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Alabama lawmakers want to prioritize essential services as COVID funds disappear • Alabama Reflector

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alabamareflector.com – Alander Rocha – 2025-02-03 06:57:00

Alabama lawmakers want to prioritize essential services as COVID funds disappear

by Alander Rocha, Alabama Reflector
February 3, 2025

Amid the loss of federal COVID relief funds and a likely decline in at least one state revenue stream, legislators say they want to prioritize critical services as they get ready to put the state’s two budgets together in the 2025 session.

Rep. Rex Reynolds, R-Huntsville, chair of the House Ways and Means General Fund Committee, said that although he expects the General Fund budget to come in around $3.7 billion for fiscal year 2026, which starts October 1 — a $400,000 increase from the previous year — $275 million has already been set aside for conditions line items from the previous budget, including $200 million for prisons, $50 million for prison personnel, and $35 million for the State House.

COVID funding and historically high income and sales tax revenues left state coffers flush over the last several years, allowing legislators to pass supplemental funding bills near the start of the legislative sessions. But Reynolds said he expects reduced supplemental appropriations — if any  —  as the budget-making process for the General Fund starts in the House this year. With uncertainty around what may happen to interest on state accounts and an expectation that it might decrease, Reynolds said that although the General Fund is strong, future revenue projections are affected by these factors.

“We’ll be back to basic budgeting, prioritizing the most critical services we provide as a state,” Reynolds said in a phone interview.

The Alabama Legislature begins its 2025 session on Tuesday.

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Kirk Fulford, deputy director of the Legislative Services Agency’s (LSA) Fiscal Division, said in an email Thursday that “interest on state deposits is what is concerning.”

The General Fund, which draws from more than 40 revenue streams, saw interest earnings on state deposits rise from roughly $19 million in 2021 to more than $557 million in 2024, driven by high cash reserves and elevated interest rates. The Federal Reserve has decreased interest rates by a single percentage point, and, further cuts may occur depending on economic policies set by the new administration.

“The last time the Federal Reserve reduced interest rates by over 1% in 2020, we saw a reduction in interest on state deposits to the General Fund by over 45% over a 6-month period following the reduction, and we had far less money invested the than we do right now,” Fulford said. “It is potentially a big deal.”

He added that a similar rate reduction in 2020 led to a more than 45% decline in interest earnings over a six-month period, despite the state having fewer funds invested at the time. 

Medicaid costs are also a concern, with significant anticipated increases despite the removal of over 300,000 people from the program’s rolls after pandemic-era policy kept states from disenrolling recipients. Reynolds is waiting for further details from the Alabama Medicaid Agency on expected costs, but lawmakers are expecting a substantial increase in the state’s share of the Medicaid program, which could top $1 billion for the first time in history. 

The number, while large, would only be a fraction of the total program; the federal government is expected to pay about 73% of the cost of Medicaid in 2026, according to KFF.

Sen. Greg Albritton, R-Atmore, chair of the Senate Finance and Taxation General Fund Committee, voiced the same concerns, saying they are “going to be trying to hold the reins on any supplementals and things that might be proposed” because of the expected increase in the Medicaid Agency budget.

“We’re not having to take from anybody yet. But if our revenue, which is flat now, takes a dive of any type, it’s going to put a squeeze on everybody,” Albritton said.

On the education side, Sen. Arthur Orr, R-Decatur, chair of the Senate Finance and Taxation Education Budget Committee, said that although he is expecting a supplemental appropriation bill of around $500 million, budgeting for the 2026 fiscal year will also be tighter than in previous years in which Alabama received significant federal financial aid.

“We’re now kind of trending back to the norm, and we’re going to have to make decisions and set priorities,” Orr said.

Orr said his top priority this session will be advancing a hybrid funding model for public schools, which would allocate more resources for students with special needs, English learners, and those from low-income backgrounds.

He also said that lawmakers will consider whether to extend or modify the state’s tax cut on overtime pay, which is currently set to expire in June. That tax cut ended up decreasing revenue to the state by more than the initial projection of $34 million, at $230 million from January 2024 through September 2024, Fulford said.

Minority Leader Rep. Anthony Daniels, D-Huntsville, defended the extension of an overtime tax and said he’ll push to extend it, citing a 13.65% increase in corporate tax receipts and a 1.92% rise in individual income tax receipts, totaling $191 million and $130 million, respectively. He further argued the overtime bill has boosted productivity and workforce participation, leading to economic benefits, adding that the $230 million cost is offset by increased consumer spending and productivity gains, totaling over $450 million.

Blue Cross Blue Shield proposed establishing an “ALLHealth plan” aimed at providing private health insurance to up to 330,000 eligible Alabamians, either through ALLHealth or premium assistance for employer-provided insurance using Medicaid expansion funding.

Albritton, although skeptical about the program’s reliance on federal funds, said it is worth considering because “it’s not a government plan” and the state “can’t afford Medicaid as it is hardly.”

“There are several things that are positive about it. My concern is how much it’s going to cost … I just don’t know that we’re capable of handling that program without having monies for it,” Albritton said.

With Alabama’s prison population rising and crime legislation on the horizon, Albritton said there is a need for a balanced approach to crime legislation.

“We don’t want to make felonies of everything that’s a misdemeanor,” he said. “I don’t want to put people away when we don’t have to.”​

Mental health services are another key concern. Legislators are looking for ways to support existing crisis centers, though they do not plan to fund a new one in the next fiscal year, and address the long-term care gap.

“The budget will be tight. We will not be adding any additional crisis centers. We’ll better focus on our services this year, still looking at what we can do long term for long term beds,” Reynolds said.

Despite expecting a slowing economy, legislative leaders remained optimistic about the budgets’ overall economic health.

“Even with the decline in revenue in the General Fund, we’ll still see one of the largest General Funds in the history of Alabama, so I feel like our economy remains strong,” Reynolds said.

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Alabama Reflector is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alabama Reflector maintains editorial independence. Contact Editor Brian Lyman for questions: info@alabamareflector.com.

The post Alabama lawmakers want to prioritize essential services as COVID funds disappear • Alabama Reflector appeared first on alabamareflector.com

News from the South - Alabama News Feed

Alabama Leaders Warn of Text Scam | June 16, 2025 | News 19 at 6 p.m.

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www.youtube.com – WHNT News 19 – 2025-06-16 18:26:42

SUMMARY: Alabama officials are warning residents about a widespread scam involving fake text messages claiming to be from the non-existent “Alabama Department of Vehicles.” The messages urge recipients to pay phony traffic tickets and provide personal information. Captain Jeremy Burkett from the Alabama Law Enforcement Agency emphasized that the agency would never threaten to suspend licenses via text. Experts from the Alabama Securities Commission and the Better Business Bureau note that technology has made scams more sophisticated, with scammers creating urgency to pressure victims. Officials urge the public to ignore such messages and not engage with suspicious links or requests.

You might have received a text from the “Alabama Department of Vehicles,” which is an agency that does not exist.

News 19 is North Alabama’s News Leader! We are the CBS affiliate in North Alabama and the Tennessee Valley since November 28, 1963.

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News 5 NOW at 5:30pm | June 16, 2025

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www.youtube.com – WKRG – 2025-06-16 17:53:21

SUMMARY: On June 16, 2025, News 5 NOW at 5:30pm covered major stories including the end of the search for a woman involved in a deadly boat crash that claimed the life of a mother of four, whose child was injured. A disturbing incident of numerous dead pelicans in a Mobile neighborhood likely struck by lightning was investigated. Authorities are probing a death found in a car at The Crystals at the Loop and the brutal murder of a mother in Baldwin County. The ongoing search for a missing 10-year-old girl in Destin continues. News 5 also engaged viewers with sports favorites and a poll about a local protest.

The search for a woman involved in a boat crash ends, a local woman loses her life-savings, and when exactly are the dead pelicans going away.

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Housing advocates worry states can’t fill rental aid gaps if Trump cuts go through

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alabamareflector.com – Robbie Sequeira – 2025-06-16 12:01:00


President Donald Trump’s proposed 2026 budget includes a 44% cut to the Department of Housing and Urban Development and a 43% reduction in rental assistance, reshaping federal housing aid into block grants for states. The plan imposes two-year time limits for many voucher recipients and reduces federal oversight. Advocates warn this could raise homelessness, especially in high-need and rural areas. Critics cite instability for landlords and risks for vulnerable populations. Supporters argue the shift allows states to tailor aid. Housing providers and advocates stress the need for clarity and caution to avoid destabilizing the rental market and harming low-income renters.

by Robbie Sequeira, Alabama Reflector
June 16, 2025

This story originally appeared on Stateline

The Trump administration is pushing to reshape the federal housing safety net by slashing spending and shifting the burden of housing millions of people to states, which may be ill-equipped to handle the mission.

President Donald Trump’s recent budget request to Congress for fiscal year 2026, a preliminary plan released in early May and known as “skinny” because a more robust ask will follow, outlines a 44% cut to the U.S. Department of Housing and Urban Development, including a 43% reduction in rental assistance programs that support more than 9 million Americans.

Trump also wants to consolidate federal housing aid, which includes programs such as Housing Choice Vouchers and public housing, into block grants — or finite amounts of money that states would administer. The proposal also would cap eligibility for many aid recipients at two years, and significantly limit federal oversight over how states dole out housing aid to low-income, disabled and older renters.

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The approach tracks suggestions outlined in the Heritage Foundation playbook known as Project 2025, in which first-term Trump advisers and other conservatives detailed how a second Trump term might look. The chapter on HUD recommends limiting a person’s time on federal assistance and “devolving many HUD functions to states and localities.”

To that end, Trump’s new housing aid budget request would put states in charge, urging them to create new systems and removing federal regulatory certainty that residents, landlords and developers rely on for low-income housing.

Trump’s request also proposes new rules, such as a two-year time limit on the receipt of Housing Choice Vouchers, formerly known as Section 8 vouchers, for households that do not include persons with disabilities or older adults. The vouchers, federal money paid directly to landlords, help eligible families afford rent in the private market.

Trump’s allies call the changes responsible, while detractors worry about rising homelessness among those who now receive aid.

Among the nearly 4.6 million households receiving HUD housing assistance in the 2020 census, the average household was made up of two people, and the average annual income was just under $18,000, according to a department report last year.

In testimony to Congress this month about the proposed fiscal 2026 budget, HUD Secretary Scott Turner said that HUD rental assistance is meant to be temporary, “the same way a treadway facilitates the crossing of an obstacle.”

“The block grant process will empower states to be more thoughtful and precise in their distribution and spending of taxpayer dollars,” Turner said.

The current budget reconciliation package, the tax-and-spending bill named the One Big Beautiful Bill Act, doesn’t address individual Housing Choice Vouchers or send federal housing aid back to states. However, it would offer tax credits to developers of affordable housing and expand areas that could qualify for additional favorable tax cuts. That bill passed the House and is now undergoing consideration in the Senate.

Trump’s hopes for next year

The president’s fiscal year 2026 budget request serves as an outline of the administration’s vision for next year’s federal spending.

Congress — specifically the House and Senate Appropriations committees — must draft, negotiate and pass appropriations bills, which ultimately decide how much funding programs like rental assistance will receive.

Trump’s budget request provides sparse details on how much housing aid the federal government would give to each state, and how it would oversee spending. Housing advocates and state agencies are concerned.

“A big piece of the proposal is essentially re-creating rental assistance as we know it, and turning it into a state rental assistance block grant program,” said Kim Johnson, senior director of policy director at the National Low Income Housing Coalition.

Experts say any resulting aid cuts would disproportionately affect families with children, older adults and individuals with disabilities, many of whom rely on rental subsidies and support to remain stably housed in high-rent markets.

“It would completely change how households might be able to receive rental assistance of any kind,” said Sonya Acosta, a senior policy analyst with the center. “It combines five of these programs that millions of people rely on, cuts the funding almost in half, and then leaves it completely to states to decide how to use that funding.”

That’s a shift most states can’t afford, say housing advocates.

A state-by-state analysis by the National Alliance to End Homelessness shows the highest rates of housing assistance are in the District of Columbia and Puerto Rico, along with a few blue states: Connecticut, Massachusetts, New York and Rhode Island.

“There’s no way to cut 43% of funding for rental assistance without people losing that assistance or their housing security,” said Johnson, of the National Low Income Housing Coalition.

And it’s not just urban centers that would be hit; rural areas of Mississippi and Louisiana also have high rates of federal housing aid.

“A rural community who solely relies on federal funding would be even more impacted,” Johnson added.

While state housing finance agencies proved during the pandemic that they can rapidly deploy federal funding, Lisa Bowman, director of marketing and communications at the National Council of State Housing Agencies, warned that the budget’s shift to block grants would require sufficient funding, a clear transition plan and strong oversight to ensure success.

Housing authorities are requesting further guidance from the feds and members of Congress, and more detail is needed on how any block-grant process would work, Bowman wrote in an emailed statement to Stateline.

“There is still a risk of overregulation and micromanagement with a block grant,” she wrote. “That said, for any type of new block grant to the states to work, there would need to be a transition period both to ensure states can build the necessary infrastructure and oversight and to test and train new systems with the private sector, local government, and nonprofit organizations that would interact with it.”

In New York City, which operates the nation’s largest housing voucher program, officials didn’t outline what steps they would take if Trump’s proposed cuts become reality, but a spokesperson said the plans would hurt residents.

Howard Husock, a senior fellow in domestic policy studies at the conservative-leaning American Enterprise Institute, believes the most innovative aspect of the Trump proposal is the introduction of time limits on housing assistance, a mechanism not currently used in HUD’s rental programs.

But he cautioned that a blanket two-year time limit — especially if applied to existing tenants — would be “a recipe for chaos,” particularly in high-need areas such as New York City. Instead, he supports a phased approach focusing on new, non-disabled, non-elderly tenants.

“Block grants would allow states to move away from one-size-fits-all and apply rules based on their own housing needs,” Husock said to Stateline in an interview.

Affordable housing advocates disagree.

“If passed, the president’s proposed budget would be devastating for all federally assisted tenants,” said Michael Horgan, press secretary for the New York City Housing Authority in a statement to Stateline. “Block grants, program funding cuts, and time limits will only worsen the current housing crisis.”

A recent analysis of 100 metro areas by the Center on Budget and Policy Priorities shows that households using housing vouchers are more likely to live in higher income areas than those with other federal rental assistance.

“There is a high share of these households using [other] federal rental assistance in higher-poverty areas,” Gartland, the center’s researcher, explained, noting that programs such as the Housing Choice Vouchers are a rare but essential tool for expanding housing mobility.

“If you’re cutting the programming by 40%, you’re just putting additional strain on that program and just limiting that potential.”

For housing providers, uncertainty is growing

For property owners and landlords, the proposed shift in federal assistance and housing aid to the states isn’t just a policy question, it’s a business risk.

Alexandra Alvarado, director of education at the American Apartment Owners Association, said many smaller landlords are closely following proposed changes to the voucher program.

“Section 8 is a stabilizing force, especially for mom-and-pop landlords,” she said. “Many have had loyal tenants for years and rely on that steady income.”

According to Alvarado, landlords — especially small operators — have come to view housing vouchers not just as a public good, but also as a reliable business model where rent is often on time and predictable.

But with the proposed changes placing administration in the hands of state governments, landlords fear a breakdown in consistency.

“If the administration is serious about shifting responsibility to states, landlords will need a lot more clarity, and fast,” Alvarado said. “These programs are supposed to offer certainty. If states run them inconsistently or inefficiently, landlords may exit the market altogether.”

The transition itself, she added, may be destabilizing.

“You’re turning an ecosystem upside down. Change too many parts of the system at once, and you risk unintended domino effects.”

While developers may benefit from new tax incentives in the budget, Alvarado said that doesn’t offset the instability small landlords fear.

“Most mom-and-pop landlords don’t want to evict or raise rent, especially during hard times,” she said. “They just want to provide stable housing and be treated fairly.”

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org

Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

Alabama Reflector is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alabama Reflector maintains editorial independence. Contact Editor Brian Lyman for questions: info@alabamareflector.com.

The post Housing advocates worry states can’t fill rental aid gaps if Trump cuts go through appeared first on alabamareflector.com



Note: The following A.I. based commentary is not part of the original article, reproduced above, but is offered in the hopes that it will promote greater media literacy and critical thinking, by making any potential bias more visible to the reader –Staff Editor.

Political Bias Rating: Center-Left

This article presents a detailed report on the Trump administration’s proposed cuts to federal housing aid, primarily highlighting concerns from housing advocates, local officials, and policy analysts critical of the plan. While it includes perspectives from conservative voices like the Heritage Foundation and the American Enterprise Institute, the tone and framing emphasize the risks and negative consequences of the proposed changes. The article’s reliance on quotes from advocacy groups and its focus on potential harm to vulnerable populations reflect a center-left bias, though it stops short of overt editorializing, maintaining a largely informative structure consistent with nonprofit journalism.

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