Ala. gov no fan of 2nd federal stimulus bill, but he’s counting on it to balance state budgets

Ala. governor counts on federal money for budgets

MONTGOMERY, Ala. — Gov. Bob Riley is relying on Congress to pass a second federal stimulus bill that he doesn’t support so Alabama can get more than $1 billion to balance the next state budgets and prevent major cuts in services.

The Republican governor presented budget proposals Wednesday that count on the U.S. Senate passing the “Jobs for Main Street Act” that cleared the U.S. House in December. Riley said he doesn’t like the design of the second stimulus package, but he expects it to pass and would need it to balance his spending plans.

Riley said the federal money would help Alabama enter fiscal 2011 without reducing the number of school employees or the level of most state services.

Democratic Rep. Artur Davis was the only member of Alabama’s House delegation who supported the “Jobs for Main Street Act” when the House passed it 217-212. Alabama’s Republican U.S. senators are still deciding where they stand on the bill; both voted against the first stimulus package.

But Riley said he is optimistic, based on his conversations with members of Congress.

“If you anticipate something is going to pass, it would be asinine for us to go in and build a budget that would require people maybe to be laid off and maybe furloughed,” Riley said.

Riley, a former congressman, said he appreciates federal funding that helps states, but he’s not encouraging anyone in Congress to pass the $174 billion legislation. If he were still in the U.S. House he would have had a hard time supporting the bill, he said

Riley said part of the money is set aside for road construction, which doesn’t create jobs quickly, and he agrees with President Obama that the bill should have included a tax credit for businesses that create jobs.

Riley isn’t the only Alabama Republican expressing concerns.

Stephen Boyd, spokesman for U.S. Sen. Jeff Sessions of Alabama, said Sessions is taking a long look at the bill because the first stimulus package showed “massive spending doesn’t necessarily equate with economic growth or new jobs.”

Budget writers in the Democrat-controlled Legislature said the Republican governor appears overly optimistic about the second federal stimulus money.

“He’s writing a check for money that is not in the bank,” House budget committee Chairman Richard Lindsey, D-Centre, said.

Riley said he used the same approach a year ago in writing budgets when the first stimulus package was being considered by Congress, and Alabama lawmakers were fine with that.

Lindsey said the first stimulus package had broader support in Congress than the new one. “It is quite a bit more speculative than last year,” he said.

Riley said his budget plan is also based on:

— Seeing an economic upturn and 2 percent growth in tax collections for education.

— Maintaining current funding levels for state employees’ and teachers’ health insurance instead of raising them due to higher medical costs. That could result in higher copays or reduced benefits for the employees.

— Reducing the number of prescriptions that Medicaid recipients can receive.

— Continuing a freeze on state hiring that has been in effect a year. That freeze is expected to reduce the state government work force by about 1,000 people, or 3 percent, in one year.

If the stimulus money doesn’t come through, Riley said he will revise his budget estimates downward.

As it stands, Riley’s plan would take the General Fund budget from $2 billion this fiscal year to $2.3 billion in fiscal 2011. The education budget would go from $5.3 billion to $5.8 billion. Part of the $1 billion in anticipated federal money would go for programs that aren’t included in either budget.