wednesday drastically reduced the scope of a proposal that would have required most adults who receive a wide range of public benefits in Alabama to perform community service.

The committee approved a new version of SB 87, sponsored by Sen. Bryan Taylor, R-Prattville, that simply would forbid the state from continuing to request waivers of federal work requirements for able-bodied, working-age adults who have no dependents and who receive food assistance through the Supplemental Nutrition Assistance Program (SNAP).

The panel’s action came at Taylor’s request. The amended bill now moves to the full Senate.

Taylor’s original bill would have required most adult Alabamians who receive a host of public benefits – including SNAP, Temporary Assistance for Needy Families (TANF), public housing and unemployment compensation – to perform 20 hours of community service each week to remain eligible. The original bill included no explicit exceptions for people who were employed or enrolled in school or job training.

Click here to read AL.com’s coverage of the committee action.

Click here to read ACPP’s analysis of the original bill.

By Chris Sanders, communications director. Posted Feb. 6, 2014.

Legislation would end Alabama Health Insurance Plan

By M.J. Ellington

An Alabama law that guarantees health insurance coverage for some people without regard to their health status is on the fast track to obsolescence in the Legislature.

Sponsors of identical House and Senate bills that would end the Alabama Health Insurance Plan (AHIP) say the program no longer will be needed because the Affordable Care Act (ACA) requires insurers to offer coverage regardless of a person’s health history.

HB 66, sponsored by Rep. Steve Clouse, R-Ozark, passed in the House last month and cleared a Senate committee Wednesday. The bill now awaits Senate approval. Meanwhile, a House committee Wednesday approved SB 123, sponsored by Sen. Slade Blackwell, R-Mountain Brook, putting the bill in line for a House floor vote.

The bills would reactivate AHIP if federal law ever again requires Alabama to offer so-called “guaranteed-issue” coverage. The measures would transfer any unobligated plan funds to the General Fund. They also could eliminate the need for the AHIP assessment on insurers, which raised $10.6 million last year, according to the Legislative Fiscal Office.

Before the ACA, insurers often refused to cover applicants with pre-existing conditions like cancer. Alabama created AHIP as a high-risk pool to cover certain residents who were turned down by other insurers after Congress passed the Health Insurance Portability and Accountability Act (HIPAA).

State Insurance Department figures show that AHIP enrollment has dropped significantly since the ACA took effect, Clouse said. AHIP’s highest enrollment was 1,800 people, but the most recent count of the plan’s participants was 640, he said.

By M.J. Ellington, health policy analyst. Posted Feb. 5, 2014.