The World Around You

Governor Riley delivered a speech that was extremely policy oriented this evening. I find myself baffled as to how he balanced the budget with no new taxes. His fellow Republicans gave a standing ovation at this news, but I would be surprised if they are all thrilled with whatever the Governor has in mind to follow through with this statement.

You can read the text of the Governor’s remarks here.

The portions about “Alabama values” and what that means to Governor Riley (namely a ban on gay marriage and a law that would allow for a criminal to be charged with two murders for killing a pregnant woman) made me shudder, but overall I was impressed with the tone of the speech.

He was also right that the agendas of the state Democratic and Republican parties are so close to each other you would think we would have no problem passing most of these bills, but this is Alabama.

UPDATE: Some details were revealed in press interviews following the speech. Finance Director Jim Main said the Governor plans to move $60 million in education related expenses over to the Education Trust Fund budget from the General Fund Budget.

In addition,

Plans to shift about $80 million in agencies’ debt service from the General Fund to the Capital Improvement Trust Fund, which Riley controls and can use to offer industrial incentives. Riley fought such a diversion last year.

Has worked out a deal with the federal Centers for Medicare and Medicaid Services and made other changes to slash expected increases in General Fund Medicaid costs from $129.1 million to $65 million next year, a savings of $64.1 million. Hubbard praised Riley for the deal. “His stature in Washington has served us well,” Hubbard said.

I also praise the Governor for this dealing with the Federal Government. I am curious as to why he is now willing to dip into the Capital Improvement Trust Fund when he fought so hard against it last go around.

As you would expect, Paul Hubbert of the Alabama Education Association will fight any transfer of costs to the ETF. Could we be looking at the biggest potential defeat for Paul Hubbert in his career? The Governor has come up with a workable plan and if the legislature proposes new taxes, the responsibility will now fall all on them. They have had no problem with this in the past, but this is going to make for lots of fun and games on Goat Hill.

UPDATE: You can view the Governor’s budget proposals here. Overall, on first viewing of both budgets, I’m quite impressed with what he’s done. He’s going to face opposition in moving some expenses off the General Fund and into the Education Trust Fund (i.e. CHIP, Mental Health and DHR expenditures), but he has thrown down the gauntlet and the legislature is going to have to scramble to respond.

**Crossposted at Polstate.com

Alabama Governor Bob Riley will deliverhis State of the State address tonight. I would expect it will be in line with his interviews lately, reflecting on the achievements of his administration while acknowledging we still have challenges ahead. I hope he will state his preference on increases of taxes and fees and how he will propose to address the shortfall in the general fund budget. However, I don’t expect to see much detail until later on in the week.