The state of Alabama has over $580 million in American Rescue Act dollars to appropriate during this legislative session. Legislative leaders told 1819 News that legislators are likely to prioritize spending that money quickly.
The state is receiving funds from the American Rescue Act in two tranches: 50% ($1,060,139,708) was received in June 2021. The state legislature allocated $400 million to build two new mega prisons during the first special session last year. Legislators allocated another $80 million for Alabama’s hospitals and nursing homes (50% hospitals; 50% nursing homes) during the second special session. The remaining unobligated balance of the first tranche of money is just $580,139, 708. That is the money Gov. Kay Ivey (R) and the legislature are focused on now. The remaining $1,060,139,708 will be received in May/June 2022 and will be appropriated in the future.
There is speculation that Ivey will call a special session within the current Alabama Regular Legislative Session in order for the legislature to focus on and prioritize that supplemental appropriation bill.
State Senate Pro Tem. Greg Reed (R-Jasper) told reporters that he prefers doing a special session sooner rather than later in the session.
1819 News asked Reed if it would not be better to wait six months for more guidance from federal authorities and to see how the other states appropriate the money and maybe wait to see if Congress will allow some of that money to be spent on roads and bridges. (The American Rescue Act allowed it to be spent on broadband expansion and water projects).
Reed said, "No, the state is getting another $1 billion in June and the longer we wait the more difficult it will be to get these projects moving."
House Minority Leader Nathanial Ledbetter told 1819 News that “We are going to be moving on broadband soon.”
Ledbetter explained that there are only a limited number of companies who do the work of building new broadband lines and laying new water and sewage lines and those companies are being contracted by the other 50 states as well to spend the monies that those states were allocated under the American Rescue Act.
Ledbetter said, “We have to help our hospitals and nursing homes as well.”
Unemployment has declined after surging in the forced economic shutdown of 2020 during the height of the COVID-19 pandemic. Unemployment is back to where it was in the state pre-pandemic. What troubles lawmakers and businesses alike is that the state’s labor participation rate has not returned to pre-pandemic levels. Many people have simply left the workforce altogether and are not looking to return to work, so are not statistically counted as unemployed.
Ledbetter said that the shortage of labor, particularly skilled labor like equipment operators, is also a concern.
Reed said that there is a deadline for completing these projects and that if the state has not spent these (and more dollars under the President’s Build Back Better infrastructure bill, which passed Congress last month) the state may have to give the money back.
The Governor in her state of the state speech did not go so far as to announce a special session.
“But even today, as states like Alabama are making record economic comebacks, Congress is wanting our country to spend more and more federal dollars, and now we are tasked with allocating the American Rescue Plan Act funds,” Ivey said. “We must be smart with this one-time money and commit to the people of Alabama that we will wisely invest – not just casually spend – these dollars. I’ll say again that these federal dollars are just one-time funds. This is not 'free money.
“I challenge you, members of the Legislature, to make allocating these funds an early priority and to put these monies to meet some of Alabama’s biggest challenges like statewide broadband connectivity, water and sewer infrastructure, as well as investing funds in our hospitals, nursing homes and other health care providers."
Ledbetter said there is a meeting Wednesday at the governor’s office. Legislative leaders hope to work out details on how to proceed at that meeting.
Tuesday was Day One of the 2022 Alabama Regular Legislative Session.
To connect with the author of this story, or to comment, email brandon.moseley@1819News.com.