2020 Regular Session of the Alabama Legislature Kelly Butler, - - PowerPoint PPT Presentation

2020 Regular Session

• f the Alabama Legislature

Kelly Butler, Director of Finance

State Budget Process

• September – process begins with revenue estimating
• November 1st - agencies begin submitting budget requests
• Budget Office staff receive and analyze requests
• November/December – meetings with agencies to discuss their budgets
• Late December/Early January - discuss priorities with the Governor and

begin to formulate early drafts of the budget

• Follow up meetings are held with agencies as necessary
• The Governor holds meetings with legislative leadership to get their input on

policy matters

• Final decisions are made by the Governor up to the week before the Regular

Session begins

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➢ Alabama’s economy remains strong

• In 2019 Alabama added, on average, 40,230 jobs per month
• Unemployment rate was 2.7% for December 2019

➢ We do not anticipate a recession through 2021

• U.S. economy (Real GDP) grew 2.3% in 2019
• Forecasted growth is 2.1% in 2020 and 2.1% in 2021

➢ ETF Estimated revenue growth

• FY2020 – 4.46%
• FY2021 – 1.90%

➢ SGF Estimated revenue growth

• FY2020 – 3.94%
• FY2021 – 2.40%

Revenue Estimates and Economic Assumptions

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Sales Tax Collections

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2.23% 1.90% 2.75% 2.99% 4.39% 4.68% 4.29% 4.74% 4.30% 5.11% 4.54% 4.12% 3.89%

0% 1% 2% 3% 4% 5% 6% 7% 8% Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

GROSS SALES TAX 12 MONTH ROLLING AVERAGE

Individual Income Tax Collections

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4.57% 5.16% 6.65% 7.15% 8.58% 8.29% 5.40% 4.97% 9.16% 7.45% 8.20% 6.03% 7.19% 6.58%

2% 3% 4% 5% 6% 7% 8% 9% 10%

Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

GROSS INDIVIDUAL INCOME TAX 12 MONTH ROLLING AVERAGE

General Obligation Bonds

$658 million

Revenue Bonds

$4.05 billion

• Public School & College Authority
• State Port Authority
• Economic Settlement
• Federal Aid Highway Finance Authority
• Incentives Finance Authority
• Public Healthcare Authority
• Building Renovation Finance Authority
• 21st Century Authority
• Mental Health Authority
• Revolving Loan Fund Authority

Total State Indebtedness

$4.70 billion (as of 9/30/19)

Total State Debt Outstanding

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Debt Outstanding – Rank vs Other States

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Net Tax % of Supported National Per National Personal State Debt (in 000s) Rank Capita Rank Income Rank Alabama $4,285,571 25 $877 27 2.2% 27 Arkansas $1,782,522 38 $591 35 1.4% 31 Florida $17,302,435 9 $812 29 1.7% 30 Georgia $10,476,548 14 $996 26 2.3% 25 Kentucky $8,633,844 16 $1,932 12 4.8% 9 Louisiana $7,099,162 20 $1,523 17 3.5% 16 Mississippi $5,322,398 23 $1,782 14 4.9% 8 South Carolina $2,555,179 31 $503 39 1.2% 38 Tennessee $2,062,971 35 $305 44 0.7% 44

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Total Annual Debt Service

(in millions) $0 $100 $200 $300 $400 $500 $600

Rainy Day Accounts

➢ETF

• Current available amount is $454,146,159 (6.5% of FY19 budget)
• No outstanding amount to be repaid

➢SGF

• Current available amount is $212,295,186 (10% of FY19 budget)
• No outstanding amount to be repaid

➢ATF Repayment

• Original amount withdrawn

$437,390,829

• Amount repaid as of 9/30/20

$280,434,126

• Remainder

$156,956,703

• Annual required payment

$ 13,500,000

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Alabama Trust Fund Offshore Royalty Receipts

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$369,397,745 $345,231,494 $47,694,378 $42,837,457

$0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 $400,000,000

Alabama Trust Fund Assets

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(in millions)

$1,707 $2,090 $2,123 $2,329 $2,539 $2,788 $3,150 $2,934 $2,485 $2,490 $2,483 $2,365 $2,300 $2,591 $2,430 $2,543 $3,146 $3,244 $3,294

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 *

General Fund Revenue

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(in millions) $1,603 $1,428 $1,517 $1,684 $1,725 $1,755 $1,851 $1,845 $1,920 $1,996 $2,152

$0 $500 $1,000 $1,500 $2,000 $2,500

General Fund Expenditures

(in millions)

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$1,716 $1,473 $1,535 $1,686 $1,727 $1,747 $1,824 $1,854 $1,841 $1,897 $2,034 $0 $500 $1,000 $1,500 $2,000 $2,500

ETF Revenue (in millions)

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$5,679 $5,217 $5,338 $5,704 $5,683 $5,803 $6,048 $6,073 $6,327 $6,754 $7,215 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000

ETF Expenditures

(in millions) 15

$5,679 $5,206 $5,341 $5,678 $5,437 $5,731 $5,878 $5,954 $6,325 $6,409 $6,616 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000

General Fund:

Beginning balance $ 273 million Revenue $2.290 billion Available $2.563 billion Appropriations $2.563 billion Ending balance $0

2021 Budget – Governor’s Proposal

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2021 Budget – Governor’s Proposal

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Education Trust Fund:

Beginning balance $0 Revenue $7.677 billion Appropriations $7.537 billion Ending balance $ 130 million