Voters in Alabama will be asked in a special statewide referendum Tuesday to allow state budget transfers to shore up a $185 million deficit in the general fund and prevent deep cuts to Medicaid in fiscal 2013, which begins Oct. 1.
If voters approve of the constitutional amendment, the state can transfer about $146 million a year for three years from the trust fund that collects royalties paid to the state by companies that pump natural gas offshore.
The amendment would also send about $50 million from the education trust fund to the general fund.
“This amendment will allow us to use savings the state already has in order to avoid further, devastating cuts,” said Gov. Robert Bentley. “This will allow us to maintain a basic level of services we all depend on.”
Bentley has said that if the referendum fails he will not support increasing any taxes.
Some have suggested that if the election fails a special session may be called to deal with the budget shortfall. If that does not occur, Bentley could be required to make across-the-board cuts in the budgets of agencies supported by the general fund.
In addition to Medicaid, the general fund supports state programs such as child development and protection, criminal justice, conservation efforts, economic development, public health and safety, mental health, the legislative branch, and the court system.
The fund also pays debt service on the state’s bonds.