THE
ECONOMY AND FINANCES
OF
THE STATE OF ALABAMA
LEGISLATIVE BUDGET HEARING
February 2, 2016
In 1,000s
FINANCES
OF
THE STATE OF
ALABAMA
1819 TO 2017
$148,451
1%
$252,698
1% $778,606
4%
Revenues by Source
2014 - In Thousands
Taxes
$1,150,608
6%
Federal Grants and Reimbursements
$9,169,181
46%
Other Revenues
Fines, Forfeits, Court Settlements
$8,455,805
42%
Investment Income
Licenses, Permits, Fees
Total Revenue Received by the State
$25.0
In Billions
$20.0
$15.0
$10.0
$5.0
$-
2000
2001
2002
2003
2004
2005
2006
2007
Fiscal Year
2008
2009
2010
2011
2012
2013
2014
2015
Total Revenue Received by the State
$25.0
In Billions
$20.0
$15.0
$10.0
$5.0
$-
2000
2001
2002
2003
2004
2005
2006
2007
Fiscal Year
2008
2009
2010
2011
2012
2013
2014
2015
PER CAPITA STATE TAXES
In 2013, Alabama ranked
rd
43 in state tax revenue
per capita.
PER CAPITA STATE & LOCAL TAXES
In 2013, Alabama ranked
50th in state and local tax
revenue per capita.
$469,495 $314,762
2%
2%
Expenditures by Category
2014 - In Thousands
$893,213
4%
Education and Cultural Resources
$1,680,024
8%
Health
$6,506,117
33%
$1,107,139
6%
Social Services
Protection of Persons and Property
Transportation
$2,365,849
12%
General Government
Debt Service
$6,507,467
33%
All Other
Earmarking
2015 Revenues
$17,701,944,290
91%
Earmarked
Unearmarked
$1,851,312,710
9%
LAST QUADRENNIUM
LAST QUADRENNIUM
Road to a Billion
LAST QUADRENNIUM
Road to a Billion
Reached $1.2 Billion in
annual savings
Number of State Employees
(In Executive Branch)
36,000
35,029
35,000
35,296
34,923
34,892
34,428
34,000
33,000
34,131
33,717
33,714
32,932
32,984
32,807
32,630
32,000
31,185
31,000
30,170
30,269
Dec 13
Dec 14
30,000
30,029
29,832
Dec 15
Jan 16
29,000
28,000
27,000
Dec 00
Dec 01
Dec 02
Dec 03
Dec 04
Dec 05
Dec 06
Dec 07
Dec 08
Dec 09
Dec 10
Dec 11
Dec 12
MORE SAVINGS
MORE SAVINGS
Pension Reform
MORE SAVINGS
Pension Reform
Repealed the DROP Program
MORE SAVINGS
Pension Reform
Repealed the DROP Program
Health costs for state employees
•
•
•
•
Employees paying more
Wellness Program
PBM
Sliding scale for retirees
MORE SAVINGS
Pension Reform
Repealed the DROP Program
Health costs for state employees
•
•
•
•
Employees paying more
Wellness Program
PBM
Sliding scale for retirees
Froze merit raises for 5 years
MORE SAVINGS
Pension Reform
Repealed the DROP Program
Health costs for state employees
•
•
•
•
Employees paying more
Wellness Program
PBM
Sliding scale for retirees
Froze merit raises for 5 years
Refinanced bonds
STREAMLINING & REORGANIZING
STREAMLINING & REORGANIZING
Law Enforcement
STREAMLINING & REORGANIZING
Law Enforcement
Medicaid
STREAMLINING & REORGANIZING
Law Enforcement
Medicaid
Mental Health
STREAMLINING & REORGANIZING
Law Enforcement
Medicaid
Mental Health
National Guard
STREAMLINING & REORGANIZING
Law Enforcement
Medicaid
Mental Health
National Guard
Labor/Industrial Relations
STREAMLINING & REORGANIZING
Law Enforcement
Medicaid
Mental Health
National Guard
Labor/Industrial Relations
Office of Indigent Defense
STREAMLINING & REORGANIZING
Law Enforcement
Medicaid
Mental Health
National Guard
Labor/Industrial Relations
Office of Indigent Defense
Office of Information Technology
STREAMLINING & REORGANIZING
Law Enforcement
Medicaid
Mental Health
National Guard
Labor/Industrial Relations
Office of Indigent Defense
Office of Information Technology
Fleet Management transferred
SECOND QUADRENNIUM
SECOND QUADRENNIUM
Paperless
•
•
•
•
Payroll
Travel Reimbursements
Time Keeping
Purchasing
SECOND QUADRENNIUM
Paperless
•
•
•
•
Payroll
Travel Reimbursements
Time Keeping
Purchasing
Software
SECOND QUADRENNIUM
Paperless
•
•
•
•
Payroll
Travel Reimbursements
Time Keeping
Purchasing
Software
Real Property
SECOND QUADRENNIUM
Paperless
•
•
•
•
Payroll
Travel Reimbursements
Time Keeping
Purchasing
Software
Real Property
Phone
SECOND QUADRENNIUM
Paperless
•
•
•
•
Payroll
Travel Reimbursements
Time Keeping
Purchasing
Software
Real Property
Phone
More Energy Savings
FINANCIAL CONDITION
MARCH 2015
FINANCIAL CONDITION
MARCH 2015
FY16 ETF
•Increased Revenue
Total ETF Revenue
FY 2000 - FY 2016
$7.0
$6.0
In Billions
$5.0
$4.0
$3.0
$2.0
$1.0
$2000
2001
2002
2003
2004
2005
2006
2007
2008
Fiscal Year
2009
2010
2011
2012
2013
2014
2015
2016 Est
FINANCIAL CONDITION
MARCH 2015
FY16 ETF
•Increased Revenue
FY16 General Fund
FINANCIAL CONDITION
MARCH 2015
FY16 ETF
•Increased Revenue
FY16 General Fund
•14% budget shortfall
FINANCIAL CONDITION
MARCH 2015
FY16 ETF
•Increased Revenue
FY16 General Fund
•14% budget shortfall
•Governor’s Proposed Solution
FINANCIAL CONDITION
MARCH 2015
Governor’s Proposed Solution
•Regular Session – 10 year solution
FINANCIAL CONDITION
MARCH 2015
Governor’s Proposed Solution
•Regular Session – 10 year solution
•1st Special Session – 4 year solution
FINANCIAL CONDITION
MARCH 2015
Governor’s Proposed Solution
•Regular Session – 10 year solution
•1st Special Session – 4 year solution
•2nd Special Session – 1 year solution
FINANCIAL CONDITION
MARCH 2015
Governor’s Proposed Solution
•Regular Session – 10 year solution
•1st Special Session – 4 year solution
•2nd Special Session – 1 year solution
Legislative Solution
FINANCIAL CONDITION
MARCH 2015
Governor’s Proposed Solution
•Regular Session – 10 year solution
•1st Special Session – 4 year solution
•2nd Special Session – 1 year solution
Legislative Solution
•Tax Increase
FINANCIAL CONDITION
MARCH 2015
Governor’s Proposed Solution
•Regular Session – 10 year solution
•1st Special Session – 4 year solution
•2nd Special Session – 1 year solution
Legislative Solution
•Tax Increase
•Unearmarking
FINANCIAL CONDITION
MARCH 2015
Governor’s Proposed Solution
•Regular Session – 10 year solution
•1st Special Session – 4 year solution
•2nd Special Session – 1 year solution
Legislative Solution
•Tax Increase
•Unearmarking
•Budget Cuts
FINANCIAL CONDITION
FEBRUARY 2016
FY17 ETF
•Revenue estimate is lower than the cap under the Rolling Reserve Act
FINANCIAL CONDITION
FEBRUARY 2016
FY17 ETF
•Revenue estimate is lower than the cap under the Rolling Reserve Act
•$6.3 Billion vs. $6.4 Billion
FINANCIAL CONDITION
FEBRUARY 2016
FY17 ETF
•Revenue estimate is lower than the cap under the Rolling Reserve Act
•$6.3 Billion vs. $6.4 Billion
FY17 GF
•
10% budget shortfall
FINANCIAL CONDITION
FEBRUARY 2016
FY17 ETF
•Revenue estimate is lower than the cap under the Rolling Reserve Act
•$6.3 Billion vs. $6.4 Billion
FY17 GF
•
•
10% budget shortfall
Governor’s Proposed Solution
• Options
• Revenue Increases
• Unearmarking
• Budget Cuts
Retirement Systems of Alabama
Funded Ratios
120.0%
110.0%
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
TRS
ERS
QUESTIONS ?
www.finance.alabama.gov