Senators strip coastal roads from BP bill, add funds for Medicaid

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(Julie Bennett/jbennett@al.com)

Alabama legislators debated today how to use a $1 billion oil spill settlement with BP, seeking common ground on how much should go to coastal counties and how much should go to paying off state debts and to Medicaid.

Senators made a key change after more than five hours of debate.

The Senate removed $191 million slated for road projects in Baldwin and Mobile counties and added $300 million for the Alabama Medicaid Agency over three years.

The changes came in a substitute bill offered by Sen. Arthur Orr, R-Decatur, chairman of the Senate's education budget committee.

The Senate passed Orr's substitute bill by a vote of 21-9, sending the bill back to the House of Representatives, which passed a different version three weeks ago.

The House voted 100-0 not to concur with the Senate changes and to send the bill to a conference committee to try to reconcile the differences, which have staunch opposition from south Alabama lawmakers.

"The citizens of Baldwin and Mobile county suffered from that oil spill," Sen. Vivian Figures, D-Mobile, said.

The Senate later voted 24-1 to agree to send the bill to the conference committee.

The committee plans to meet at 9 a.m. on Wednesday

The House and Senate will convene at 10 a.m. on Wednesday.

Lawmakers have up to two days in the legislative session after today.

The BP settlement is the main issue remaining for the special session, called by Gov. Robert Bentley to raise money for the General Fund, especially Medicaid.

The failure of the lottery bill last month put the spotlight on the BP money as a way to cover at least part of Medicaid's rising costs.

The Senate spent the afternoon debating the bill by Rep. Steve Clouse, R-Ozark, which passed the House three weeks ago.

BP is due to pay the state the $1 billion over 18 years to compensate for economic damages from the 2010 Deepwater Horizon oil spill. That is separate from other oil spill settlement funds for environmental damages.

Clouse's bill would authorize a bond issue estimated at $639 million and use the BP economic damages payments to pay off the bonds.

Clouse's plan would use $448 million of the bond money to pay back the Alabama Trust Fund for transfers used to prop up the state budget.

That would leave up to $191 million for road projects in Baldwin and Mobile counties, which caught the brunt of the oil spill damage.

The debt repayments in Clouse's plan would free up $70 million for Medicaid, which faces an $85 million shortfall in the year that starts Oct. 1 and has already cut payments to doctors.

The Senate today adopted an amendment by Sen. Trip Pittman, R-Montrose, to give another $15 million in BP funds to Medicaid, which would fully close the $85 million shortfall.

But the big changes came later, when senators adopted Orr's plan to strip out all the road money and apply $300 million over three years to Medicaid.

Sen. Bill Hightower, R-Mobile, who was handling Clouse's bill in the Senate, asked the Senate to table Orr's bill, but his motion failed by a vote of 14-17.

Orr's bill would use $320 million of the BP money to pay off the state debts to the Alabama Trust Fund, $300 million for Medicaid and none for roads.

Hightower initially indicated he was prepared to filibuster rather than allow a vote on Orr's bill.

"The form of the bill as it is right now is sadly off course because it doesn't recognize the damage to the coast," Hightower said.

Orr, however, said the outlook is grim for funding Medicaid in 2018 and beyond unless lawmakers take action now.

Medicaid is slated to receive $700 million from the General Fund in the fiscal year 2017 budget, $85 million less than it requested.

According to the Legislative Fiscal Office, Medicaid expects to need $865 million from the General Fund in 2018 and $895 million in 2019.

"We're going to be right here in this very place in February and we do not have a plan," Orr said, referring to the 2017 legislative session.

The Senate later passed Orr's bill after adding an amendment by Sen. Rodger Smitherman, D-Birmingham.

Smitherman's amendment is intended to restore Medicaid cuts in payments to physicians and to ensure funding for dialysis services.

Senate President Pro Tem Del Marsh, R-Anniston, urged senators to send a bill back to the House to keep alive the chance of a resolution in conference committee.

Hightower, although opposed to Orr's bill, said he believed there was a chance for compromise.

Corrected at 9:18 p.m. to say that Sen Arthur Orr is chairman of the education budget committee.

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