Alabama House approves spill settlement bill, Medicaid fix

By Kim Chandler, Associated Press

The Alabama House of Representatives approved a plan Wednesday to use the state's oil spill settlement money to pay back money borrowed during a past budget shortfall and for road projects in coastal counties.

 

MONTGOMERY, Ala. (AP) — The Alabama House of Representatives approved a plan Wednesday to use the state's oil spill settlement money to pay back money borrowed during a past budget shortfall and for road projects in coastal counties.

House members approved the compromise bill on an 88-10 vote, sending it to the Alabama Senate for consideration. The state owes about $580 million to two state savings accounts after lawmakers tapped those funds during past budget shortfalls.

"It's time we paid our debts off," House Ways and Means Committee Chairman Steve Clouse said, adding that it was the most responsible thing to do with the settlement dollars.

Lawmakers are in special session to consider a possible state lottery and other proposals to get money to the state's perpetually cash-strapped Medicaid program. As lottery legislation appeared to stall, lawmakers' focus shifted to the oil spill settlement bill as a means to help fill an $85 million funding gap in next year's Medicaid budget.

Paying debt early, Clouse said, would free up about $70 million in state funds that could help avoid Medicaid cuts.

"I would say of all the legislation that we've been talking about, there's probably more optimism for BP than anything else," Senate President Pro Tem Del Marsh said.

Alabama's general fund will get $1 billion over the next 18 years in settlement funds from the 2010 oil spill settlement. Under the bill, the state would take a smaller amount up front — a projected $640 million— by doing a bond issue. About $450 million would be used for debt repayment and $191 million for coastal roads.

Senators in the last regular session feuded over if the bulk of the money should go to south Alabama or should be spread across the state.

"We think it is a good compromise. We'd like to see it happen," Sen. Bill Hightower, R-Mobile, said.

The state owes $161 million to a general fund rainy day account. Alabama voters in 2012 also approved borrowing $437 million from the Alabama Trust Fund — state savings account fueled by offshore drilling royalties __ to avoid cuts to state services.

Clouse said that debt has become a financial albatross for the state.

"I wish we hadn't had borrowed it," Clouse said of the 2012 vote.

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