2015 legislative update: Medicaid, mental health, child care would be slashed under Alabama House's General Fund budget

Alabamians’ quality of life would suffer for years to come if the no-new-revenue General Fund (GF) budget that the state House passed 66-36 Tuesday becomes reality. The barebones budget would slash vital services like health care, child care and public safety. Alabama’s promising new reforms of Medicaid and prisons would end, and services for low-income children could face devastating cuts. The budget now goes to the Senate.

“Alabama simply can’t afford the cuts in the no-new-revenue General Fund budget,” Arise’s Kimble Forrister said Tuesday. “It’s time to stop cutting the services that make our state a better, healthier place to live and to start investing in Alabama’s future.”

At no point during floor debate did a House member mention Gov. Robert Bentley’s plan to raise $541 million in GF revenue. The bills, including proposals to increase the state cigarette tax and the state sales tax on automobiles, still await a House vote.

‘We were elected to govern, not to pander’

Opponents of the budget cuts repeatedly raised concerns about their impact on children, seniors, low-income Alabamians, and people with disabilities. Rep. Thomas Jackson, D-Thomasville, argued that the budget would take food from low-income families. Rep. Laura Hall, D-Huntsville, said the cuts would prevent the state’s promising new prison reforms from being implemented. “I don’t know how anyone can be proud to pass prison reform and then not fund it,” Hall said.

Rep. Patricia Todd, D-Birmingham, emphasized the budget’s proposed cuts to AIDS drug assistance and put the GF debate in stark terms. “People are going to die because of this budget,” Todd said. “We were elected to govern, not to pander.”

Rep. Steve Clouse, R-Ozark, who chairs the House’s GF budget committee, said the budget wasn’t what he wanted to present. But “we’re having problems with our colleagues in the Senate and want to give them motivation to come to the table” and identify new revenue, Clouse said.

With the Legislature’s regular session nearing an end, talk of one or more special sessions is running rampant, and the threat of deep cuts to services that make our state a better place to live and work is real. Here is a look at a few of the ways Alabamians would feel the cuts in their everyday lives:

Proposed budget cuts would end new Medicaid reforms and impose severe cuts to other health care programs. The proposed GF budget would reduce Medicaid funding by 5 percent. State Health Officer Don Williamson has said the cut would force Medicaid to abandon its new regional care organization model, designed to keep patients healthier while cutting costs.

Williamson said last month that a smaller 3 percent cut would force the agency to end coverage of outpatient dialysis, forcing kidney patients to be admitted to the hospital to receive routine dialysis. Medicaid also would have to stop paying for adult eyeglasses and prosthetics.

In addition, Medicaid would reduce reimbursement payments to doctors, which could mean fewer physicians treating Medicaid patients. Medicaid also would contract with a single provider of prescription services, likely forcing many local, independent pharmacies to close.

The committee’s budget would also cut home health services for the elderly and disabled. Patients losing these services could be forced to enter much more expensive nursing homes, reducing patients’ independence and increasing costs to the struggling Medicaid program. Funding for life-saving HIV and AIDS medications would be cut by 50 percent.

Proposed budget cuts would reduce community mental health services. In recent years, the Department of Mental Health responded to budget cuts by closing nearly every public mental health hospital. Many advocates applauded the new focus on less restrictive (and less expensive) community-based services.

But the 2016 GF budget proposal would reduce funding for those very services by 5 percent. Patients unable to receive mental health treatment may be forced into private hospitals, or they may end up incarcerated in local jails without access to needed counseling and medications.

Proposed budget cuts would devastate social services for low-income families and children. Together, the House’s GF budget and the education budget awaiting House approval would reduce Department of Human Resources (DHR) funding by 14 percent. Clouse said Tuesday that the addition of revenues already earmarked, or set aside, for DHR would reduce the total cut to 5 percent.

Because much state DHR funding is matched by federal money, the agency’s total cuts would be much larger than the lost state dollars alone. DHR last week outlined severe service reductions in response to the cuts. They would include:

  • Reductions in child care assistance for thousands of working families,
  • Elimination of adult day care services for 300 elderly and disabled adults, and
  • Reductions in protective services for abused and neglected children.

Alabama’s network of Community Action Agencies provides nutrition, housing, Head Start and energy assistance services to low-income people. The proposed GF budget would cut state funding for these services by 50 percent.

Proposed budget cuts would end prison reform and could risk a federal takeover of the state prison system. The House approved GF budget would make devastating cuts to Alabama’s civil and criminal justice system, ensuring that the recently passed (and highly praised) prison reform legislation could not be implemented.

Alabama’s prison system, already operating at nearly twice its designed capacity, would absorb a 5 percent cut under the proposed budget, increasing the risk of federal intervention. The budget also includes major cuts for the very programs needed for prison reform to succeed: drug courts; community corrections; and parole services, essential for reducing recidivism.

Bentley has signed the prison reform bill into law. But before any of those reforms can be implemented, the governor’s office must certify that the Department of Corrections and the Board of Pardons and Paroles have enough money to move ahead with the changes. The proposed GF budget would derail prison reform by making this certification impossible.

Our state needs new revenue to avoid these cuts. Overall, the GF budget falls more than $200 million short of the amount needed to prevent deep service cuts and invest in reforms. Lawmakers thus far have not considered Bentley’s proposals to raise revenue and avoid those cuts, including increasing the state cigarette tax and automobile sales tax. Other tax bills that won House committee approval last week also have stalled.

Alabama faces an important choice that will help determine what kind of state our children and grandchildren will inherit. Do we raise new revenue to protect vital services like health care and public safety? Or do we erode our state’s quality of life with devastating cuts to those services? The House budget would side with the latter option, and Alabama would suffer the consequences of that choice for years to come.

By Carol Gundlach, policy analyst. Posted May 19, 2015.

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